Justia Energy, Oil & Gas Law Opinion Summaries

The case involves Continental Resources, Inc., an Oklahoma oil and gas company, and Rick and Rosella Fisher, who own a farm in North Dakota. Continental drilled a horizontal disposal well on the Fishers' property to inject saltwater waste into the pore space of a rock formation known as the Lodgepole. The Fishers sued Continental, claiming that the company had no right to drill the well. The district court ruled that Continental had the right to proceed with drilling and using the well as long as the use was reasonable, but the Fishers were entitled to compensation for any proven damage to their pore space.The district court denied Continental's motion for judgment as a matter of law and the jury awarded the Fishers $22,440.25. Continental then renewed its motion for judgment as a matter of law and, in the alternative, moved for a new trial. The Fishers moved for an award of attorneys’ fees and costs. The district court denied Continental’s motion and awarded the Fishers $249,243.60 in attorneys’ fees and $87,639.89 in costs.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that there was sufficient evidence to support the jury’s verdict. The court also held that the district court did not abuse its discretion in admitting the third-party contracts and Rick Fisher’s testimony. Finally, the court affirmed the district court's award of attorneys’ fees and costs to the Fishers. View "Continental Resources, Inc. v. Fisher" on Justia Law

This case involves a dispute over a lease agreement between Tera, L.L.C., and Rice Drilling D, L.L.C., and Gulfport Energy Corporation. The lease granted Rice Drilling and Gulfport Energy certain mineral rights in the geological formations known as the Marcellus Shale and the Utica Shale beneath Tera’s land. The dispute arose when Tera claimed that the defendants had intentionally drilled six wells into the Point Pleasant formation, which Tera argued was not included in the lease agreement.The trial court awarded summary judgment to Tera, concluding that the lease agreement clearly limited the rights granted to the defendants to the Marcellus and Utica formations and reserved rights to all other formations. The court also found that the defendants had trespassed in bad faith, and a jury awarded Tera over $40 million in damages.The Court of Appeals for Belmont County affirmed the trial court's decision. The court concluded that the lease language was unambiguous and that the phrase "Utica Shale" had a technical stratigraphic meaning that did not include the Point Pleasant formation.The Supreme Court of Ohio reversed the lower courts' decisions. The court found that the lease agreement was ambiguous because it did not clearly establish whether the Point Pleasant was or was not to be considered part of the Utica Shale. The court concluded that resolving the meaning of ambiguous terms in a contract is a matter of factual determination for the fact-finder. Therefore, the court remanded the case to the trial court for further proceedings. View "Tera, L.L.C. v. Rice Drilling D, L.L.C." on Justia Law

Latigo Oil & Gas, Inc., an Oklahoma corporation, filed a lawsuit against BP America Production Company, a Delaware corporation, to enforce its preferential right to purchase certain mineral interests that BP had offered for sale as part of a package deal to a third party. Prior to trial, Latigo requested a temporary restraining order and preliminary injunctive relief to prevent BP from selling the interests to the third-party buyer pending trial. The trial court granted Latigo's request for preliminary injunctive relief.The Court of Civil Appeals reversed the trial court's decision, finding that the evidence did not show Latigo was likely to succeed on the merits. The court held that BP did not owe Latigo a duty to provide a good-faith allocation of value to the interests burdened by Latigo's preferential right. It found that whether the allocations provided by BP were inflated as alleged by Latigo was irrelevant, as the notices provided by BP met the terms of the operating agreements.The Supreme Court of the State of Oklahoma granted certiorari and held that the trial court's grant of injunctive relief was not an abuse of discretion. The court noted that while there was no binding precedent on whether an allocation of value within a package deal must be made in good faith, substantial support for Latigo's position could be found in both Oklahoma precedent and in other jurisdictions. The court affirmed the trial court's decision to grant preliminary injunctive relief and remanded for further proceedings consistent with its opinion. View "LATIGO OIL & GAS v. BP AMERICA PRODUCTION CO." on Justia Law

