A. If there are conflicting claims to the ownership of coalbed methane gas, the Board, upon application from any claimant, shall enter an order pooling all interests or estates in the coalbed methane gas-drilling unit for the development and operation thereof.

Terms Used In Virginia Code 45.2-1622

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Board: means the Virginia Gas and Oil Board. See Virginia Code 45.2-1600
  • Coalbed methane gas: means occluded natural gas produced from coalbeds and rock strata associated with it. See Virginia Code 45.2-1600
  • Coalbed methane gas well: means a well capable of producing coalbed methane gas. See Virginia Code 45.2-1600
  • Coalbed methane gas well operator: means any person who operates or has been designated to operate a coalbed methane gas well. See Virginia Code 45.2-1600
  • Docket: A log containing brief entries of court proceedings.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Gas or oil owner: means any person who owns, leases, has an interest in, or has the right to explore for, drill, or operate a gas or oil well as principal or lessee. See Virginia Code 45.2-1600
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Nonparticipating operator: means a gas or oil owner of a tract that is included in a drilling unit who elects to share in the operation of the well on a carried basis by agreeing to have his proportionate share of the costs allocable to his interest charged against his share of production from the well. See Virginia Code 45.2-1600
  • Oil: means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, that are produced at the well in liquid form by ordinary production methods and are not the result of condensation of gas after it leaves the underground reservoir. See Virginia Code 45.2-1600
  • Participating operator: means a gas or oil owner who elects to (i) bear a share of the risks and costs of drilling, completing, equipping, operating, plugging, and abandoning a well on a drilling unit and (ii) receive a share of production from the well equal to the proportion that the acreage in the drilling unit he owns or holds under lease bears to the total acreage of the drilling unit. See Virginia Code 45.2-1600
  • Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
  • Well: means any shaft or hole sunk, drilled, bored, or dug into the earth or into underground strata for the extraction, injection, or placement of any gaseous or liquid substance or any shaft or hole sunk or used in conjunction with such extraction, injection, or placement. See Virginia Code 45.2-1600

B. In addition to the provisions of § 45.2-1620, the following provisions shall apply to the order provided in subsection A:

1. Simultaneously with the filing of such application, the gas or oil owner applying for the order shall provide notice pursuant to the provisions of § 45.2-1618 to each person identified by the applicant as a potential owner of an interest in the coalbed methane gas underlying the tract that is the subject of the hearing.

2. The Board shall cause to be established an escrow account into which the payment for costs or proceeds attributable to the conflicting interests shall be deposited and held for the interest of the claimants.

3. The coalbed methane gas well operator shall deposit into the escrow account any money paid by a person claiming a contested ownership interest as a participating operator‘s share of costs pursuant to the provisions of § 45.2-1620 and the order of the Board.

4. The coalbed methane gas well operator shall deposit into the escrow account one-eighth of all proceeds attributable to the conflicting interests plus all proceeds in excess of ongoing operational expenses attributable to a participating or nonparticipating operator as provided for under § 45.2-1620 and the order of the Board.

5. The Board shall order payment of principal and accrued interest, less escrow account fees, from the escrow account to conflicting claimants only after (i) a final decision of a court of competent jurisdiction adjudicating the ownership of coalbed methane gas as between them is issued, (ii) a determination is reached by an arbitrator pursuant to § 45.2-1623, or (iii) an agreement is reached among all claimants owning conflicting estates in the tract in question or any undivided interest therein. Upon receipt of an affidavit from conflicting claimants affirming such decision, determination, or agreement, the designated operator shall, within 30 days, file with the Board a petition for disbursement of funds on behalf of the conflicting claimants. The petition shall include a detailed accounting of all funds deposited in escrow that are subject to the proposed disbursement. The amount to be paid to the conflicting claimants shall be determined on the basis of (a) the percentage of ownership interest of the conflicting claimants as shown in the operator’s supplemental filing, made part of the pooling order that established the escrow account; (b) the operator’s records of deposits attributable to those tracts for which funds are being requested; and (c) the records of the escrow account for the coalbed methane gas-drilling unit. The petition for disbursement shall be placed on the first available Board docket. Funds shall be disbursed within 30 days after the Board decision and receipt by the Department of all documentation required by the Board. The interests of any cotenants that have not been resolved by the agreement or by judicial decision shall remain in the escrow account.

6. Any person who does not make an election under the pooling order shall be deemed, subject to a final legal determination of ownership, to have leased his gas or oil interest to the coalbed methane gas well operator as provided in the pooling order.

1990, c. 92, § 45.1-361.22; 1999, c. 122; 2006, c. 498; 2010, c. 442; 2021, Sp. Sess. I, c. 387.

  Previous section
Next section  
 Article 2 Contents