Justia Energy, Oil & Gas Law Opinion Summaries

The State of North Dakota, ex rel. the North Dakota Board of University and School Lands, and the Office of the Commissioner of University and School Lands, a/k/a the North Dakota Department of Trust Lands appealed a judgment dismissing its claim against Newfield Exploration Company relating to the underpayment of gas royalties. The North Dakota Supreme Court found that the district court concluded the State did not establish a legal obligation owed by Newfield. However, the State pled N.D.C.C. § 47-16-39.1 in its counterclaim, which the court recognized at trial. Because the State satisfied both the pleading and the proof requirements of N.D.C.C. § 47-16-39.1, the Supreme Court held the district court erred in concluding the State did not prove Newfield owed it a legal obligation to pay additional royalties. Rather, as the well operator, Newfield owed the State an obligation under N.D.C.C. § 47-16-39.1 to pay royalties according to the State’s leases. The court failed to recognize Newfield’s legal obligations as a well operator under N.D.C.C. § 47-16-39.1. The Supreme Court concluded the district court erred in dismissing the State's counterclaim; therefore, judgment was reversed and the matter remanded for findings related to the State's damages and Newfield's affirmative defenses. View "Newfield Exploration Company, et al. v. North Dakota, et al." on Justia Law

Energy Transfer LP and Dakota Access LLC (collectively, “Energy Transfer”) appealed an order and judgment affirming the North Dakota Private Investigative and Security Board’s (“Board”) order denying Energy Transfer’s petition to intervene in an administrative action against TigerSwan, LLC. Energy Transfer argued the district court erred by concluding it lacked standing to appeal the Board’s decision denying its petition to intervene, and that the Board erred in denying its petition to intervene. TigerSwan contracted with Energy Transfer to provide services related to the Dakota Access Pipeline. The Board commenced administrative proceedings against TigerSwan alleging it provided investigative and security services in North Dakota without a license. TigerSwan was compelled to disclose documents to the Board, some of which were the focus of this appeal. Energy Transfer filed a motion to intervene for the purpose of compelling the return of the documents and to obtain a protective order. After review, the North Dakota Supreme Court reversed the court order concluding Energy Transfer lacked standing to appeal the Board’s order, and reversed the Board’s order denying intervention. The matter was remanded to the Board for further proceedings. View "Energy Transfer, et al. v. ND Private Investigative and Security Bd., et al." on Justia Law

Energy Transfer LP and Dakota Access LLC (collectively, “Energy Transfer”) appealed an order for partial summary judgment certified as final by a district court. The court held documents the North Dakota Private Investigative and Security Board received in response to discovery requests in an administrative proceeding against TigerSwan, LLC fell within the N.D.C.C. ch. 44-04 and 54-46 provisions dealing with government records. TigerSwan contracted with Energy Transfer to provide services related to the Dakota Access Pipeline. The Board commenced administrative proceedings against TigerSwan alleging it provided investigative and security services in North Dakota without a license. TigerSwan was compelled to disclose documents to the Board, some of which were the focus of this appeal. Energy Transfer filed a motion to intervene in the administrative proceedings claiming roughly 16,000 documents TigerSwan disclosed were confidential. Energy Transfer sought to intervene for the purpose of compelling the return of the documents and to obtain a protective order. After review, the North Dakota Supreme Court concluded the court did not abuse its discretion in certifying the partial summary judgment as final under N.D.R.Civ.P. 54(b), and it did not err in granting partial summary judgment. View "Energy Transfer, et al. v. ND Private Investigative and Security Bd., et al." on Justia Law

