Justia Energy, Oil & Gas Law Opinion Summaries

The successors to the interests of eight siblings of John Q. Nichols ("Goughnour defendants") appealed the grant of summary judgment in a quiet title action by the successors to the interests of John Q. Nichols ("Nichols plaintiffs") to determine ownership of 1/2 of the mineral interests in a parcel of land in Mountrail County. The Goughnour defendants claimed they collectively owned 1/4 of the mineral interests in the land and the Nichols plaintiffs owned 1/4 of the mineral interests. The district court decided the Goughnour defendants collectively owned 1/9 of the mineral interests in the land and the Nichols plaintiffs owned 7/18 of the mineral interests. After review of the district court record, the Supreme Court affirmed. View "Nichols v. Goughnor" on Justia Law

The property at the center of this dispute was located in San Juan County with productive oil and gas wells thereon. While ownership of the land was the ultimate question the parties sought to resolve in the underlying lawsuit, the issue on appeal was narrower: whether, as a matter of law, a joint tenancy in realty may be terminated and converted into a tenancy in common by a mutual course of conduct between the owners that demonstrates their intent to hold the property as tenants in common. Upon review of the matter, the Supreme Court held that such a course of conduct may effectively terminate a joint tenancy. Accordingly, the Court reversed the Court of Appeals and remanded the case to the district court for further proceedings. View "Edwin Smith, LLC v. Synergy Operating, LLC" on Justia Law

Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG's wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan's successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party's sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed suit asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. Upon review, the Supreme Court affirmed. The Court found no breach of contract in the successor's removal of the pipelines connecting BOG to the gas gathering system and that the Gas Purchase Contract was properly terminated for economic cause. Furthermore, the Court found no clear error in the district court's rejection of BOG's claim for breach of the implied covenant and fair dealing. View "Bowers Oil & Gas, Inc. v. DCP Douglas, LLC" on Justia Law

Plaintiffs, successors in title to land located in Arkansas, brought a declaratory judgment action in Arkansas state court against AgriBank, FCB, seeking to quiet title to oil and gas rights that AgriBank held in Plaintiffs' land. AgriBank removed the case to federal district court. The district court granted AgriBank's motion to dismiss, identifying two bases on which to do so: (1) that a regulation promulgated by the Farm Credit Administration (FCA) specifically approved the sort of ownership interests held by AgriBank that Plaintiffs now attacked; and (2) that the challenge to AgriBank's oil and gas rights was based on a repealed act of Congress. The Eighth Circuit Court of Appeals affirmed, holding that the district court correctly dismissed the case under its first rationale, as the reservations at issue enjoyed the FCA's approval. View "Nixon v. AgriBank, FCB" on Justia Law

Orton filed a Chapter 7 petition. On Schedule A (realty), he listed his one-eighth interest in vacant land that is subject to an oil and gas lease, stating fair market value as $34,000 and claiming an exemption for $4,250 (1/8). On Schedule B (personal property), Orton listed his one-fourth interest in royalty interest in the oil and gas lease, assigning a fair market value of $1; no well has been drilled. On Schedule C (claimed exemptions), Orton claimed wildcard exemptions, 11 U.S.C. 522(d)(5), for $4,250 and $1. No party objected. The Trustee moved to close the case and to except Orton’s royalty interest from abandonment, preserving ability to recover any future royalties for the estate. Orton objected, claiming that he had successfully, permanently removed the assets from the estate, securing for himself future appreciation, free from creditors’ claims. The Bankruptcy Court held that the Trustee was entitled to pursue any future increase in value above the amount stated in Schedule C. The district court and Third Circuit affirmed. The Trustee, not the Debtor, is entitled to post-petition appreciation in value of estate assets that surpasses the amount exempted. Orton had exempted only an interest, not the asset itself, and was entitled to only the amount listed in Schedule C, not to future appreciation. View "In Re:Orton" on Justia Law

In August of 2009, Samson Resources Company owned oil and gas leases covering 87.78 mineral acres in Roger Mills County, Oklahoma, including the Schaefer Lease. The Schaefer Lease covered 70 net acres in the Southwest Quarter of Section 28 and had a three-year primary term that ended on November 22, 2007. If drilling operations were commenced by the end of the primary term, the lease would continue so long as such operations continued. On August 2, 2007, Newfield sent a letter to Samson, proposing to drill a well in Section 28. The estimated cost of the well was over $8.5 million dollars. On August 9, 2007, Newfield filed an application with the Commission, seeking to force pool the interests of Samson and other owners in Section 28. Newfield sent an e-mail dated April 14, 2008, to Samson that informed Samson that Newfield had commenced operations prior to the expiration of the Schaefer Lease. Newfield's e-mail stated that Samson had underpaid well costs and that an election to participate with 87.78 acres would require prepayment of $1,411,982.45. Samson responded by e-mail on the same date, informing Newfield its intent was only to elect its 17.78 acres. On April 28, 2008, Samson filed an Application seeking to have its election to participate in the well limited to 17.78 acres rather than 87.78 acres. After an administrative hearing, the Administrative Law Judge determined that Samson's timely election to participate only covered 17.78 acres of its interest and that Samson accepted the cash bonus as to its remaining 70 acres. The Oil and Gas Appellate Referee reversed the ALJ's determination, finding that the ALJ improperly relied on actions which occurred prior to the issuance of the pooling order. The Commission issued Order No. 567706, which adopted the Referee's report, reversed the ALJ, and declared that Samson had elected to participate to the full extent of its 87.78 acre interest in the unit. The Commission found Samson made a "unilateral mistake" when it elected to participate to the full extent of its interest. Samson appealed the Commission's order to the Court of Civil Appeals, which affirmed. Before COCA issued its opinion affirming the Commission, Samson filed an action in the district court alleging actual fraud, deceit, intentional and negligent misrepresentation, constructive fraud, and breach of duty as operator. Samson also alleged Newfield's actions amounted to extrinsic fraud on the Commission, rendering Pooling Order No. 550310 invalid as to Samson's working interest attributable to the 70-acre Schaefer Lease. The trial court granted Newfield's motion to dismiss for lack of subject matter jurisdiction, finding the petition to be an impermissible collateral attack on a valid Commission order. The Court of Civil Appeals affirmed. After its review, the Supreme Court found that Samson's actions for damages sounding in tort were beyond the Commission's jurisdiction, and the district court in this case was the proper tribunal for Samson to bring its claims. The trial court's order granting Newfield's Motion to Dismiss was reversed, and the case was remanded for further proceedings. View "Samson Resources Co. v. Newfield Exploration Mid-Continent, Inc." on Justia Law

