Justia Energy, Oil & Gas Law Opinion Summaries

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PLC, LLC and its co-party MH2, LLC (collectively PLC) held an overriding royalty interest in an Alaska oil and gas lease in the Ninilchik Unit. The unit operator applied to expand a subset of that unit called the Falls Creek Participating Area. After some back and forth over the extent of the expanded area, the Department of Natural Resources (DNR) approved the expansion. The lease area in which PLC held royalty interests was included in the original application by the unit operator, but it was left out of the approved application. PLC appealed the decision to DNR’s Commissioner (the Commissioner), who dismissed the appeal on the grounds that PLC lacked standing. PLC appealed to the superior court, which affirmed the Commissioner’s decision. Because PLC has a financial stake in DNR’s decision whether to approve the unit operator’s proposal for unit expansion to include the PLC-associated lease, the Alaska Supreme Court concluded PLC had standing, reversed the superior court decision, and remanded to the agency for further consideration. View "PLC, LLC. v. Alaska, Department of Natural Resources" on Justia Law

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In this contract dispute involving the correct interpretation of a mineral lease's "continuous drilling program" provision the Supreme Court held that the court of appeals erred in reversing partial summary judgment for the lessee on the contract-construction issue.Lessor and Lessee were the successors-in-interest to an oil-and-gas top lease covering a 30,450-acre parcel of land. At the end of the primary term, Lessee was required to reassign to Lessor all of Lessee's operating rights in each tract of the lease not then held by production unless Lessee was engaged in a "continuous drilling program." Notwithstanding Lessee's continued drilling operations, Lessor filed a suit seeking a declaration that the lease had terminated. The trial court granted partial summary judgment for Lessor, concluding that the lease had not terminated as to non-producing tracts. The court of appeals reversed. The Supreme Court reversed, holding (1) under the lease's special definition of drilling operations, activities other than spudding-in a well are sufficient to maintain the lease as to non-producing tracts; and (2) the record conclusively established that Lessee was engaged in a continuous drilling program within the meaning of the lease. View "Sundown Energy LP v. HJSA No. 3" on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals reversing the decision of the trial court concluding that indemnity claims fell within an exception to an arbitration clause and that the non-signatory assignees were bound by the agreement under a theory of assumption, holding that Plaintiffs' request for a declaratory judgment was subject to mandatory arbitration.As president of Wagner Oil Company, Bryan Wagner signed a purchase and sale agreement (PSA) purchasing several assets from Apache Corporation. The PSA contained an indemnification provision and an arbitration clause. Later, third-party surface landowners filed lawsuits against Apache, seeking damages for alleged environmental contamination caused by Apache's operation of the assets before they were sold. Apache filed a demand for arbitration against Plaintiffs, including Wagner Oil and Wagner, for indemnity and defense. Plaintiffs then filed a declaratory judgment action seeking a declaration that Plaintiffs were not parties to the PSA and therefore not subject to the arbitration and indemnity clauses. The trial court denied Apache's motion to compel arbitration. The court of appeals reversed. The Supreme Court affirmed, holding (1) the indemnity disputes over third party-claims fall within the scope of the arbitration clause and outside its exception; and (2) the Wagner Oil signees were bound by the arbitration clause. View "Wagner v. Apache Corp." on Justia Law

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The Federal Mine Safety and Health Amendments Act, 30 U.S.C. 801, requires the Secretary of the Department of Labor, through the Mine Safety and Health Administration (MSHA), to negotiate mine-specific ventilation plans with companies that operate the mines. In 2006-2018, Knight Hawk Coal operated its Prairie Eagle Mine pursuant to an MSHA-approved ventilation plan that permitted perimeter mining with 40-foot perimeter cuts. In 2018, MSHA conducted a ventilation survey at Prairie Eagle and concluded that the approved plan did not adequately ventilate the perimeter cuts. MSHA relied primarily on the results of chemical smoke tests, which involved survey team members observing smoke movement from a 44-foot distance. Months later, MSHA revoked the Prairie Eagle ventilation plan. After receiving a technical citation from MSHA for operating without an approved plan, Knight Hawk sought review by the Federal Mine Safety and Health Review Commission.The Commission’s ALJ found the revocation arbitrary and capricious, in part because the chemical smoke test results were unreliable and inconsistent and the Secretary ignored disagreements among MSHA ventilation survey team members regarding the results. The ALJ reinstated the previously-approved ventilation plan. The Commission affirmed, concluding that the Secretary failed to explain adequately why the existing ventilation plan was deficient. The D.C. Circuit denied the Secretary’s petition for review, finding that substantial evidence supports the ALJ’s finding. View "Secretary of Labor v. Knight Hawk Coal, LLC" on Justia Law

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In 2012, U.S. Fish and Wildlife Service scientists discovered that endangered mussels were dying on the banks of Indiana's Tippecanoe River. The Service focused on the upstream Oakdale Dam, which significantly restricts the flow of water downstream in order to generate hydroelectricity and to create a lake. The Service worked with Oakdale's operator to develop new procedures that would require the dam to release more water during droughts. After a lengthy process of interagency cooperation and public dialogue, the new procedures were approved by the Federal Energy Regulatory Commission, which has licensing authority over hydroelectric dams on federally regulated waters.Local governmental entities sought review of the Commission’s decision and the Service’s Biological Opinion upon which the Commission relied. The D.C. Circuit affirmed in part. The court rejected some challenges to the validity of the Biological Opinion, which were not raised on rehearing before the Commission. There was otherwise no error in the agencies’ expert scientific analyses. The agencies failed to adequately explain why the new dam procedures do not violate a regulation prohibiting the Service from requiring more than “minor” changes to the Commission’s proposal for dam operations. Because vacating the agencies’ decisions would subject the dam operator to contradictory legal obligations imposed by separate agencies, the court remanded to the Commission without vacatur for further proceedings. View "Shafer & Freeman Lakes Environmental Conservation Corp. v. Federal Energy Regulatory Commission" on Justia Law

