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Main statute: Oil and Gas Lease Act (Act of July 20, 1979, P.L. 183), as amended.
| Topic | What the statute says | Citation |
|---|---|---|
| First payment deadline | Unconventional, unless the lease provides otherwise: no later than 120 days from first sale | Pa. Oil and Gas Lease Act § 3.3(e)(1)(i); Pa. Oil and Gas Lease Act § 3.3 (heading) |
| Later payments | Unconventional, unless the lease provides otherwise: 60 days after the end of the month of sale | Pa. Oil and Gas Lease Act § 3.3(e)(1)(ii) |
| Minimum payment and aggregation | Unconventional: annual when 12 months total less than $100 | Pa. Oil and Gas Lease Act § 3.3(f) |
| Interest on late payments | Unconventional, unless the lease provides otherwise: penalty at the legal rate (six percent per annum) | Pa. Oil and Gas Lease Act § 3.3(e)(3); Loan Interest and Protection Law § 202 (Act of Jan. 30, 1974, P.L. 13, No. 6) |
| Suspense and withheld payments | Unconventional: deadlines do not apply for title defects, bona fide disputes or missing owners | Pa. Oil and Gas Lease Act § 3.3(e)(2) |
| Division orders | The lease controls; a division order may not amend it | Pa. Oil and Gas Lease Act § 1.2 (definition of "Division order"); Pa. Oil and Gas Lease Act § 3.4 |
| Owner remedies, notice and attorney fees | Unconventional: certified-mail request for payment information; suit after 60 days | Pa. Oil and Gas Lease Act § 3.3(c) |
| Check-stub disclosures | Statutory list of items for conventional and unconventional production | Pa. Oil and Gas Lease Act § 3.2; Pa. Oil and Gas Lease Act § 3.2(5); Pa. Oil and Gas Lease Act § 3.3(a)(1); Pa. Oil and Gas Lease Act § 3.3(a)(5); Pa. Oil and Gas Lease Act § 3.3(b); Pa. Oil and Gas Lease Act § 3.3(a)(10) |
| Unclaimed royalties (escheat) | No mineral-specific section; Treasury guidance lists 3 years | Pa. Fiscal Code § 1301.10, clause 1 (Act of Apr. 9, 1929, P.L. 343, No. 176); Pennsylvania Treasury, Pennsylvania Dormancy Matrix |
For oil, gas and natural gas liquids from an unconventional formation, proceeds due under the lease must be remitted no later than 120 days from the date of first sale, except as provided in the $100 accumulation rule or as otherwise provided in the lease. No first-payment deadline was found for conventional-formation production.
Except as provided in the accumulation rule or as otherwise provided in the lease, proceeds due under the lease must be remitted no later than 120 days from the date of the first sale. (Pa. Oil and Gas Lease Act § 3.3(e)(1)(i))
Statute text “Except as provided under subsection (f) or as otherwise provided in the lease, all proceeds due and payable to the royalty owner under the terms of the lease from the sale or production of oil, gas and natural gas liquids shall be remitted in a timely manner as follows: (i) no later than 120 days from the date of the first sale of oil, gas or natural gas liquids; and”
The payment-timing rule sits in the section governing production from an unconventional formation. (Pa. Oil and Gas Lease Act § 3.3 (heading))
Statute text “Section 3.3. Payment information to royalty owners for oil, natural gas and natural gas liquids from an unconventional formation.”
After the first payment, proceeds from unconventional-formation production must be remitted within 60 days after the end of the month in which the production is sold, unless the lease provides otherwise.
Later payments are due within 60 days after the end of the month when the production is sold. (Pa. Oil and Gas Lease Act § 3.3(e)(1)(ii))
Statute text “(ii) thereafter, within 60 days after the end of the month when the production is sold.”
For oil, gas and natural gas liquids from an unconventional formation (§ 3.3), proceeds may be accumulated and remitted annually when a 12-month accumulation totals less than $100, unless production permanently ceases or payment responsibility is relinquished or transferred. No minimum-payment rule was found for conventional-formation production.