This case arose when plaintiff alleged that defendant owed it mineral royalty payments pursuant to an area-of-interest provision contained in a 1979 agreement. The court certified two questions to the Nevada Supreme Court: (1) Under Nevada law, does the Rule Against Perpetuities apply to an area-of-interest provision in a commercial agreement? and (2) If the Rule Against Perpetuities did apply, is reformation available under Nevada Revised Statute 111.1039(2)? All further proceedings in the case were stayed pending receipt of the answer from the Nevada Supreme Court. View "Bullion Monarch Mining, Inc. v. Barrick Goldstrike Mines, Inc." on Justia Law

The issue before the Supreme Court was whether section 38-5-105 C.R.S. (2011) granted condemnation authority to a company for the construction of a petroleum pipeline. Upon review, the Court concluded that the General Assembly did not grant expressly or implication, the power of eminent domain to companies for the construction of pipelines conveying petroleum. Therefore, section 38-5-105 did not grant that authority to Respondent Sinclair Transportation Company for its proposed pipeline project. The Court reversed the court of appeals' opinion that upheld the trial court's order granting Sinclair immediate possession of the property belonging to Petitioners Ivar and Donna Larson and Lauren and Kay Sandberg. View "Larson v. Sinclair Transp. Co." on Justia Law

Respondents-Appellants Darlene Hankison, Michael Flick, Steven Flick, David Flick, landowners in Wells County, and Weckerly F.L.P., a landowner in Sheridan County, appealed a Wells County district court judgment and a Sheridan County district court order that denied their motions to dismiss and granted Minnkota Power Cooperative, Inc.'s petitions to enter their property to conduct testing and surveys. The Wells County district court held that for purposes of a petition to enter land for surveying and testing, Minnkota only needed to show it was in charge of a public use or it was in the category of persons entitled to seek eminent domain. The court determined Minnkota was in charge of a public use and also was entitled to seek eminent domain. The Sheridan County court held, under N.D.C.C. § 10-15-52, a foreign cooperative is entitled to all rights, exemptions, and privileges of a cooperative organized for the same purposes under the laws of this state when it is issued a certificate of authority from the secretary of state. Minnkota was issued a certificate of authority from the secretary of state, and it is organized to provide power to its members. Because North Dakota electric cooperatives have authority to use eminent domain, the court determined Minnkota also has the power to use eminent domain. Upon review, the Supreme Court concluded the district courts did not err in concluding that Minnkota was entitled to seek the power of eminent domain under North Dakota law. View "Minnkota Power Cooperative, Inc. v. Anderson" on Justia Law

This case involved the property rights to coal bed methane gas (CBM) produced from certain lands located in Sebastian County, Arkansas. The original holder of fee simple absolute title to the lands (Grantor) conveyed surface and coal rights in 1965 via an instrument the parties referred to as the Garland Deed. Coal Owner acquired those rights effective April 30, 2010. However, three years before the grant of the coal rights, in 1962, Grantor had conveyed an undivided one-half interest in all oil, gas, and other mineral rights except coal via an instrument known as the Wheeler Deed. In 1976, Grantor conveyed its second undivided one-half interest via an instrument known as the Texas & Pacific Deed. Gas Owners were the successors-in-interest to the rights Grantor conveyed in the Wheeler and Texas & Pacific Deeds. EnerVest entered into various oil and gas leases and contracts with Coal Owner and Gas Owners to produce CBM from the lands and initiated this interpleader action seeking a ruling as to whether Coal Owner or Gas Owners were entitled to the CBM royalties. The parties moved for summary judgment on a stipulated record that included the Wheeler, Garland, and Texas & Pacific Deeds. The court affirmed the district court's holding that Gas Owners were entitled to the CBM royalties where the plain language of the deeds broadly conveyed to Gas Owners all rights to oil, gas, and other mineral resources. View "EnerVest Operating, LLC, et al. v. Sebastian Mining, LLC" on Justia Law