Justia Energy, Oil & Gas Law Opinion Summaries

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

Sabal Trail brought a condemnation action to acquire permanent and temporary easements that would allow it to build and operate a portion of the pipeline on property owned by Sunderman Groves. The jury awarded Sunderman Groves $309,500 as compensation for the easements, and the district court entered a final judgment providing that as part of the compensation award, Sunderman Groves was entitled to recover its attorney's fees and costs in an amount to be set by the court.The Eleventh Circuit held that the district court did not abuse its discretion in allowing Sunderman Groves to testify about the value of the property and the court lacked jurisdiction to review whether Sunderman Groves was entitled to attorney's fees and costs. Accordingly, the court affirmed in part and dismissed in part. View "Sabal Trail Transmission, LLC v. 3.921 Acres of Land in Lake County Florida" on Justia Law

At issue was whether the rule of capture immunized an energy developer from liability in trespass, where the developer used hydraulic fracturing on the property it owned or leased, and such activities allowed it to obtain oil or gas that migrated from beneath the surface of another person’s land. Plaintiffs’ property was adjacent to a tract of land leased by Appellant Southwestern Energy Production Company for natural gas extraction. Plaintiffs alleged that Southwestern “has and continues to extract natural gas from under the land of the Plaintiffs,” and that such extraction was “willful[], unlawful[], outrageous[] and in complete conscious disregard of the rights and title of the Plaintiffs in said land and the natural gas thereunder.” Southwestern alleged that Plaintiffs’ claims were barred by, inter alia, the rule of capture, and sought declaratory relief confirming its immunity from liability. The court of common pleas court granted Southwestern’s motion for summary judgment, denied Plaintiffs’ motion for partial summary judgment, and denied the motion to compel as moot. The court agreed with Southwestern’s position that the rule of capture applied in the circumstances and, as such, Plaintiffs could not recover under theories of trespass or conversion even if some of the gas harvested by Southwestern had drained from under Plaintiffs’ property. The Superior Court reversed, holding that hydraulic fracturing could give rise to liability in trespass, particularly if subsurface fractures ... crossed boundary lines. The Pennsylvania Supreme Court rejected the concept that the rule of capture was inapplicable to drilling and hydraulic fracturing that occurred entirely within the developer’s property solely because drainage was the direct or indirect result of hydraulic fracturing. Nevertheless, the Supreme Court found the Superior Court panel’s opinion "to suffer from multiple infirmities," reversed and remanded with directions. View "Briggs, et al v. Southwestern Energy" on Justia Law

In this taxation dispute between the County of Maui and Appellees, which leased land on the island of Maui to operate their wind farms, the Supreme Court upheld the Tax Appeals Court's (TAC) final judgment in favor of Appellees, holding that the TAC properly held that the County exceeded its constitutional authority by amending Maui County Code 3.48.005 to expand its definition of "real property" to include "personal property."The County included the value of Appellees' wind turbine in their real property tax assessments and redefined the term "real property" within section 3.48.005 of the MCC to include wind turbines for that purpose. The TAC concluded that the County exceeded its authority under Haw. Const. art. VIII, 3 because the delegates to the 1978 Constitutional Convention did not intend to grant counties the power to redefine "real property." The Supreme Court affirmed, holding that the County exceeded its constitutional power when it amended MCC 6.48.005 to redefine "real property." View "In re Tax Appeal of Kaheawa Wind Power, LLC v. County of Maui" on Justia Law

A tax sale of real property described in the deed as pertaining to surface rights does not include oil and gas rights which are "restrictions of record" in a previously recorded oil and gas lease. The Court of Appeal held that defendant was the surface owner of the property at issue, but he did not own an interest in the oil and gas under the property. The court modified the judgment to show that upon termination of the oil and gas lease, any remaining oil and gas rights described in the 1939 Memorandum of Oil and Gas Lease revert to the surface owner. View "Leiper v. Gallegos" on Justia Law

Plaintiff/Appellant was the vested remainderman of his father's life estate in the surface rights of land in Canadian County, Oklahoma (the "Property"). Defendant Cimarex Energy Company was the lessee of the Property's mineral interests. Plaintiff filed suit alleging that he was entitled to compensation for the surface damages caused by the drilling of wells and entitled to be notified of negotiations to determine surface damages because he was a "surface owner" within the meaning of the Surface Damages Act (SDA), 52 O.S. sections 318.2 et seq. Defendant moved to dismiss for failure to state a claim arguing Plaintiff was not an owner within the meaning of the SDA, and even if he were an owner, his proper remedy was to seek compensation from the life tenant. The trial court sustained the Defendant's Motion to Dismiss finding the Remainderman was not a "surface owner" under the SDA. Plaintiff appealed. The Court of Civil Appeals reversed the trial court's ruling interpreting "surface owner" under the SDA to include vested remainder interests. The Oklahoma Supreme Court found the SDA's definition of surface owner was ambiguous, and was persuaded by the common meaning, expressed legislative intent, and interests of justice that the SDA's use of surface owner applies only to those holding a current possessory interest. Under the SDA, a mineral lessee must negotiate surface damages with those who hold a current possessory interest in the property. A vested remainderman did not hold a current possessory interest until the life estate has come to its natural end. The Court of Civil Appeals’ decision was vacated and the trial court affirmed. View "Hobson v. Cimarex Energy Co," on Justia Law

