Justia Energy, Oil & Gas Law Opinion Summaries

At issue in these forty appeals, consolidated into four for purposes of appeal, was whether the individual landowners were entitled to an award of attorney fees under Neb. Rev. Stat. 76-726.Just prior to TransCanada Keystone Pipeline, LP’s eminent domain proceedings seeking to acquire right-of-way and other property interests in constructing an oil pipeline, certain property owners - including some of the same landowners involved in these eminent domain proceedings - filed a constitutional challenge to the pipeline route. TransCanada then dismissed its condemnation petitions, except that the Holt County petitions were dismissed in order for TransCanada to pursue approval of a pipeline route by the Public Service Commission. The landowners filed motions for attorney fees and costs. In each case, the county court granted the requests for attorney fees. The Supreme Court disagreed, holding that none of the landowners established that they were entitled to attorney fees under the circumstances. View "TransCanada Keystone Pipeline, LP v. Nicholas Family Ltd. Partnership" on Justia Law

The Supreme Court denied the petition for a writ of mandamus filed by a group of landowners (“Landowners”) seeking an order compelling the Ohio Department of Natural Resources’ Division of Oil and Gas Resources Management (“the Division”) and its chief to commence appropriation proceedings to compensate Landowners for their land that was included in an oil and gas drilling unit. Landowners objected an an order issued by the chief requiring that a reservoir of oil and gas underlying multiple tracts of land be operated as a unit to recover the oil and gas, arguing that the order amounted to a taking of their property for which they must be compensated. The Supreme Court denied Landowners’ petition for a writ of mandamus, holding that Landowners had an adequate remedy by way of appeal to the county court of common pleas. View "State ex rel. Kerns v. Simmers" on Justia Law

This case involved an implied covenant to market gas. Energen owned and operated oil and gas wells in the San Juan Basin in northwestern New Mexico and southern Colorado. Its wells were subject to leases and other agreements (many of which were quite old) requiring it to pay a monthly royalty or overriding royalty on production to the Anderson Living Trust, the Pritchett Living Trust, the Neely-Robertson Revocable Family Trust (N-R Trust), and the Tatum Living Trust. Believing Energen was systematically underpaying royalties, the Trusts filed a putative class action complaint against it. The New Mexico Trusts claimed Energen was improperly deducting from their royalties their proportionate share of (1) the costs it incurs to place the gas produced from the wells in a marketable condition (postproduction costs) and (2) a privilege tax the State of New Mexico imposes on natural gas processors (the natural gas processors tax). They also alleged Energen had not timely paid royalties or interest thereon, as required by the New Mexico Oil and Gas Proceeds Payments Act. Both the New Mexico Trusts and the Tatum Trust further claimed Energen was wrongfully failing to pay royalty on the gas it used as fuel. The district judge dismissed the New Mexico Trusts’ marketable condition rule claim for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and entered summary judgment in favor of Energen on the remaining claims. All of the Trusts appealed those judgments. For the most part, the Tenth Circuit agreed with the district court. The Tenth Circuit’s analysis differed from that of the district court relating to: (1) the fuel gas claims made by the N-R Trust and Tatum Trust; and (2) the New Mexico Trusts’ claim under the New Mexico Oil and Gas Proceeds Payments Act. As to the former, the N-R Trust’s overriding royalty agreement required royalty to be paid on all gas produced, including that gas used as fuel. And the Tatum Trust’s leases explicitly prohibited Energen from deducting post-production costs (Energen treats its use of the fuel gas as an in-kind postproduction cost). Moreover, the “free use” clauses and royalty provisions in the Tatum Trust’s leases limited the free use of gas to that occurring on the leased premises. Because use of the fuel gas occurred off the leased premises, Energen owed royalty on that gas. With regard to the latter, the district court was right in permitting Energen to hold funds owed to the N-R Trust in a suspense account until a title issue concerning a well was resolved in favor of that Trust. However, the district court did not address whether the N-R Trust was entitled to statutory interest on those funds. It was so entitled, yet the current record (at least in the Tenth Circuit’s analysis) did not show interest to have been paid on the funds. View "Anderson Living Trust v. Energen Resources" on Justia Law