Phillip Armstrong appealed a judgment dismissing his amended complaint. The district court granted dismissal of the amended complaint after finding Armstrong had failed to exhaust his administrative remedies. In 1996, Armstrong filed a surety bond with the North Dakota Industrial Commission when he became the operator of several oil wells on private land. In 2001, Armstrong also began operating wells on federal lands. Armstrong was engaged with federal authorities in formulating a reclamation plan for the federal lands. The wells were not producing oil, and Armstrong requested a release of his surety bond filed with the Commission. The Commission conditioned the release of the bond on Armstrong performing a geoprobe assessment of the wells, which Armstrong refused. Armstrong thereafter filed a complaint in the district court seeking release of his bond. The court ultimately concluded Armstrong's claims were barred by his failure to exhaust his administrative remedies, rejected Armstrong’s argument state law did not apply because of federal preemption, and entered a judgment dismissing the action. The North Dakota Supreme Court concluded federal regulations did not preempt the application of N.D.C.C. ch. 38-08, Armstrong failed to exhaust his administrative remedies, and the court properly dismissed the action. View "Armstrong v. Helms" on Justia Law

Enerplus Resources (USA) Corporation (“Enerplus”) appealed an amended judgment and adverse summary judgment orders which held it liable for suspending royalty payments to Meyer Family Mineral Trust, Joann Deryce Struthers Trust, and Steven J. Reed Living Trust (collectively, “Trust Defendants”). Victor Christensen owned land in Dunn County, North Dakota, including an area referred to as the “W1/2.” In 1952, he deeded a 5/128 royalty interest1 to Henry Roquette for all of the oil and gas produced from the W1/2 (“Roquette Deed”). Thereafter, Victor Christensen transferred his remaining interest in the W1/2 to his wife, Mildred Christensen. In 1957, Mildred Christensen deeded the W1/2 to Joe Reed and Deryce Reed, reserving a 4/5 mineral interest, and thereby conveying a 1/5 mineral interest to the Reeds. In 1968, Henry Roquette conveyed the 5/128 royalty interest to Mildred Christensen. The Vic Christensen Mineral Trust (“VCMT”) now owns the 4/5 mineral interest in the W1/2 that was formerly owned by Mildred Christensen. The Trust Defendants collectively owned the 1/5 mineral interest previously conveyed to the Reeds. Enerplus operated wells within the W1/2. A title examiner found a discrepancy with the land acreage in the Roquette Deed, which affected the size of the royalty interest. In October 2017, Enerplus informed VCMT and the Trust Defendants of these issues, required they enter into a stipulation clarifying their ownership interests, and suspended royalty payments to VCMT and the Trust Defendants. In 2019, VCMT sued the Trust Defendants to quiet title, alleging it owned the royalty interest on the Trust Defendants’ 1/5 mineral interest in the W1/2, and the royalty interest was larger than 5/128 based on the Roquette Deed. The Trust Defendants counterclaimed, alleging their 1/5 mineral interest had no royalty burden. VCMT and the Trust Defendants then stipulated to their interests with VCMT agreeing to forgo any rights to the royalty interest. Enerplus then paid VCMT and the Trust Defendants their suspended royalty payments. The Trust Defendants sought statutory interest from Enerplus for suspending their royalty payments. After cross-motions, the district court granted summary judgment in favor of the Trust Defendants and against Enerplus. Enerplus argued it was justified in suspending payments under N.D.C.C. 47-16-39.1, which allowed for suspending payments in the event of a dispute of title. To this, the North Dakota Supreme Court agreed and revered the district court's orders. View "Vic Christensen Mineral Trust v. Enerplus Resources Corp., et al." on Justia Law

Phillip Armstrong appealed a judgment adjudicating ownership of interests in an oil and gas lease and the parties’ claims to revenue proceeds from production on those interests. Continental Resources operated wells located on lands covered by the lease. When Continental learned of competing claims to the leasehold interests in question, it began holding production royalties in suspense and recouping amounts it had paid on the wells. Continental sued Armstrong alleging it had overpaid him. Continental later amended its complaint to add the other defendants and request interpleader relief. Continental requested the district court determine ownership of the interests and the amount of revenue proceeds to which each defendant was entitled on production from wells the parties referred to as the Hartman Wells. The defendants filed various crossclaims and counterclaims. The North Dakota Supreme Court affirmed the judgment to the extent it determined ownership of the disputed interests and dismissed Armstrong’s claims against Continental Resources. The Court reversed and vacated the judgment to the extent it ordered Armstrong to pay Citation 2002 Investment Limited Partnership restitution for unjust enrichment. View "Continental Resources v. Armstrong, et al." on Justia Law

