45.1-361.22 - Pooling of interests for coalbed methane gas wells; conflicting claims to ownership.
§ 45.1-361.22. Pooling of interests for coalbed methane gas wells;conflicting claims to ownership.
When there are conflicting claims to the ownership of coalbed methane gas,the Board, upon application from any claimant, shall enter an order poolingall interests or estates in the coalbed methane gas drilling unit for thedevelopment and operation thereof. In addition to the provisions of §45.1-361.21, the following provisions shall apply:
1. Simultaneously with the filing of such application, the gas or oil ownerapplying for the order shall provide notice pursuant to the provisions of §45.1-361.19 to each person identified by the applicant as a potential ownerof an interest in the coalbed methane gas underlying the tract which is thesubject of the hearing.
2. The Board shall cause to be established an escrow account into which thepayment for costs or proceeds attributable to the conflicting interests shallbe deposited and held for the interest of the claimants.
3. The coalbed methane gas well operator shall deposit into the escrowaccount any money paid by a person claiming a contested ownership interest asa participating operator's share of costs pursuant to the provisions of §45.1-361.21 and the order of the Board.
4. The coalbed methane gas well operator shall deposit into the escrowaccount one-eighth of all proceeds attributable to the conflicting interestsplus all proceeds in excess of ongoing operational expenses as provided forunder § 45.1-361.21 and the order of the Board attributable to aparticipating or nonparticipating operator.
5. The Board shall order payment of principal and accrued interest, lessescrow account fees, from the escrow account to conflicting claimants onlyafter (i) a final decision of a court of competent jurisdiction adjudicatingthe ownership of coalbed methane gas as between them; (ii) a determinationreached by an arbitrator pursuant to § 45.1-361.22:1; or (iii) an agreementamong all claimants owning conflicting estates in the tract in question orany undivided interest therein. Upon receipt of an affidavit from conflictingclaimants affirming such decision, determination, or agreement, thedesignated operator shall, within 30 days, file with the Board a petition fordisbursement of funds on behalf of the conflicting claimants. The petitionshall include a detailed accounting of all funds deposited in escrow that aresubject to the proposed disbursement. The amount to be paid to theconflicting claimants shall be determined based on the percentage ofownership interest of the conflicting claimants as shown in the operator'ssupplemental filing made part of the pooling order that established theescrow account, the operator's records of deposits attributable to thosetracts for which funds are being requested, and the records of the escrowaccount for the coalbed methane gas drilling unit. The petition fordisbursement shall be placed on the first available Board docket. Funds shallbe disbursed within 30 days after the Board decision and receipt by theDepartment of all documentation required by the Board. The interests of anycotenants that have not been resolved by the agreement or by judicialdecision shall remain in the escrow account.
6. Any person who does not make an election under the pooling order shall bedeemed, subject to a final legal determination of ownership, to have leasedhis gas or oil interest to the coalbed methane gas well operator as thepooling order may provide.
(1990, c. 92; 1999, c. 122; 2006, c. 498; 2010, c. 442.)