For unconventional-formation production, proceeds may be accumulated and paid annually when 12 months of proceeds total less than $100, unless production permanently ceases or payment responsibility is relinquished or transferred. (Pa. Oil and Gas Lease Act § 3.3(f))
Statute text “Proceeds from the production of oil, gas and natural gas liquids may be accumulated and remitted annually for a 12-month accumulation of proceeds totaling less than $100, unless production permanently ceases or a relinquishment or transfer of the payment responsibility occurs.”
For unconventional-formation production (§ 3.3), failure to remit timely under § 3.3(e)(1) results in a mandatory interest penalty at the legal rate of interest under section 202 of the Loan Interest and Protection Law, which is six percent per annum, running until payment is made, unless the lease provides otherwise. The statute does not say whether the interest is simple or compounded. No late-payment interest rule was found for conventional-formation production.
For unconventional-formation production, late payment triggers a mandatory interest penalty at the legal rate under section 202 of the Loan Interest and Protection Law until the proceeds are paid, unless the lease provides otherwise. (Pa. Oil and Gas Lease Act § 3.3(e)(3))
Statute text “Failure to remit a timely payment of the proceeds as required under paragraph (1) shall result in a mandatory payment of an interest penalty to be set at the legal rate of interest in accordance with section 202 of the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law, until the payment of production proceeds due and payable to the royalty owner under the terms of the lease is made, unless otherwise provided for in the lease.”
The legal rate of interest is six percent per annum. (Loan Interest and Protection Law § 202 (Act of Jan. 30, 1974, P.L. 13, No. 6))
Statute text “Reference in any law or document enacted or executed heretofore or hereafter to "legal rate of interest" and reference in any document to an obligation to pay a sum of money "with interest" without specification of the applicable rate shall be construed to refer to the rate of interest of six per cent per annum.”
For unconventional-formation production (§ 3.3), the payor is not required to meet the payment deadlines when there is a lack of marketable record title in the royalty owner, a bona fide dispute about the owner's interest, or the owner is missing or cannot be located. The statute does not say whether interest accrues on funds withheld for these reasons.
The unconventional-formation payment deadlines do not apply when title is unmarketable, the interest is in bona fide dispute, or the owner is missing or cannot be located. (Pa. Oil and Gas Lease Act § 3.3(e)(2))
Statute text “A payor shall not be required to comply with paragraph (1) if any of the following apply: (i) There is a lack of marketable record title in the royalty owner. (ii) There is bona fide dispute concerning the royalty owner's interest. (iii) The owner of interest is missing or not able to be located.”
A division order is defined as an agreement signed by a royalty owner directing distribution of proceeds. If a division order conflicts with the oil and gas lease, the lease controls, and a division order may not amend or supplement the lease. No provision was found on when a payor may require a division order.
A division order is an agreement signed by a royalty owner directing distribution of sale proceeds. (Pa. Oil and Gas Lease Act § 1.2 (definition of "Division order"))
Statute text “"Division order." An agreement signed by a royalty owner directing the distribution of proceeds from the sale of oil, gas, casing head gas or other related hydrocarbons.”
The lease controls over a conflicting division order, and a division order may not amend or supplement the lease. (Pa. Oil and Gas Lease Act § 3.4)
Statute text “If there is any conflict between a division order and an oil and gas lease, the terms and conditions of the oil and gas lease shall control. A division order may not amend or supplement the terms and conditions of an oil and gas lease.”
For unconventional-formation payments, a royalty owner who does not receive the required payment information may send a certified-mail written request identifying the lease; if, within 60 days, the payor does not provide the information or does not supply a reason for not providing it, the owner may sue to enforce the section and recover attorney fees and court costs. Late payment carries the statutory interest penalty (see late-payment interest). No statutory lease-cancellation remedy for nonpayment was found in the Act.
The owner may send a written request for missing payment information by certified mail, identifying the lease. (Pa. Oil and Gas Lease Act § 3.3(c))
Statute text “If a payor does not provide the payment information to a royalty owner as required under this section, the royalty owner may send a written request for the information to the payor by certified mail. The royalty owner shall identify the lease information under subsection (a)(1) in the written request.”
If the payor does not respond within 60 days, the owner may bring a civil action and recover attorney fees and court costs. (Pa. Oil and Gas Lease Act § 3.3(c))
Statute text “If the payor does not provide payment information or does not supply a reason for not providing the payment information within 60 days after receiving the written request, the royalty owner may bring a civil action to enforce the provisions of this section and to recover any resulting attorney fees or court costs incurred in the civil action.”
