Justia Energy, Oil & Gas Law Opinion Summaries

The issue before the Supreme Court in this case called for a determination of whether section 15-11-1106(2) C.R.S. (2013) required a court to reform a revocable option that was negotiated as part of a commercial contract entered into before the effective date of the statutory Rule Against Perpetuities Act. In Colorado, the Act superseded the common law rule for nonvested property interests created after May 31, 1991. The common rule still applied to nonvested property interests created prior to that date. Under the Act, all donative transfers after that date were valid so long as the property interest created vested or terminated within ninety years of its creation. With regard to the specifics of this case, the trial court concluded that the revocable option at issue violated the common law rule against perpetuities. The Court then inserted a savings clause pursuant to statute, to prevent the option from being voided by the common law rule, and ruled that the option holder was entitled to specific performance of the reformed option. The court of appeals affirmed. The Supreme Court concluded, however, that the option did not violate the common law rule, and therefore no reformation by the trial court was necessary. View "Atlantic Richfield Co. v. Whiting Oil and Gas Corp." on Justia Law

Patrick Wagner appealed the grant of summary judgment that held as a matter of law that his property was burdened by either an express or an implied roadway easement, and that dismissed his claims for injunctive relief and damages against Crossland Construction Company, Inc., Baker Hughes Oilfield Operations, Inc., M & K Hotshot & Trucking, Inc., and Titan Specialties, Ltd. Upon review of the matter, the Supreme Court concluded that, as a matter of law, the language in the warranty deed at issue in this case did not create or reserve an express easement. Furthermore, the Court concluded genuine issues of material fact precluded the district court from resolving whether an implied easement exists. Accordingly, the Court reversed and remanded the case for further proceedings.View "Wagner v. Crossland Construction Company, Inc." on Justia Law

Earl and Harold Van Sickle appealed, and Hallmark & Associates, Inc., Frank Celeste, William R. Austin, Phoenix Energy, Bobby Lankford, and Earskine Williams, and Missouri Breaks, LLC, cross-appealed an amended judgment that held Missouri Breaks liable to the Van Sickles for unpaid pre-bankruptcy confirmation royalties and awarding the Van Sickles interest and attorney's fees. Upon careful consideration of the trial court record, the Supreme Court concluded the court did not err in holding Missouri Breaks liable under state law for pre-bankruptcy confirmation royalties owed to the Van Sickles. Furthermore, the Court concluded the district court did not abuse its discretion in awarding the Van Sickles attorney's fees and did not err in awarding them simple interest under the statute. View "Van Sickle v. Hallmark & Assoc., Inc." on Justia Law

Defendant-Appellant Enerlex, Inc. offered to purchase plaintiffs'-appellees' mineral interest. At the time, plaintiffs did not know that their Seminole County mineral interests were included in a pooling order or that proceeds had accrued under the pooling order. Defendant admitted it knew about the pooling order and the accrued proceeds but did not disclose these facts in making the purchase offer. Plaintiffs signed the mineral deeds which defendant provided and subsequently discovered the pooling order, the production, and the accrued proceeds. Plaintiffs sued for rescission and damages, alleging misrepresentation, deceit and fraud. The district court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed the summary judgment. After its review, the Supreme Court concluded defendant obtained the mineral deeds from plaintiffs by false representation and suppression of the whole truth. Defendant was therefore liable to plaintiffs for constructive fraud. Rescission was the appropriate remedy for defendant's misrepresentation and constructive fraud. Therefore, the Court reversed the appellate court and reinstated the district court's judgment. View "Widner v. Enerlex, Inc." on Justia Law

Greggory Tank appealed a judgment quieting title to certain McKenzie County oil, gas and mineral interests in Debbora Rolla, the personal representative of the estate of George Tank. Because the district court did not err in ruling the challenged quitclaim deeds reserved mineral interests in George Tank and reserved in him a life estate in the surface only, the Supreme Court affirmed.View "Rolla v. Tank" on Justia Law