The case revolves around a dispute between Anne Carl and related parties (the royalty holders) and Hilcorp Energy Company (the producer) over the calculation of royalties from a mineral lease. The lease stipulates that royalties are to be calculated based on the market value of the minerals "at the well," meaning before any post-production efforts have increased their value. However, the minerals are often not sold until after these efforts have taken place, resulting in a higher sale price. To account for this disparity, the producer deducted the proportionate share of post-production costs from the royalty payment, a method known as the "workback method." The royalty holders were dissatisfied with this reduced payment and sued, arguing that the lease required payment of a royalty on all gas produced from the well.The case was initially heard in a federal district court, which sided with the producer. The court found that the lease did indeed convey an "at-the-well" royalty, meaning the royalty holders were obligated to share proportionately in the post-production costs. The court also found no fault with the producer's method of accounting for these costs, which involved using some of the gas produced from the well to power post-production activities conducted off the lease. The value of this gas was considered a post-production cost and was therefore deducted from the total volume of gas used to calculate the royalty.The case was then certified to the Supreme Court of Texas, which affirmed the lower court's decision. The court agreed with the producer's interpretation of the lease and found that the royalty holders, as holders of an "at-the-well" royalty, were indeed obligated to bear their usual share of post-production costs. The court also found that the producer's method of accounting for these costs was permissible. The court concluded that the royalty holders were not shortchanged and that the producer's calculation was one acceptable way to convert the downstream sales price into an at-the-well market value on which to pay the royalty, as required by the lease. View "CARL v. HILCORP ENERGY COMPANY" on Justia Law

This case involves a dispute over the interpretation of an assignment of mineral rights. In 1987, Shell Western E&P, Inc. sold a large bundle of Texas oil-and-gas properties to the predecessor of Citation 2002 Investment LLC. The assignment included an exhibit that listed the properties being transferred, some of which included depth specifications. In 1997, Shell purported to assign all its interests in the same leases to Occidental Permian’s predecessor. Occidental claimed that Shell had reserved to itself interests beyond the depth specifications of the 1987 assignment. Citation, however, claimed that it received the entirety of Shell’s leasehold interests in the 1987 assignment.The trial court granted Occidental’s motion for summary judgment, concluding that the depth-specified tracts listed in the exhibit reserved to Shell the mineral-estate depths beyond the notations. Citation appealed, and the court of appeals reversed, holding that the 1987 assignment unambiguously conveyed the entirety of Shell’s interests in the leasehold estates without reserving portions of those interests to Shell.The Supreme Court of Texas affirmed the court of appeals' decision. The court held that the disputed assignment unambiguously conveyed all right, title, and interest that Shell owned in the leasehold estates listed in the exhibit, without reserving portions of those interests to itself through further notations about specific tracts within those estates. The court reasoned that the assignment's broad granting language, coupled with the absence of explicit reservation language, indicated that the entirety of the leasehold interests were conveyed. The court also noted that the depth specifications in the exhibit served a concrete purpose of providing notice of depth-specific third-party interests that continue after the leasehold estates are assigned. View "OCCIDENTAL PERMIAN, LTD. v. CITATION 2002 INVESTMENT LLC" on Justia Law

The case involves Mountain Valley Pipeline, LLC (Appellee), which is constructing an interstate natural gas pipeline. The company acquired easements on properties along the pipeline’s route through condemnation actions under the Natural Gas Act. One such property was owned by Frank Terry, John Coles Terry, and Elizabeth Terry (Appellants), which was encumbered by temporary and permanent easements on 8.37 acres. After the district court granted Appellee immediate possession of the easements, the case proceeded to a jury trial to determine the amount of just compensation owed by Appellee to Appellants for the easements. The jury rendered a $523,327 verdict, which Appellee challenged, arguing that the verdict resulted from the jury improperly mixing expert testimony. The district court agreed with Appellee and granted judgment as a matter of law, vacating the jury verdict and entering a judgment for $261,033.The United States Court of Appeals for the Fourth Circuit reversed the district court’s judgment as a matter of law and remanded with instructions to reinstate the $523,327 verdict. The court held that the jury’s verdict was within the range of credited testimony and could be supported using residential values alone, without the need to venture beyond the credited testimony. The court also reversed the district court’s grant of a new trial. Additionally, the court vacated and remanded the district court’s order denying Appellants’ second motion for attorney’s fees and costs, leaving these issues for the district court to consider in the first instance. View "Mountain Valley Pipeline, LLC v. 8.37 Acres of Land" on Justia Law

This case involves a dispute over the Environmental Protection Agency's (EPA) implementation of the Clean Air Act’s Renewable Fuel Standards Program. The program requires the petroleum industry to introduce increasing volumes of renewable fuel into the nation's transportation fuel supply each year. However, Congress overestimated the speed at which domestic production of renewable fuel could expand, leading the EPA to reduce the statutorily required renewable fuel requirements annually.The case was brought before the United States Court of Appeals for the District of Columbia Circuit by two sets of petitioners. The first set, the Biofuel Petitioners, produce cellulosic biofuels and argue that the EPA's standards are set too low. The second set, the Refiner Petitioners, are fossil fuel refiners and retailers subject to the volume requirements and contend that the standards are too high.The court held that the EPA complied with the law and reasonably exercised its discretion in setting the renewable fuel requirements for the years 2020, 2021, and 2022. The court therefore denied the petitions for review. The court found that the EPA had the statutory authority to impose a supplemental volume for 2022 to make up for volume that should have been satisfied in 2016. The court also concluded that the EPA's new formula for calculating the annual percentage standards was not arbitrary or capricious. View "Sinclair Wyoming Refining Company LLC v. EPA" on Justia Law