Separate check-stub lists apply to conventional-formation and unconventional-formation production. Each payment must include, at a minimum, ten items on the check stub or an attachment (unless otherwise provided on a regular basis): identification of the lease/well, production month and year, volumes, price, taxes and deductions, net and gross values, the owner's decimal interest, the owner's gross and net shares, and payor contact information. For unconventional wells the identifier must include the API number, and deductions must be shown by category per well; a summary format is allowed only by mutual consent and must disclose the right to the full information. Electronic delivery is allowed if already in use or by mutual written consent.
For conventional-formation production, each payment must carry minimum information on the check stub or an attachment. (Pa. Oil and Gas Lease Act § 3.2)
Statute text “Whenever payment is made to a royalty owner for the production of oil, gas or natural gas liquids from a conventional formation, pursuant to an oil and gas lease, all of the following information, at a minimum, shall be included on the check stub provided to the royalty owner or on an attachment to the form of payment provided to the royalty owner, unless the information is otherwise provided on a regular basis:”
The conventional list includes total severance and other production taxes and other deductions permitted under the lease. (Pa. Oil and Gas Lease Act § 3.2(5))
Statute text “(5) Total amount of severance and other production taxes and other deductions permitted under the lease, with the exception of windfall profit tax.”
For unconventional-formation production, the statement must identify the well by common well name and API number. (Pa. Oil and Gas Lease Act § 3.3(a)(1))
Statute text “(1) A common well name and the American Petroleum Institute identification number that identifies the well for which payment is being made.”
For unconventional wells, deductions must be shown as aggregate amounts for each category per well, including severance and other production taxes. (Pa. Oil and Gas Lease Act § 3.3(a)(5))
Statute text “(5) The aggregate amounts for each category of deductions for each well incurred by the payor which reduces the royalty owner's payment, including all severance and other production taxes.”
A summary statement is allowed only by mutual consent and must disclose the owner's right to the full information on certified-mail request. (Pa. Oil and Gas Lease Act § 3.3(b))
Statute text “A payor may make available and provide for a summary statement format for a royalty owner to receive the information under subsection (a) upon the mutual consent of the royalty owner and payor. The summary statement shall conspicuously disclose that the royalty owner has the right to receive the information under subsection (a) in its entirety upon written request, sent by certified mail, to the payor.”
Both lists end with payor contact information including an address and telephone number. (Pa. Oil and Gas Lease Act § 3.3(a)(10))
Statute text “(10) Payor's contact information, including an address and telephone number.”
Pennsylvania's unclaimed property law has no section specific to mineral proceeds. Its general clause presumes abandoned property not otherwise covered that is admitted in writing by the holder and adjudicated to be due, is held or owing in the ordinary course of the holder's business, has remained unclaimed for more than three years after it became payable or distributable, and in which the owner has not indicated an interest. Separately, the Pennsylvania Treasury's dormancy matrix, which is agency guidance rather than statute text, lists Mineral Proceeds/Royalties at 3 years.
Property not otherwise covered is presumed abandoned when it is admitted in writing by the holder and adjudicated to be due, is held or owing in the ordinary course of the holder's business, has remained unclaimed for more than three years after it became payable or distributable, and the owner has not indicated an interest in it. (Pa. Fiscal Code § 1301.10, clause 1 (Act of Apr. 9, 1929, P.L. 343, No. 176))
Statute text “All property, not otherwise covered by this article, which is admitted in writing by the holder and adjudicated to be due, which is held or owing in the ordinary course of the holder's business, which has remained unclaimed by the owner for more than three (3) years after it became payable or distributable and in which the owner has not indicated an interest is presumed abandoned and unclaimed”
The Pennsylvania Treasury's dormancy matrix (agency guidance, not statute text) lists Mineral Proceeds/Royalties with a 3-year dormancy period. (Pennsylvania Treasury, Pennsylvania Dormancy Matrix)
Statute text “Mineral Proceeds/Royalties. ........................................................................ 3”
Official unclaimed property search: Pennsylvania Treasury unclaimed property.
