News & Alerts
March 5, 2020 WYOMING HB 0014: WYOMING BILL TO AMEND DRILLING UNITS-RISK PENALTIES AND MANDATORY ROYALTIES HAS PASSED BOTH THE HOUSE AND THE SENATE, AND IS READY FOR GOVERNOR GORDON’S SIGNATUREpdf
Wyoming HB 0014 was supported in both the House and Senate. The House Speaker and Senate President signed HB 0014 on March 5, 2020 after the bill successfully passed the third reading in the Senate on March 4, 2020. Now the Bill will proceed to Governor Gordon’s desk for signature. Once signed, the bill becomes effective July 1, 2020.
HB 0014 amends the unleased, non-consenting, mineral interest owners’ penalties; provides for mandatory royalties for unleased mineral interest owners during the payment of penalty; and provides an option for those unleased mineral interest owners to become working interest owners after full payment of penalty. The bill also includes a limitation on the length of a pooling order, and provides for a twelve (12) month expiration date from the day the order is issued, unless the well is drilled within such twelve (12) month period.
The specific amendments to Wyo. Stat. §30-5-109 regarding pooling of non-consenting working interest owners are outlined below.
- Section (f) adds language providing that pooling orders issued under Section (f) will expire twelve (12) months after the Order is issued if the person authorized to drill the well does not commence operations within twelve (12) months of the order being issued.
- Section (g) includes language for payment of the royalty (as required under Section (h)) and amended the calculation of an owner’s share for a drilling unit based on the number of wells drilled by the operator in a unit.
- (g)(ii)(A) – 300% of that portion of costs and expenses for drilling, reworking, deepening or plugging back, testing and completing and up to 200% of that portion of newly acquired equipment to include wellhead connections, if the nonconsenting owner’s interest is subject to a lease or other contract for oil and gas development.
- (g)(ii)(B) – For the first well drilled and operated in a DSU, 200% of that portion of costs and expenses for drilling, reworking, deepening or plugging back, testing and completing and up to 125% of that portion of newly acquired equipment to include wellhead connections, if the nonconsenting owner’s interest is subject to a lease or other contract for oil and gas development.
- (g)(ii)(C) – For each subsequent well drilled and operated in a DSU 150 % of that portion of costs and expenses for drilling, reworking, deepening or plugging back, testing and completing and up to 125% of that portion of newly acquired equipment to include wellhead connections, if the nonconsenting owner’s interest is subject to a lease or other contract for oil and gas development.
- Section (h) adds language providing that a non-consenting owner subject to a pooling order as provided in Section (g) but is not subject to a lease or other contract for oil and gas development is entitled to a cost-free royalty interest equal to the greater of:
- (i) 16% or
- (ii) The acreage weighted average royalty interest of the leased tracts within the DSU.
- Section (j) adds language providing the process and timeline for which a person who is operating the well in a unit, subject to a pooling order, has received full payment of the recoverable costs from a non-consenting owner, that non-consenting owner may elect to participate in the pooling order or may elect to continue receiving a royalty payment as laid out in Section (h).
The full version of the of the bill with all amendments adopted by both houses is available on the attached pdf.