Daniel and Debra Bearce appealed the district court’s grant of summary judgment in favor of Yellowstone Energy Development, LLC. In June 2006, representatives of a business entity that would eventually become Yellowstone went to the home of Daniel and Debra Bearce seeking to purchase 170 acres of land owned by the Bearces. Yellowstone successfully secured an exclusive option to purchase the land. In 2008, Yellowstone exercised its option to purchase the land, and the parties entered into a contract for deed. In 2009, Yellowstone and the Bearces modified the contract for deed to alter some of the payment terms. Both the original contract for deed and the 2009 modified contract for deed included the following term providing for the payment of a portion of the purchase price with “shares” of a contemplated ethanol plant. Yellowstone subsequently abandoned its plan to build an ethanol plant on the Bearces’ land. Yellowstone then negotiated a long-term lease with a third party to build an oil train loading facility on the Bearces’ land. In July 2010, Yellowstone sent a letter to the Bearces advising them $100,000 in “value” would be issued despite Yellowstone’s abandonment of the plan to build an ethanol plant. In December 2011, the Yellowstone Board of Directors approved a multiplier of three units per $1 invested for individuals who had provided initial cash investment in Yellowstone. The Bearces’ interest in Yellowstone was not given the 3:1 multiplier. Units representing ownership interest in Yellowstone were allocated and placed on a ledger sometime after December 4, 2012. After receiving a “unit ledger” indicating their interest in Yellowstone would not receive the 3:1 multiplier, the Bearces objected. Despite the objection, Yellowstone refused to apply the 3:1 multiplier to the Bearces’ interest in Yellowstone. The Bearces sued Yellowstone, asserting claims for breach of fiduciary duty, fraudulent inducement, and breach of contract. On appeal, the Bearces argued the district court erred in concluding Yellowstone did not owe them a fiduciary duty and that, if a duty was owed, the Yellowstone Board of Directors did not breach its fiduciary duty. Finding no reversible error, the North Dakota Supreme Court affirmed the district court. View "Bearce v. Yellowstone Energy Development" on Justia Law

Plaintiffs Rhonda Pennington, Steven Nelson, Donald Nelson, and Charlene Bjornson appealed a judgment entered after the district court determined their oil and gas leases with Continental Resources had not expired and remained in effect. The Plaintiffs argued the district court erred in concluding the leases had not expired. The North Dakota Supreme Court affirmed, concluding the issues the Plaintiffs raised on appeal were precluded under the law of the case doctrine and mandate rule. View "Pennington, et al. v. Continental Resources" on Justia Law

Tesoro Great Plains Gathering & Marketing, LLC, formerly known as Great Northern Gathering & Marketing, LLC (“Great Northern”), appealed an amended judgment entered after the district court ordered a pipeline lien held by Mountain Peak Builders, LLC foreclosed, and awarded Mountain Peak attorney fees and costs. Because the North Dakota Supreme Court determined the lien was extinguished, the district court erred as a matter of law by ordering the lien foreclosed and by awarding Mountain Peak attorney fees and costs. View "Tesoro Great Plains Gathering & Marketing v. Mountain Peak Builders" on Justia Law

The Plaintiffs (“Blasi”) sued the Defendants (“Bruin”) in five separate cases in federal district court alleging Bruin underpaid royalties due under the terms of various oil and gas leases. Blasi accepted the royalties in cash rather than in kind. Blasi claimed the royalty was to be paid “free of costs” and asserted Bruin improperly deducted “various costs such as gathering or moving the oil and other costs” from the marketable price of the oil. The United States District Court for the District of North Dakota certified a question related to the interpretation of the lease: “Whether the instant oil royalty provision is interpreted to mean the royalty is based on the value of the oil ‘at the well.’” Blasi filed a motion requesting that the North Dakota Supreme Court decline to answer the question. The Supreme Court exercised its discretionary authority to answer the certified question, concluding that as a matter of law, that the royalty provision in this case established a valuation point that was at the well. View "Blasi, et al. v. Bruin E&P Partners, et al." on Justia Law