March 1st, 2021
Changes to W.Va. Code 55-12A-7
Changes to West Virginia statutes making it easier for oil and gas companies to lease long forgotten mineral interests have been pursued for years. The recent co-tenancy statute provided a new mechanism to allow oil and gas operators to force oil and gas leasing hold outs into deals when certain steps are met. Changes also occurred, however, to the more traditional means that oil and gas operators had used to lease certain mineral interests tied up in heirship. W.Va. Code 55-12A-1 et seq. had long provided a mechanism where oil and gas operators and surface owners could file court actions that would allow them to lease mineral interests even when potential unknown or unfindable heirs had not signed onto the deal. The legal process allowed Circuit Judges to approve oil and gas lease agreements through a special commissioner. Monies attributable to those unknown or unfound owners would be held in receivership. Once seven years had passed, the proven surface owners of the property could be provided those oil and gas funds as well as ownership of the minerals moving forward.
Many oil and gas operators reached out to surface owners over the years, reaching agreements to pursue these types of action. Many of those actions have now existed for the requisite seven-year time period. Surface owners should be aware, however, that the law has changed. Effective July 1, 2020, the monies attributable to those unknown/unfound mineral owners are payable not to the surface owner, but to the Department of Oil and Gas’s Reclamation Fund. The surface owners will still receive a deed to the actual mineral interest moving forward, but the funds that had accrued before that point are paid to the state. The legislature attempted to make these changes retroactive. The statute reads that “any funds shall be transferred [to the Oil and Gas Reclamation Fund] that have been unclaimed for seven years or more after the date of the special Commissioner’s lease whether or not the special Commissioner’s lease was signed before or after the effective date of the amendments to this section.”
If you are or might be a party to a W.Va. Code 55-12A-1 action to lease minerals under your land, you should be aware of the change in law and you should seek advice as to your rights -- especially if you relied on the promises of oil and gas operators in order to start or join such an action.