Justia Energy, Oil & Gas Law Opinion Summaries

In this case involving a written assignment of an overriding royalty interest in minerals produced from land in Wheeler County the Supreme Court reversed the judgment of the court of appeals reversing the trial court's judgment declaring that the assignment conveyed an overriding royalty interest in all production under the lease, holding that the assignment unambiguously conveyed the assignor's overriding royalty interest in all production under the lease.The assignment in this case identified the single well that was producing at the time of the assignment, the land on which the well was located, and the lease under which the overriding royalty interest existed. At issue was whether the assignment conveyed the assignor's interest in all production under the identified lease or only in production from the identified well or from any well drilled on the identified land. The court of appeals held that the assignment conveyed only the 3.75 percent overriding royalty interest in production from the tract of land on which the well was located. The Supreme Court reversed, holding that the assignment unambiguously conveyed all of the interest that the assignor owned at the time of the conveyance. View "Piranha Partners v. Neuhoff" on Justia Law

The Fifth Circuit affirmed the district court's Federal Rule of Civil Procedure 12(b)(6) dismissal of LOGI's complaint for failure to state a claim. The magistrate judge and district court concluded that LOGI failed to provide Shell and Gulfport with notice under Article 137 of the Louisiana Mineral Code of their alleged failure to pay royalties timely and properly, and that LOGI consequently was barred from recovering under Article 138.Applying Louisiana law, the court held that the magistrate judge and district court did not err in determining that plaintiff's January 2014 communication was insufficient under Article 137. Furthermore, LOGI's second communication also did not satisfy the requirements of Article 137. View "Louisiana Oil & Gas Interests, LLC v. Shell Trading U.S. Co." on Justia Law

Cheryl Reese appealed an amended judgment entered after the district court granted summary judgment deciding ownership of certain mineral interests and the right to receive the mineral royalties and bonus payments. In 2005, Dennis Reese and Tia Reese-Young, who both owned an interest in the minerals at the time, entered into an oil and gas lease for the property. After several conveyances, Dennis and Cheryl Reese owned a 12.5% interest in the minerals as joint tenants, and Reese-Young owned a 12.5% interest in the minerals as a tenant in common with Dennis and Cheryl. In July 2008, Dennis and Cheryl conveyed their 12.5% interest to Reese-Young by quit claim deed and reserved a life estate interest in the minerals. Dennis died in September 2008. In 2017, Cheryl sued Tia Reese-Young to quiet title and for declaratory judgment determining that Cheryl was the sole remaining life tenant in the property and that she was entitled to all of the proceeds to be derived from the minerals during her lifetime. Reese-Young argued the deed creating the life estate in Cheryl Reese did not explicitly reserve to Cheryl Reese an interest in the royalties, the deed was unambiguous, there were no disputed issues of material fact, and Tia Reese-Young is entitled to all of the income derived from the oil and gas production as a matter of law. Cheryl argued the unambiguous language of the deed established she reserved a life estate in the minerals and she was entitled to receive the royalty payments under the open mines doctrine because an oil and gas lease had been executed and oil and gas were being produced before the life estate was created. When the district court ruled in favor of Reese-Young, Cheryl appealed. After review, the North Dakota Supreme Court concluded as a matter of law, Cheryl was entitled to the proceeds from the oil and gas production, including the royalties and bonus payments, and she was not required to hold the proceeds in trust for Reese-Young. Judgment was reversed. View "Reese v. Reese-Young" on Justia Law

The Fourth Circuit affirmed the district court's judgment holding that FERC's action against financial trading entities and an individual trader was timely-filed within the five-year statute of limitations on civil penalty actions under 28 U.S.C. 2462. The court held that FERC did not have a complete and present cause of action to file suit in federal district court until 60 days elapsed after it had issued the penalty assessment order and appellants refused to pay the assessed penalty. Therefore, FERC's claim had not accrued until then and this action was timely filed. View "Federal Energy Regulatory Commission v. Powhatan Energy Fund, LLC" on Justia Law

UGI builds natural gas pipelines. It obtained authorization to construct and operate an underground pipeline along 34.4 miles of land in Pennsylvania under the Natural Gas Act, 15 U.S.C. 717, The Landowners rejected UGI’s offers of compensation for rights of way, so UGI sought orders of condemnation. UGI prevailed; only the amount of compensation remained. The Landowners’ expert set the before-taking value of the land by comparing properties in the area and estimating what each is worth relative to the market but, in estimating the post-taking property values, the expert relied on his own “damaged goods theory,” drawing on his experience working in his grandfather’s appliance shop. The expert cited the impact on real estate values from the Three Mile Island nuclear incident in 1979, the Exxon Valdez Alaskan oil spill in 1989, and assorted leaking underground storage tanks. The expert’s reports contain no data relating to those incidents. The district court agreed “that some form of ‘stigma’ attaches to the property as a whole” and adjusted the awards accordingly. The Third Circuit vacated. Rule 702 requires reliable expert testimony that fits the proceedings. The expert testimony presented by the Landowners bound only to speculation and conjecture, not good science or other “good grounds.” View "UGI Sunbury LLC v. Permanent Easement for 1.7575 Acres" on Justia Law