In 2011, Plaintiffs Rhonda Pennington, Steven Nelson, Donald Nelson, and Charlene Bjornson executed oil and gas leases for property in McKenzie County, North Dakota. Each lease term was three years with a lessee option to extend for an additional year. The leases were assigned to Continental Resources in September 2014, and it exercised an extension option. The leases included a provision that the leases would not terminate if drilling operations were delayed by an inability to obtain permits. In May 2012, Continental applied for a drilling permit on a 2,560-acre spacing unit that included the lands covered by the leases. The 2,560 acres included lands inhabited by the Dakota Skipper butterfly, which was listed as threatened under the Endangered Species Act. Continental could not begin drilling operations until receiving federal approval. In August 2015, the U.S. Fish and Wildlife Service issued a biological opinion relating to the impact of Continental’s proposed drilling on the Dakota Skipper. On October 1, 2015, Continental proposed measures to minimize the impact of its operations on the Dakota Skipper. On October 21, 2015, Continental recorded an affidavit of regulation and delay, stating it had not yet obtained federal regulatory approval to drill, and the primary term of the leases was extended under the “regulation and delay” paragraph of the leases. The following day, Continental applied to terminate the 2,560-acre spacing unit and create a 1,920-acre spacing unit to remove the Dakota Skipper habitat. In November 2015, the Industrial Commission approved the 1,920-acre spacing unit. In January 2016, the commission pooled all of the oil and gas interests in the 1,920-acre spacing unit for the development and operation of the spacing unit. Following the January 2016 order, Continental began drilling operations. In August 2017, the Plaintiffs sued Continental, alleging the leases expired on October 25, 2015, and Continental’s delay in obtaining regulatory approval to drill did not extend the leases. Plaintiffs appealed a district court ruling the “regulation and delay” provision in their oil and gas leases with Continental Resources extended the term of the leases. The North Dakota Supreme Court determined the district court concluded the delay in obtaining drilling permits for the 2,560-acre spacing unit was beyond Continental’s control and was not because of Continental’s fault or negligence. However, the court did not address whether Continental acted diligently and in good faith in pursuing a permit to drill the 2,560-acre spacing unit for more than three years. Viewing the evidence and inferences to be drawn from the evidence in a light favorable to the Plaintiffs, a genuine issue of material fact existed as to whether Continental acted diligently and in good faith. The Supreme Court therefore reversed the district court’s judgment and remanded for further proceedings on that issue. View "Pennington, et al. v. Continental Resources, Inc." on Justia Law

In this quiet title action involving the mineral interests in two tracts of real estate, the Supreme Court affirmed the judgment of the district court finding that the grantees' successors in interest obtained ownership of minerals when twenty years expired without production on the property, holding that the common-law rule against perpetuities (the rule) should not be applicable to the circumstances of this case.The tracts at issue were conveyed by deeds in which the grantor excepted the mineral interests for a "period of 20 years or as long thereafter" as minerals may be produced. The grantor's successors in interest claimed full ownership of the mineral interest in both tracts, arguing that the future ownership of the minerals when the grantor's excepted term interest ended violated the rule, thereby voiding those conveyances ab initial and preventing them from devolving to the grantees' successors in interest. The district court concluded that the grantees' heirs obtained ownership of the minerals when twenty years expired without production on the property. The Supreme Court affirmed on different grounds, holding that the rule did not apply under these circumstances. View "Jason Oil Co. v. Littler" on Justia Law

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 (“the State”) appealed a district court’s interpretation of royalty provisions of natural gas leases with Newfield Exploration Company, Newfield Production Company, and Newfield RMI LLC (“Newfield”). The State argued the district court’s interpretation of the leases improperly allowed the reduction of the royalty payments to account for expenses incurred to make the natural gas marketable. The North Dakota Supreme Court concluded the gross proceeds from which the royalty payments under the leases were calculated could not be reduced by an amount that either directly or indirectly accounted for post-production costs incurred to make the gas marketable. Therefore, the Court reversed the district court’s judgment. View "Newfield Exploration Company, et al. v. North Dakota, et al." on Justia Law

The Supreme Court affirmed the order of the circuit court granting Plaintiffs' motion for class certification in this action alleging that Defendant, which leased with Plaintiffs to drill and sell hydrocarbons from the leased property, improperly suspended royalty payments, holding that the requirements of numerosity and superiority were met.The complaint alleged that the royalty payments were suspended in an effort by Defendant to recoup improper deductions. Plaintiffs moved for class certification, which the trial court granted. Defendant appealed, arguing that Plaintiffs failed to satisfy the numerosity and superiority requirements. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in determining that the numerosity and superiority requirements were satisfied in this case. View "Stephens Production Co. v. Mainer" on Justia Law