American Oil and Gas Reporter - March 2018 - 94

ConventionCoverage: Independent Oil and Gas Association of West Virginia

West Virginia Legislation
Offers Operators Aid
By Dan Holder
CHARLESTON, W.V.-Not too long
ago, West Virginia's oil and gas industry
was a minor economic player in the state,
and it largely went unnoticed during legislative sessions, recalled Marc Monteleone, president of the Independent Oil
and Gas Association of West Virginia.
Opening IOGAWV's 2018 winter
meeting, held Jan. 23-24 in Charleston,
he asserted that no longer was the case.
"Oil and gas is the hope of West Virginia," said Monteleone, a partner with
Bowles Rice LLP in Charleston. "If you
think about things going on in our industry
now, such as the natural gas liquids
storage hub, or China's investments in
the state, we are front and center for at
least the next 50 years. Responsibility
comes with that, and now the oil and gas
industry is talked about in legislative sessions every year. There are countless bills
we have to work on."
Although the economic benefits to the
state's operators are significant, Monteleone pointed out threats to continued
industry success also had increased. He
hailed the work of IOGAWV's legislative
team's work at the statehouse, saying
while the legislature had been in session
two weeks at the time of the winter meeting, association staff had been working
on legislative issues for the past four
months.
According to Monteleone, three major

issues for IOGAWV in 2018 were cotenancy, property tax reform and severance
tax reform.
"We want to fix the severance tax so
that conventional wells that are not producing or making money do not have to
pay those taxes," he said. "Those taxes
are not a big hit to West Virginia, and it
actually may cost the state more money
to administer the program than it brings
in."
Statehouse Priorities
Co-tenency legislation is IOGAWV's
biggest priority, indicated Phil Reale, an
attorney with the law office of Philip A.
Reale PLLC who serves as the association's lead lobbyist. "Co-tenancy now
has a different nomenclature: mineral development by a majority of co-tenants,"
Reale described. "IOGAWV wants West
Virginia to become the 37th mineral producing state to allow for a majority of
co-tenants within one tract not to be deprived of their ability to develop the resource by a minority of co-tenants."
West Virginia now requires agreement
from all owners or heirs with property
interests before a lease is signed. IOGAWV
is supporting HB 4268, sponsored by
Representative William Anderson, RWilliamstown, which would reduce that
requirement to 75 percent, Reale said.
Another piece of legislation concerning
property heirs is under consideration in
the statehouse, Reale pointed out. HB

Marc Monteleone (left),
president of the Independent Oil and Gas Association of West Virginia,
visits with Phil Keeton of
EQT Production Company before his remarks
opening the association's
winter meeting. IOGAWV
held the event Jan. 23-24
in Charleston, W.V.

94 THE AMERICAN OIL & GAS REPORTER

4269, the Uniform Partition of Heirs
Property Act, introduced by Representative
John Kelly, R-Parkersburg, lays out how
property and interests may be sold in a
partition suit and provides for a court
hearing to determine if such legal action
concerns heirs' property, he described.
"The prospects of the co-tenancy bill
passing are pretty good. We all need to
look closely at the partition of heirs measure. It defines heirs' property. Frankly, it
is not what you may think," Reale said.
"It contemplates a family feuding over
interests in property. The anomaly is that
if you are the heir in an heirship property
that brought the action for partition and
the court is determining its value, oddly
enough, the other heirs have the option to
buy out the one who brought the action."
Reale predicted the heirs legislation
would have the most significant impact
on operators drilling long horizontal wells
who relied on partition actions to quiet
titles effectively.
Horizontal drillers also should monitor
HB 4270, Reale advised. The bill, introduced by Representative Frank Deem,
R-Vienna, is a transparency act, "which
effectively means it will require disclosure
as specifying exactly what information
has to be disclosed to a royalty owner
who benefits from the production of a
horizontal well," he said.
"What many people don't understand
is that we are not just competing for risk
capital investment for drilling in our state
versus Ohio or Pennsylvania, because we
are in that regional play," he said. "We
also are competing for risk capital to be
invested in the Permian Basin and everywhere else. It is all about return on investment; it is all about margin. If we are
not competitive, then we don't benefit."
Global Energy Demand
Some analysts predict the world will
one day rely heavily on wind and solar
to meet energy needs, but Karen Alderman
Harbert, president and chief executive
officer of the U.S. Chamber of Commerce's Global Energy Institute, told IOGAWV those experts needed to restudy
their figures. Instead of renewables sup-

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