The 74-acre Washington County parcel, near the Ohio River, is subject to a 1980 oil and gas lease between the then-owners and Collins-McGregor, to permit “mining and operating for oil and gas and laying pipe lines, and building tanks, powers, stations, and structures thereon, to produce, save and take care of said products.” Collins-McGregor committed to make royalty payments based on the gas produced and to deliver a portion of the oil produced from the land to the lessors. The lease “shall remain in force for a term of One (1) years from [the effective] date, and as long thereafter as oil or gas, or either of them, is produced from said land by the lessee.” A well was drilled in 1981 and has produced oil and gas in paying quantities since then from the “Gordon Sand” formation. The Landowners contend that production of oil and gas has occurred near their property from below that formation but Collins-McGregor has not explored deep formations for lack of equipment or financial resources. They sought a judgment that the portion of the lease covering depths below the Gordon Sand has terminated because it has expired or been abandoned and that Collins-McGregor has breached implied covenants, including implied covenants of reasonable development and to explore further. The Supreme Court of Ohio affirmed dismissal. Ohio law does not recognize an implied covenant to explore further separate from the implied covenant of reasonable development. View "Alford v. Collins-McGregor Operating Co." on Justia Law

Petitioner Atlantic Richfield Company (“ARCO”) petitioned the Montana Supreme Court seeking reversal of five district court orders. Relevant here, the underlying action concerned a claim for restoration damages brought by property owners in and around the town of Opportunity, Montana. As part of ARCO’s cleanup responsibility relating to the Anaconda Smelter, EPA required ARCO to remediate residential yards within the Smelter Site harboring levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic in excess of ten parts per billion. The Property Owners, a group of ninety-eight landowners located within the bounds of the Smelter Site, sought the opinion of outside experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended the Property Owners remove the top two feet of soil from affected properties and install permeable walls to remove arsenic from the groundwater. Both remedies required restoration work in excess of what the EPA required of ARCO in its selected remedy. The Property Owners sued, seeking restoration damages. ARCO conceded that the Property Owners could move forward on their first four claims, but contended that the claim for restoration damages was preempted by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). The Supreme Court agreed with the district court that the Property Owners’ claims for restoration damages was barred by CERCLA. View "Atlantic Richfield v. 2nd Jud. Dist" on Justia Law

Hess Corporation ("Hess") appealed the grant of summary judgment which held Sundance Oil and Gas, LLC ("Sundance") held the superior leasehold mineral interest in a property located in Mountrail County. Sundance and Hess both moved for summary judgment, each arguing they had a superior claim to the mineral interests. The district court determined the trust action was res judicata and granted partial summary judgment in favor of Sundance, quieting title to the leasehold interest. Although the district court entered an order for partial summary judgment, the parties stipulated to the remaining issues related to revenues and expenses, and the district court later entered a final judgment. On appeal, Hess argued: (1) the district court erred in applying res judicata to determine Sundance was a good-faith purchaser for value; (2) the district court erred in granting summary judgment in Sundance's favor because genuine disputes of material fact existed; and (3) the district court erred by concluding Sundance could obtain a superior lease for the same property without providing Hess actual notice of the trust action proceedings. After review, the North Dakota Supreme Court determined the district court improperly applied res judicata and failed to consider the factual issues raised by Hess: a district court may not use the findings in an unlocatable mineral owner trust action as res judicata in a subsequent quiet title action to resolve all factual disputes regarding whether a later purchaser was a good-faith purchaser for value. The judgment was reversed and the matter remanded for further proceedings. View "Sundance Oil and Gas, LLC v. Hess Corporation" on Justia Law

