On Friday, March 9, 2018, West Virginia Governor Jim Justice signed into law a state statute permitting the leasing of oil and gas interests owned by seven or more “royalty owners,” if at least 75% of the owners agree to the lease. The law, which takes effect on July 1, 2018, eliminates the need to lease all co-owners (which was the previous law) and helps avoid complicated partition proceedings, the legal concept of waste and lengthy trespass actions. Known as the Co-Tenancy Modernization and Majority Protection Act, the law permits non-consenting owners to receive a pro-rata share of lease bonuses and royalties or become a working interest owner in the natural gas well. Royalties for unknown owners are placed into a State Treasurer’s account and, after seven years, may escheat to the state for statutorily specified purposes. Also, after that seven year period, the surface owner may file a quiet title action seeking the interest of the unknown or unlocatable interest owners and, thereafter, shall be entitled to future proportionate royalties. Finally, the law generally requires the surface owner’s permission for surface use.
A copy of the enacted law (W. Va. Code § 37B-1-1) can be found at this link: Co-Tenancy Modernization and Majority Protection Act.