Justia Energy, Oil & Gas Law Opinion Summaries

The central issue in this case was whether an oil company could deduct reasonable processing and investment costs from the payments it made to royalty owners. If so, the Supreme Court had to determine whether Mississippi code 53-3-39 was applicable in calculating the damages owed to the royalty owners for unreasonable deductions. Upon review, the Supreme Court affirmed the chancellor's holding that reasonable processing and investment costs could be deducted from royalty owners' payments. However, the Court determined that the chancellor erred by failing to apply 53-3-39 to calculate damages. Thus, the Court partly affirmed, partly reversed the chancellor's decision, and remanded the case for recalculation of damages. View "Pursue Energy Corporation v. Abernathy" on Justia Law

Plaintiff owns 2,485 acres containing Indiana's only antebellum plantation and 2,000 acres of "classified forest," with endangered species habitats. A utility company has a lease for storing and extracting oil and natural gas on portions of the property. The Lease continues so long as "oil or gas is produced in paying quantities" or "the Property continues to be used for the underground storage of gas" and will terminate upon the utility's surrender or failure to make payments. The lease contains provisions to protect historic sites and to calculate damage to trees, requires notice of utility activity, and requires that the utility's use be "as minimally necessary." Plaintiff sought damages and to terminate the lease and evict the utility. The district court entered judgment for the utility, finding that a disagreement about the use of land was not an express reason for termination and that the lease specifically provided that damages were the proper remedy. Plaintiff dismissed the damages claim with prejudice to appeal the ejectment claim. The Seventh Circuit affirmed. Plaintiff did not show that damages are inadequate to compensate for the harm to its property. View "Cedar Farm, Harrison County, Inc. v. Louisville Gas & Elec. Co" on Justia Law

The Forest Service manages the surface of the Allegheny National Forest, but most mineral rights are privately owned. From 1980 until recently the Service cooperated with owners to manage drilling; owners would provide advance notice and the Service would issue a Notice to Proceed. As a result of a settlement with environmental groups, the Service changed its policy and postponed issuance of NTPs until a multi-year, Environmental Impact Study under the National Environmental Policy Act (NEPA, 42 U.S.C. 4332(C)) is complete. The district court issued a preliminary injunction against the Service, requiring it to return to its prior process. The Third Circuit affirmed. The Service does not have the broad authority it claims over private mineral rights owners' access to surface lands. Its special use regulations do not apply to outstanding rights; the limited regulatory scheme applicable to most reserved rights in the ANF does not impose a permit requirement. Although the Service is entitled to notice, and may request and negotiate accommodation of its state-law right to due regard, its approval is not required for surface access. The moratorium causes irreparable injury to owners by depriving them of unique oil and gas extraction opportunities. View "Minard Run Oil Co. v. U.S. Forest Serv." on Justia Law

Laclede Gas Company maintained gas lines along Pitman Hill Road in St. Charles County. Pitman Hill Road and the gas lines were located within areas established as public roads on five recorded subdivision plats. Each of the subdivision plats first established public roads and then designated the roads as utility easements. The plats specifically stated that one of the purposes of the utility easements was for the installation and maintenance of gas lines. The County planned to widen Pitman Hill Road, which required Laclede to relocate its gas lines. Laclede declined to pay for the relocation, after which the County filed a declaratory judgment action to require Laclede to bear the cost of relocation. The circuit court entered summary judgment in favor of the County. The Supreme Court reversed, holding that the County was required to reimburse Laclede for displacing the gas lines from Laclede's utility easement because the easements were constitutionally cognizable property interests and, therefore, requiring Laclede to relocate its gas lines without compensation would amount to an unconstitutional taking of private property. View "St. Charles County v. Laclede Gas Co." on Justia Law

Appellant, Summer Night Oil Company, and Appellees, individuals and oil companies, resolved a dispute over the operation of two oil wells through a settlement agreement. Appellant filed a motion to compel performance of the agreement after the parties failed to perform timely their obligations under the agreement. Specifically, Appellant asked the district court to compel Appellees to deliver all title clearance documents under the agreement. Appellees responded with a request to compel Appellant to pay a fine due to the EPA and a payment owed to Appellees under the agreement. Both parties sought attorney fees. The district court enforced what it determined to be the plain meaning of the agreement's terms, and (1) ordered Appellant to pay the fine owed to the EPA, (2) ordered Appellant to pay Appellee the amount owed it under the agreement, (3) ordered Appellees to deliver all title clearance documents to an escrow agent, and (4) declined to award attorney fees to either party. The Supreme Court affirmed, holding (1) the district court properly denied Appellant's motion to compel performance of the agreement according to Appellant's terms, and (2) the district court correctly denied Appellant's motion to alter or amend its judgment. View "Summer Night Oil Co. v. Munoz " on Justia Law