The 1977 deed at issue in this case was ambiguous and of such doubtful meaning that reasonable minds disagreed as to the deed’s intent, and therefore, the circuit court erred in finding the deed was clear and in finding that the grantors did not convey one-half interest in oil and gas beneath a tract of land in Marshall County to the grantee.In 2013, Plaintiffs filed a complaint against Defendants asserting that, in the 1977 deed, Plaintiffs retained ownership of the one-half undivided interest in the oil and gas and, therefore, Defendants trespassed on their oil and gas interest and engaged in conversion. Plaintiffs then amended the complaint to request a declaratory judgment interpreting the 1977 deed. The circuit court determined that the deed was clear and unambiguous and declared that Plaintiffs kept for themselves the one-half interest in the oil and gas. The Supreme Court reversed, holding that the circuit court erred in finding that the 1977 deed was unambiguous and in granting a declaratory judgment in favor of Plaintiffs. View "Gastar Exploration Inc. v. Rine" on Justia Law

Joan Hallin, John Hallin and Susan Bradford (collectively Hallin and Bradford) appeal from a judgment in favor of Inland Oil & Gas Corporation. In 2007, Hallin and Bradford each leased to Inland mineral interests they owned in 160 acres of land in Mountrail County. The leases provided Hallin and Bradford leased to Inland "all that certain tract of land situated in Mountrail County." Hallin and Bradford, along with members of their extended family, owned a fraction of the minerals in the entire 160 acres. On the basis of irregularities in the chain of title, it was unclear whether Hallin and Bradford collectively owned sixty net mineral acres or eighty net mineral acres when the parties executed the leases. Hallin and Bradford believed they owned sixty net mineral acres and their relatives owned sixty acres. When Hallin and Bradford executed the leases, they also received payment drafts for a rental bonus showing they each leased thirty acres to Inland. The leases provide royalty compensation based upon the number of net mineral acres. The North Dakota Supreme Court decided Hallin and Bradford collectively owned eighty net mineral acres and their relatives owned forty net mineral acres. Inland and Hallin and Bradford disagreed whether the leases covered all of Hallin and Bradford's mineral interests. Hallin and Bradford sued Inland, arguing they leased sixty acres and the remaining twenty acres were not leased. Inland argued Hallin and Bradford leased eighty acres because the leases cover all of their mineral interests. The district court granted summary judgment to Inland, concluding the leases were unambiguous and that "as a matter of law, the Hallins and Bradford leased to Inland whatever interest they had in the subject property at the time the leases were executed." Finding no reversible error in that judgment, the North Dakota Supreme Court affirmed. View "Hallin v. Inland Oil & Gas Corporation" on Justia Law

This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law

A person dealing with a personal representative does not receive the protections of N.D.C.C. 30.1-18-14 unless the person obtains the personal representative's letters of appointment or any other court order giving the personal representative authority to act in this state. Dudley Stuber, trustee of the D.J. Stuber Land and Royalty Trust, and Rocky Svihl, trustee of the RGKH Mineral & Royalty Trust (collectively "Plaintiffs") appealed a judgment deciding ownership of certain mineral interests in favor of the estates of Victoria Davis and Helen Jaumotte. Plaintiffs moved for summary judgment, arguing there were no genuine issues of material fact and they were entitled to judgment as a matter of law. They claimed Jay Jaumotte, as personal representative of the estates, was authorized to sell property in North Dakota as a foreign personal representative, and Northland Royalty Corp. (to whom Jay Jaumotte first conveyed the interests) was a good-faith purchaser and was entitled to statutory protections under N.D.C.C. 30.1-18-14, and the statute of limitations had expired, precluding the heirs' claims. The heirs also moved for summary judgment. The heirs argued the deeds transferring the minerals to Northland were void because Jay Jaumotte lacked any authority to act on behalf of the Davis or Helen Jaumotte estates when dealing with North Dakota property, the Plaintiffs were not good-faith purchasers, and there were genuine issues of material fact about whether Northland was a good-faith purchaser. EOG Resources intervened and responded to the motions, arguing the Plaintiffs had no interest in the mineral estate, the Plaintiffs' predecessor-in-interest had notice of the heirs' potential interests in the property and failed to investigate, and the Plaintiffs and Northland were not good-faith purchasers. The North Dakota Supreme Court affirmed the district court's decision quieting title, but reversed its decision awarding damages to the Victoria Davis and Helen Jaumotte heirs. View "Stuber v. Engel" on Justia Law