Pennsylvania Oil and Gas Lease Act

On November 3, 2022, Pennsylvania approved revisions of the Oil and Gas Lease Act provisions on required disclosures accompanying payments made to royalty owners from unconventional oil and gas wells. Unconventional oil and gas operators must now provide production and sales information on a well-by-well basis. The new reporting requirements include categorized royalty deductions with an optional summary format that should be provided within 60 days of receipt of a written request from the royalty owner by certified mail, or else the royalty owner may bring a civil action to obtain that information and recover attorney’s fees and court costs.

The new revisions also update timing for royalty payments and late payment penalties, dictating that payments not made within 120 days of the first sale and thereafter no later than 60 days after the end of the month of sale shall be subject to interest at the standard legal rate (6% per annum). The only allowances for suspension of payment shall be a failure of marketable title, bona fide disputes over an interest, or if an owner is not locatable. These revisions to the Pennsylvania Oil and Gas Lease Act are set to take effect on March 3, 2023.