Appellants, Marion Energy and the State of Utah School and Institutional Trust Lands Administration, leased and owned oil and gas deposits lying underneath property owned by the KFJ Ranch Partnership. In order to build a road to access those deposits, Appellants sought to condemn a portion of KFJ's land by relying upon a statute that permits the exercise of eminent domain for the construction of roads to facilitate the working of mineral deposits. The district court dismissed Appellants' condemnation action, concluding that the statute did not provide the authority to take land for roads to access oil and gas deposits. The Supreme Court affirmed the district court's dismissal, holding that the phrase "mineral deposits" in the statute was ambiguous, and because all ambiguities in a statute purporting to grant the power of eminent domain are strictly construed against the condemning party, Appellants were not authorized by the statute to condemn KFJ's land. View "Marion Energy, Inc. v. KFJ Ranch P'ship" on Justia Law

Defendant Lang and Sons owned and operated a cattle ranch. Plaintiff Burlington Resources Oil and Gas Company leased the rights to oil and gas beneath Lang's surface estate. Burlington reinstated use of an abandoned well on Lang's property for the disposal of wastewater, which Lang objected to. Burlington filed a complaint with the district court to compel access to Lang's property, and Lang counterclaimed that it had a right to compensation for the use of the pore space beneath the abandoned well. The district court determined that Burlington had no obligation to compensate Lang separately for injecting wastewater into the pore space and that Lang had failed to prove entitlement to damages under the Surface Owner Damage and Disruption Compensation Act (SODDCA). On appeal, the Supreme Court affirmed, holding (1) the district court correctly concluded that Lang failed to establish that it was due separate compensation under SODDCA and the facts of this case, and (2) the district court correctly refused to defer to witnesses employed by the Montana Board of Oil and Gas Conservation in interpreting the SODDCA. View "Burlington Res. Oil Gas & Co., L.P. v. Lang & Sons, Inc." on Justia Law

The Andersons appealed the grant of summary judgment by the district court in favor of Hess Corporation (Hess), the successor in interest to and lessee of mineral rights on the Andersons' land. The Andersons contended that the district court erred in construing the five leases at issue as requiring Hess to engage in "drilling operations" rather than actual "drilling" in order to extend the primary terms of the leases and granting Hess's motion for summary judgment. The court held that the district court did not abuse its discretion in declining to certify the Andersons' question regarding the meaning of the phrase "engaged in drilling or reworking operations." The court also held that this disputed lease language was not ambiguous and meant "engaged in drilling operations or reworking operations." Therefore, the district court correctly interpreted the disputed lease language and properly granted summary judgment in favor of Hess on the Andersons' quiet title claim. View "Anderson, et al. v. Hess Corp." on Justia Law

Plaintiff appealed the dismissal for lack of subject matter jurisdiction of its action against defendant, alleging tort, contract, and state statutory claims and seeking, among other remedies, a constructive trust and declaratory judgment over an oil and gas lease located on allotted land, wherein title to the land was held by the United States in trust for various Indian allottees. At issue was whether the district court had federal jurisdiction. The court held that 28 U.S.C. 1360(b), 28 U.S.C. 1331, and 25 U.S.C. 345 did not grant federal jurisdiction and therefore, plaintiff presented no basis for concluding that the action was within the "limited jurisdiction" of federal courts. Accordingly, the district court properly dismissed the suit based on lack of subject matter jurisdiction and the court did not need to reach any other issues raised by the parties, including exhaustion of tribal remedies. The court noted, however, that its holding did not preclude plaintiff from seeking relief in Blackfeet Tribal Court. View "K2 America Corp. v. Roland Oil & Gas. LLC" on Justia Law

This case involved two related oil and gas mineral lease disputes that were jointly tried. At issue was whether limitations barred the Marshalls' (respondents and lessors) fraud claim against BP America Production Co., et al. (the lessee and operator), and whether Vaquillas Ranch Co., Ltd., et al. (lessors) lost title by adverse possession after Wagner Oil Co. (successors-in-interest) succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that because the Marshalls' injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations. Accordingly, the Marshalls' fraud claims against BP were time-barred. The court further held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession. View "BP America Prod. Co., et al. v. Marshall, et al." on Justia Law