Thoroughbred Associates drilled a gas well (Well) in Comanche County. Thoroughbred subsequently acquired leases of land near the Well and created a unit called the Thoroughbred-Rietzke Unit (Rietzke Unit). Defendants became successors-in-interest to a lease (OXY Lease) Thoroughbred entered into for oil and gas underlying a tract near the Well. The parties disagreed, however, about whether the Well was draining the Rietzke Unit. Thoroughbred stopped submitting royalty payments to Defendants accruing from the Rietzke Unit. Thoroughbred subsequently filed a complaint for a declaratory judgment that it had been mistaken when it included the OXY Lease in the Rietzke Unit. Defendants counterclaimed. The district court concluded (1) Defendants failed to prove that any drainage of the leased lands occurred; and (2) the Lease was properly included in the Rietzke Unit. The Supreme Court affirmed in part and reversed in part, holding (1) Defendants failed to prove their drainage claim; and (2) the court of appeals erroneously granted summary judgment to Defendants on their claim that the Lease should be included in the Rietzke Unit.View "Thoroughbred Assocs., LLC v. Kansas City Royalty Co., LLC " on Justia Law

Plaintiffs owned an undivided five-sixths interest of land on which they executed an oil and gas lease to Prestige Exploration, Inc. Plaintiffs ownership interests were managed by Regions Bank who helped negotiate the terms of the lease. Prestige acquired the lease on behalf of Defendant Matador Resources Company. The issue before the Supreme Court centered on the extension of that lease. Plaintiffs sought to rescind or reform the extension agreement to make it applicable only to a portion of their property. After several preliminary partial summary judgment rulings, a jury found in favor of Defendant for the extension to cover the entirety of Plaintiffs' land interest. The appellate court affirmed in part, reversed in part, and reformed the lease to extend only to the portion of land for which Plaintiffs asked. Upon review, the Supreme Court found that Plaintiffs were precluded from rescinding the agreement on "excusable error." Further, the Court found no manifest error in the district court proceedings. The Court reversed the appellate court's judgment and reinstated the trial court's judgment in its entirety.View "Peironnet v. Matador Resources Co." on Justia Law

The Hernandezes (Hernandez) entered into a real-estate contract to buy 100 acres of land in Van Buren County from the Humphries (Humphries). The sales contract included the mineral rights to the property. However, Humphries subsequently leased the oil-and-gas rights to New Century, which assigned the rights to SEECO. Humphries then sold the oil-and-gas rights to Paraclifta and Claughton. Therafter, Hernandez entered into a contract for sale of the property to the Walls (Walls). Hernandez and Walls (Appellants) filed suit against New Century, SEECO, Paraclifta, and Claughton (Appellees), alleging that Appellees were not innocent purchasers the oil-and-gas rights and seeking cancellation of the lease issued to New Century and the assignment to SEECO, as well as the deed conveying the rights to Paraclifta and Claughton. The circuit court granted Appellees' motions for summary judgment and Appellees' requested attorney fees. The Supreme Court reversed and remanded, holding (1) a question of fact remanded as to whether Hernandez was in exclusive possession of the property, thus imputing notice of Hernandez's interest in the property; and (2) the circuit court abused its discretion in awarding attorneys' fees.View "Walls v. Humphries" on Justia Law

EOG Resources, Inc. appealed a district court judgment that granted Lario Oil & Gas Co.'s motion for summary judgment and quieted title of an oil and gas leasehold estate in Lario's favor. Upon review of the matter, the Supreme Court reversed and remanded, concluding the district court erred by deciding EOG did not lease the rights to the oil and gas interests. View "Lario Oil & Gas Co. v. EOG Resources, Inc." on Justia Law

In 1907, Florence conveyed her 1/7 interest in "the surface only" of a 225-acre tract of land to Walter, her brother, who was vested with an undivided 6/7 interest in the tract. The subject tract was subsequently conveyed several times. In 1967, Respondent purchased the interest in the 225-acre tract that was previously owned by Walter. Respondent asserted that he was the sole owner of all oil and gas rights under the tract. Petitioners, successors to Florence, contended that they owned a portion of the 1/7 interest in the oil and gas under the tract. The circuit court ruled in favor of Respondent after declaring that the term "surface only" was ambiguous and relying on contemporary testimony to interpret the deed. The Supreme Court reversed, holding (1) the term "surface," when used as a term of conveyance, is not presumptively ambiguous and does have a definite and certain meaning; (2) the deed clearly conveyed from Florence to Walter her share of "the surface only" to the tract and reserved to Florence the remainder of the tract, including the oil and gas underlying the tract; and (3) accordingly, Petitioners were owners of a portion of Florence's 1/7 interest in the minerals underlying the tract.View "Faith United Methodist Church & Cemetery of Terra Alta v. Morgan " on Justia Law