Introduced Version
House Bill 2280 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 2280
(By Delegate Manypenny)
[Introduced February 13, 2013; referred to the
Committee on Energy, Industry and Labor, Economic
Development and Small Business.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §36-3-8a, relating to
requiring persons who are not members of the American
Association of Professional Landmen to have two years or more
of experience in contracting for oil and gas leases before
being able to represent lessors in the exploration or
development of natural gas in the Marcellus Shale geologic
formation; requiring those persons to also successfully
complete an ethics class; making findings; defining a term;
and establishing monetary penalties.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §36-3-8a, to read as
follows:
ARTICLE 3. FORM AND EFFECT OF DEEDS AND CONTRACTS.
§36-3-8a. Qualifications of persons taking leases in the Marcellus
__________Shale geologic formation; findings; definition;
__________penalties.
__________(a) Findings. --
__________(1) A quality landman can have as much effect on the
profitability of the oil and gas venture as either a geologist or
engineer. Any mistake by the landman can expose the oil and gas
producer to various lawsuits or reduce the profitability of the
property due to poor negotiation tactics.
__________(2) Most oil and gas landmen spend a tremendous amount of time
in county courthouses searching through the real property records
to determine the mineral ownership in various properties. This
process can be very tedious and requires a firm understanding of
state real property law. Tens of thousands of dollars may be spent
in leasing based on the landman's final report of the mineral
ownership of the properties.
__________(3) Once the title ownership is determined into the oil and
gas properties, it is the landman's responsibility to contact the
various mineral owners to execute oil and gas leases. The landman
has to have a solid understanding of oil and gas law at this point
because more often than not the negotiations are with the mineral
owner's attorneys. Virtually every oil and gas lease tends to be a
custom document tailored to the individual concerns of the mineral owner. This is a critical phase of the process because the bonus
consideration for executing the lease and the royalties paid on
production are negotiated at this point.
__________(4) During and after the title search process the landman may
be required to cure title defects by drafting and executing various
agreements including affidavits, ratifications and use and
possession. The primary role of the landman at this stage is to
help reduce the title risk associated with the ownership of the
respective producer into the leases taken on the property.
__________(5) Landmen are involved at virtually every other level of the
development process of oil and gas ventures. They may be called
upon to unitize or pool various mineral interests into a production
unit, divestiture negotiations, leasehold due diligence and general
management and maintenance activities.
__________(6) Most new landmen are challenged by the fact that they have
to be an analyst, manager, salesman and negotiator all at the same
time. It takes a very self motivated individual to wear all of
these hats one time.
__________(b) Definition. -- For purposes of this section "landman" is
a land professional who has been primarily engaged in negotiating
for the acquisition or divestiture of mineral rights or negotiating
business agreements for exploring for or development of minerals.
__________(c) Requirements. -- A landman who is not a member in good
standing with the American Association of Professional Landmen must have at least two years experience in negotiating for the
acquisition or divestiture of mineral rights or negotiating
business agreements for exploring for or development of minerals
and to have successfully completed an ethics class for landmen
before he or she may represent lessors in taking leases for the
exploration or development of natural gas in the Marcellus Shale
geologic formation.
__________(d) Penalties. -- Any person who violates subsection (c) of
this section, fails to disclose significant information to a
landowner or coerces or makes fraudulent representations to a
landowner when securing a lease for the exploration of natural gas
in the Marcellus Shale geologic formation is guilty of a
misdemeanor and, upon conviction of a first offense shall be fined
not less than $1,000 nor more than $3,000; upon conviction of a
second offense, shall be fined not less than $2,000 and not more
than $4,000; and upon conviction of a third or subsequent offense
thereof shall be fined not less than $3,000 and not more than
$5,000.
NOTE: The purpose of this bill is to require persons who are
not members of the American Association of Professional Landmen to
have two years or more of experience in contracting for oil and gas
leases before being able to represent lessors in the exploration or
development of natural gas in the Marcellus Shale geologic
formation. The bill also requires those persons to also
successfully complete an ethics class. The bill further makes
findings, defines a term and establishes monetary penalties.
This section is new; therefore, it has been completely
underscored.