                                 CODE OF VIRGINIA

 POOLING OF INTERESTS FOR COALBED METHANE GAS WELLS; CONFLICTING CLAIMS TO
OWNERSHIP (§ 45.2-1622)

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.

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
   &#xA7; 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&#8217;s share of costs pursuant to the provisions of
   &#xA7; 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 &#xA7;
   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 &#xA7; 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&#8217;s supplemental filing, made part of the pooling order
   that established the escrow account; (b) the operator&#8217;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.

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