Texas House Bill HB2883

Texas 2021 - 87th Regular

Caption

Relating to the information a payor of the proceeds of production from an oil and gas well is required to provide a payee.

Impact

By establishing clear obligations for payors, the bill seeks to protect payees from being coercively requested to sign documents without adequate information. This change is poised to enhance transparency in transactions related to oil and gas production, thereby fostering a more equitable relationship between payors and payees. Furthermore, the requirement for timely responses from payors serves to enforce accountability within the industry, especially in matters relating to financial transactions arising from production proceeds.

Summary

House Bill 2883 focuses on enhancing the rights of payees regarding information needed to ratify lease agreements and division orders related to oil and gas production. The bill mandates that when a payor requests a payee to sign documents, such as a ratification of a lease or a division order, the payor must supply the payee with a copy of the relevant documents upon their written request. This requirement aims to ensure that payees are adequately informed and can exercise their rights concerning the agreements they are being asked to ratify.

Contention

There may be some contention surrounding this bill, particularly from payors who could view these mandates as additional regulatory burdens. They may argue that the requirements could complicate the operational aspects of executing lease and division order agreements. Conversely, advocates for the payees may assert that the bill is essential for safeguarding their rights and ensuring they are not misled or rushed into signing important documents without a full understanding of their implications.