The case revolves around the ownership of mineral rights beneath a dedicated street in Greeley, Colorado. The dispute arose between Great Northern Properties, LLLP (GNP) and Extraction Oil and Gas, Inc., Richmark Energy Partners, LLC, and Richmark Royalties, LLC (collectively, Extraction) over who is entitled to receive certain oil and gas royalty payments. The issue at hand was how to determine who holds title to the mineral estate under a dedicated right-of-way when a grantor, who has an interest in the mineral rights under that right-of-way, executes a conveyance of the land abutting the right-of-way that is silent as to those rights.The district court agreed with Extraction, concluding that the centerline presumption could be applied to a conveyance of the mineral estate beneath a right-of-way. The court of appeals affirmed the district court’s determination of law. However, the court of appeals also concluded that the centerline presumption should not apply if the grantor retains ownership of any property abutting the right-of-way.The Supreme Court of the State of Colorado affirmed the court of appeals' decision that a conveyance of land abutting a right-of-way is presumed to carry title to the centerline of both the surface and mineral estates beneath a dedicated right-of-way to the owners of land abutting that right-of-way. However, the Supreme Court reversed the court of appeals' conclusion that the centerline presumption cannot apply if a grantor retains ownership of any property abutting the subject right-of-way. The Supreme Court held that the centerline presumption applies if the party claiming ownership to land abutting a dedicated right-of-way establishes that the grantor conveyed ownership of land abutting a right-of-way, the grantor owned the fee to both the surface estate and the mineral rights underlying the right-of-way at the time of conveyance, and no contrary intent appears on the face of the conveyance document. View "Great Northern Properties v. Extraction Oil and Gas" on Justia Law

The City of Valdez in Alaska appealed two orders by the Regulatory Commission of Alaska (RCA) related to the transfer of the Trans-Alaska Pipeline System (TAPS) from BP Pipelines (Alaska) Inc. (BPPA) to Harvest Alaska, LLC. The first order (Order 6) approved confidential treatment of certain financial statements submitted by the oil company and its affiliates. The second order (Order 17) approved the transfer of a required certificate and the authority to operate the pipeline. The Superior Court dismissed Valdez’s appeals, concluding that Valdez lacked standing, failed to exhaust available administrative remedies, and the case was moot. The court also ordered Valdez to pay a portion of the attorney’s fees of the oil company and other companies involved in the proceedings.The Supreme Court of the State of Alaska reversed the dismissal of the appeal of Order 6, affirmed the dismissal of the appeal of Order 17, and vacated the award of attorney’s fees. The court found that Valdez had standing to appeal both orders, the appeals were not moot, and Valdez had exhausted administrative remedies with respect to Order 6 but not Order 17. The court remanded the case for further proceedings. View "City of Valdez v. Regulatory Commission of Alaska" on Justia Law

The case revolves around a lawsuit filed by Kyle Harris against Oasis Petroleum, Inc., and other parties, alleging negligence, gross negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress. Harris claimed that he was injured in an explosion on an oil rig operated by Oasis while he was working as an employee of Frontier Pressure Testing, LLC. The district court dismissed the other parties from the action, leaving Oasis as the sole defendant.The case proceeded to a jury trial, where the jury found Oasis, Frontier, and Harris each at fault for and a proximate cause of Harris’s injuries. The jury apportioned the fault as follows: Oasis 15%; Frontier 65%; Harris 20%. The jury found $5,012,500 in monetary damages would compensate Harris for his injuries. The district court entered an order for judgment, applying N.D.C.C. § 32-03.2-02, and deducted 85% of fault attributable to Frontier and Harris from the total damages.Harris filed a statement of costs and disbursements, arguing he should be awarded certain costs and disbursements because he was the prevailing party under the special verdict of the jury. Oasis objected to Harris’s statement of costs and disbursements, challenging the amount of expert fees and that the testimony did not lead to a successful result. The district court approved Harris’s amended statement of costs and disbursements, concluding that Harris was the prevailing party and was entitled to costs and disbursements undiminished by the percentage of negligence attributed to him.Oasis appealed to the Supreme Court of North Dakota, arguing that the district court erred as a matter of law in determining Harris was a prevailing party and abused its discretion in awarding Harris costs and disbursements. The Supreme Court affirmed the district court's decision, agreeing with Harris that he was the prevailing party. The court held that Harris was the prevailing party, and the court had the discretion to award Harris costs and disbursements under N.D.C.C. § 28-26-06, without reduction by his percentage of fault. View "Harris v. Oasis Petroleum" on Justia Law