The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) affirming a tax assessment against Rockies Express Pipeline, LLC (Rockies), holding that Rockies' gross receipts for tax year 2015 from the transportation of natural gas within the state of Ohio were not excluded from taxation under Ohio Rev. Code 5727.33(B)(1) as "receipts derived wholly from interstate business" and that such taxation does not violate the Commerce Clause.Rockies is an interstate pipeline that transports natural gas for others. For tax year 2015, the Ohio Tax Commissioner assessed Rockies on transactions in which natural gas entered and exited Rockies' pipeline within Ohio. Rockies petitioned the tax commissioner for reassessment, arguing that its receipts derived wholly from interstate business and were thus eligible for exclusion under section 5727.33(B)(1). The tax commissioner upheld the assessment. The BTA affirmed. The Supreme Court affirmed, holding (1) Rockies did not meet its burden of showing that its receipts fall under the exclusion in section 5727.33(B)(1) as "receipts derived wholly from interstate business"; and (2) imposing the tax under these circumstances does not violate the Commerce Clause because Rockies has substantial nexus with Ohio based on its physical presence within the State. View "Rockies Express Pipeline, LLC v. McClain" on Justia Law

Pitchblack and Whitetail filed suit against Hess, alleging that their overriding royalty interests in a number of oil and gas leases should continue to burden various top leases that Hess acquired over the subject leases.The Eighth Circuit affirmed the district court's grant of summary judgment for Hess, holding that Hess did not owe Pitchblack or Whitetail any fiduciary duty that would have required Hess to treat the top leases as extensions or renewals. Based on North Dakota law and the lack of any fiduciary duties expressed in the parties' agreement, the court held that Hess did not owe Pitchblack and Whitetail any fiduciary duty to extend or renew the subject leases. Consequently, Pitchblack and Whitetail's argument that the top leases were extensions or renewals of the subject leases based on a fiduciary duty fails. The court also held that the district court correctly concluded that the top leases were not extensions or renewals of the subject leases. Therefore, because the top leases were new leases, the extension or renewal clause did not attach the overriding royalty interests to the top leases. The court held that the top leases were thus not burdened by the overriding royalty interests. View "Hess Bakken Investments II, LLC v. Whitetail Wave" on Justia Law

The Fifth Circuit affirmed the district court's decision declining discretionary review of the appeal panel's affirmance of a Settlement Program determination that Walmart's submission was a "start-up business" claim. The court also affirmed the nearly $1 million award. In this case, Walmart submitted an economic loss claim under the Deepwater Horizon Settlement Agreement for one of its stores located on the Mississippi Gulf Coast. The store had reopened six months before the oil spill, having been closed ever since it was destroyed by Hurricane Katrina years earlier. The court held that the underlying appeal panel decision did not actually contradict or misapply the Settlement Agreement on a pressing question of implementation, and there was no split among appeal panels on the issue presented. View "BP Exploration & Production, Inc. v. Claimant ID 100354107" on Justia Law

At issue here were three EPA orders granting extensions of the small refinery exemption to the Clean Air Act (“CAA”). Those orders were not made available to the public, and were challenged by a group of renewable fuels producers who claimed they found out about the extensions through news articles or public company filings (“the Biofuels Coalition”), and their petition to the Tenth Circuit Court of Appeals raised multiple questions. The EPA opposed the Biofuels Coalition’s appeal, as did the three recipients of the small refinery extensions, who were granted leave to intervene. The Tenth Circuit concluded: (1) the Biofuels Coalition had standing to sue; (2) the Tenth Circuit had jurisdiction over this dispute; (3) the amended Clean Air Act allowed the EPA to grant an “extension” of the small refinery exemption, but not a stand-alone “exemption” in response to a convincing petition; and (4) the EPA exceeded its statutory authority in granting those petitions because there was nothing for the agency to “extend” because none of the three small refineries here consistently received an exemption in the years preceding its petition. The Tenth Circuit rejected the Biofuels Coalition’s claim that the EPA read the word “disproportionate” out of the statute, and disagreed with almost all of the Biofuels Coalition’s assertions that the EPA acted arbitrarily and capriciously in granting the extension petitions. The Tenth Circuit held the agency abused its discretion, however, by failing to address the extent to which the three refineries were able to recoup their compliance costs by charging higher prices for the fuels they sell. “The EPA has studied and staked out a policy position on this issue. One of the refineries expressly raised the issue in its extension petition. It was not reasonable for the agency to ignore it.” View "Renewable Fuels Assn. v. EPA" on Justia Law

The Supreme Court reversed the judgment of the court of appeals, holding that a devise of "all...right, title and interest in and to Ranch 'Las Piedras'" referred only to a surface estate by that name, as understood by the testatrix and beneficiaries at the time the will was made, and did not include the mineral estate.Respondents asserted that their father's life estate under their grandmother's will included her interest in not only the surface of Las Piedras Ranch but also the minerals beneath it. The trial court awarded judgment in favor of Respondents. The court of appeals affirmed. The Supreme Court reversed, holding that Respondents' claims were premised on an erroneous interpretation of their grandmother's will. Therefore, Petitioners were entitled to judgment as a matter of law. View "ConocoPhillips Co. v. Ramirez" on Justia Law