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In an appeal by allowance, the Pennsylvania Supreme Court considered whether the Commonwealth, by the Office of Attorney General (OAG), could bring claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) on behalf of private landowners against a natural gas exploration and production company for its alleged deceptive, misleading, and unfair practices in obtaining natural gas leases from the landowners. The Supreme Court concluded the OAG could not bring claims under the UTPCPL on behalf of private landowners against Anadarko Petroleum Corporation and Anadarko E&P Onshore, L.L.C. (Anadarko) for its alleged unfair and deceptive practices in acquiring natural gas leases from the landowners. Furthermore, the Court found its resolution of the first issue rendered the second issue moot. The Court affirmed the portion of the Commonwealth Court’s decision that reversed the trial court order overruling Anadarko’s preliminary objections to Count III of the OAG’s second amended complaint, and otherwise reversed the order of the Commonwealth Court. View "Com. v. Chesapeake Energy, et al (Anadarko, Aplt.)" on Justia Law

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In this second action arising out of a joint effort by TRO-X, L.P. and Eagle Oil & Gas Co. to acquire and sell oil-and-gas the Supreme Court affirmed the judgment of the court of appeals reversing the trial court's grant of summary judgment for Eagle, holding that Eagle did not conclusively establish the affirmative defenses that were the basis of its summary judgment motion.In its first suit, TRO-X alleged that Eagle deprived TRO-X of its right to acquire its share of mineral leases that Eagle retained as part of the leases' sale. The court of appeals determined that TRO-X had not been deprived of equitable title to those interests because TRO-X had always held them. In this second suit, TRO-X claimed that Eagle failed to remit its share of income generated from production on the interests that commenced after the first trial's conclusion. The trial court granted summary judgment for Eagle, and the court of appeals reversed. The Supreme Court affirmed, holding that Eagle did not conclusively establish the affirmative defenses of res judicata, statute of limitations, or waiver. View "Eagle Oil & Gas Co. v. TRO-X, L.P." on Justia Law

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The Supreme Court reversed the judgment of the Fifth District Court of Appeals reversing the decision of the trial court declaring that Appellants owned certain mineral rights and quieting title to the rights in their favor, holding that the reservation of mineral rights in this case was preserved by Ohio Rev. Code 5301.49(A).At issue was whether a reference to a reservation of mineral rights in a surface landowner's root of title and in subsequently recorded title transactions was sufficiently specific to preserve the reservation of the mineral rights under Ohio's Marketable Title Act when the reference does not name the record owner of the rights. The Supreme Court held (1) in enacting section 5301.49(A), the Legislature did not require a reference to an interest predating the root of title to name the interest's owner in order to preserve the interest; and (2) in this case, notwithstanding the failure to name the owner of the reserved mineral rights, the reference was sufficient to preserve the rights from being extinguished under the Act. View "Erickson v. Morrison" on Justia Law

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The Supreme Court affirmed in part and reversed in part the trial court's decision resolving all issues in this oil and gas dispute favorably to the lessors of a mineral lease and awarding damages for underpayment of royalties, holding that remand was required to determine damages, if any, for off-premises compressor-fuel use.One lease provision in this case required the lessee to "compute and pay royalties on the gross value received." The other lease provision at issue required royalties to be "computed at the end of the mouth of the well." The Supreme Court affirmed the lower courts' judgments except as to the portion of the judgment awarding damages for royalties on compressor fuel, holding (1) the lower courts correctly concluded that the lessee's deduction of postproduction costs was in error because the mineral lease explicitly resolved the conflict in favor of a gross-proceeds calculation; and (2) because the compressor-fuel damages were not conclusively established in the amount awarded, remand was required. View "BlueStone Natural Resources II, LLC v. Randle" on Justia Law

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Taylor Energy leased and operated Gulf of Mexico oil and gas properties, on the Outer Continental Shelf, offshore Louisiana. In 2004, Hurricane Ivan destroyed those operations, causing oil leaks. The Outer Continental Shelf Lands Act, the Clean Water Act, and the Oil Pollution Act required Taylor to decommission the site and stop the leaks. Taylor and the Department of the Interior developed a plan. Interior approved Taylor’s assignments of its leases to third parties with conditions requiring financial assurances. Three agreements addressed how Taylor would fund a trust account and how Interior would disburse payments. Taylor began decommissioning work. In 2009, Taylor proposed that Taylor “make the full final deposit into the trust account,” without any offsets, and retain all insurance proceeds. Interior rejected Taylor’s proposal. Taylor continued the work. In 2011, Taylor requested reimbursement from the trust account for rig downtime costs. Interior denied the request. In 2018, the Interior Board of Land Appeals (IBLA) affirmed Interior’s 2009 and 2011 Decisions.Taylor filed suit in the Claims Court, asserting contract claims. The Federal Circuit affirmed the dismissal of the suit, rejecting “Taylor’s attempt to disguise its regulatory obligations as contractual ones,” and stating an IBLA decision must be appealed to a district court.In 2018, Taylor filed suit in a Louisiana district court, seeking review of the IBLA’s 2018 decision and filed a second complaint in the Claims Court, alleging breach of contract. On Taylor's motion, the district court transferred the case, citing the Tucker Act. The Federal Circuit reversed. The Claims Court does not have subject matter jurisdiction over this case. Taylor is challenging the IBLA Decision and must do so in district court under the APA. View "Taylor Energy Co., L.L.C. v. Department of the Interior" on Justia Law