For oil, gas and natural gas liquids from an unconventional formation, proceeds due under the lease must be remitted no later than 120 days from the date of first sale, except as provided in the $100 accumulation rule or as otherwise provided in the lease. No first-payment deadline was found for conventional-formation production. (Pa. Oil and Gas Lease Act § 3.3(e)(1)(i); Pa. Oil and Gas Lease Act § 3.3 (heading))
After the first payment, proceeds from unconventional-formation production must be remitted within 60 days after the end of the month in which the production is sold, unless the lease provides otherwise. (Pa. Oil and Gas Lease Act § 3.3(e)(1)(ii))
For oil, gas and natural gas liquids from an unconventional formation (§ 3.3), proceeds may be accumulated and remitted annually when a 12-month accumulation totals less than $100, unless production permanently ceases or payment responsibility is relinquished or transferred. No minimum-payment rule was found for conventional-formation production. (Pa. Oil and Gas Lease Act § 3.3(f))
For unconventional-formation production (§ 3.3), failure to remit timely under § 3.3(e)(1) results in a mandatory interest penalty at the legal rate of interest under section 202 of the Loan Interest and Protection Law, which is six percent per annum, running until payment is made, unless the lease provides otherwise. The statute does not say whether the interest is simple or compounded. No late-payment interest rule was found for conventional-formation production. (Pa. Oil and Gas Lease Act § 3.3(e)(3); Loan Interest and Protection Law § 202 (Act of Jan. 30, 1974, P.L. 13, No. 6))
For unconventional-formation production (§ 3.3), the payor is not required to meet the payment deadlines when there is a lack of marketable record title in the royalty owner, a bona fide dispute about the owner's interest, or the owner is missing or cannot be located. The statute does not say whether interest accrues on funds withheld for these reasons. (Pa. Oil and Gas Lease Act § 3.3(e)(2))
A division order is defined as an agreement signed by a royalty owner directing distribution of proceeds. If a division order conflicts with the oil and gas lease, the lease controls, and a division order may not amend or supplement the lease. No provision was found on when a payor may require a division order. (Pa. Oil and Gas Lease Act § 1.2 (definition of "Division order"); Pa. Oil and Gas Lease Act § 3.4)
For unconventional-formation payments, a royalty owner who does not receive the required payment information may send a certified-mail written request identifying the lease; if, within 60 days, the payor does not provide the information or does not supply a reason for not providing it, the owner may sue to enforce the section and recover attorney fees and court costs. Late payment carries the statutory interest penalty (see late-payment interest). No statutory lease-cancellation remedy for nonpayment was found in the Act. (Pa. Oil and Gas Lease Act § 3.3(c))
Separate check-stub lists apply to conventional-formation and unconventional-formation production. Each payment must include, at a minimum, ten items on the check stub or an attachment (unless otherwise provided on a regular basis): identification of the lease/well, production month and year, volumes, price, taxes and deductions, net and gross values, the owner's decimal interest, the owner's gross and net shares, and payor contact information. For unconventional wells the identifier must include the API number, and deductions must be shown by category per well; a summary format is allowed only by mutual consent and must disclose the right to the full information. Electronic delivery is allowed if already in use or by mutual written consent. (Pa. Oil and Gas Lease Act § 3.2; Pa. Oil and Gas Lease Act § 3.2(5); Pa. Oil and Gas Lease Act § 3.3(a)(1); Pa. Oil and Gas Lease Act § 3.3(a)(5); Pa. Oil and Gas Lease Act § 3.3(b); Pa. Oil and Gas Lease Act § 3.3(a)(10))
Pennsylvania's unclaimed property law has no section specific to mineral proceeds. Its general clause presumes abandoned property not otherwise covered that is admitted in writing by the holder and adjudicated to be due, is held or owing in the ordinary course of the holder's business, has remained unclaimed for more than three years after it became payable or distributable, and in which the owner has not indicated an interest. Separately, the Pennsylvania Treasury's dormancy matrix, which is agency guidance rather than statute text, lists Mineral Proceeds/Royalties at 3 years. (Pa. Fiscal Code § 1301.10, clause 1 (Act of Apr. 9, 1929, P.L. 343, No. 176); Pennsylvania Treasury, Pennsylvania Dormancy Matrix)
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Educational only — not legal advice; statutes change, so confirm the current version and consult a qualified attorney for your situation. For a question about a specific payment, consult an attorney licensed in Pennsylvania.
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