Justia Energy, Oil & Gas Law Opinion Summaries

In 1953, Standard Oil Company owned a refinery in Mandan, and the Northern Pacific Railway Company owned land between the refinery and the Heart River. Northern Pacific executed a written permit granting Standard Oil permission to construct a pipeline along Northern Pacificâs right-of-way from the refinery to the river. The permit provided that Standard Oil could not transfer or assign the permit without Northern Pacificâs permission. In 1998, Northern Pacificâs successor-in-interest sold the portion of land that contained Standard Oilâs pipeline. In 2001, Standard Oilâs successor-in-interest, sold the refinery. In 2004, Tesoro, the new owner of the refinery, filed a âNotice of Permitâ along with the 1953 permit, with the Recorderâs Office. Later that year, the property was sold to Riverwood Commercial Park. Disputes arose between Riverwood and Tesoro over Riverwoodâs planned development of the property. The dispute bounced between the district and Supreme Court for various theories of recovery. Riverwoodâs theories centered on the characterization of the 1953 âpermitâ: all of Riverwoodâs claims would fail as a matter of law if the 1953 permit was not a license but an easement. After thorough review of the record, the Supreme Court concluded that the 1953 permit was indeed an easement, and affirmed a grant of summary judgment in favor of Tesoro and Standard Oil.

This case involved two related oil and gas mineral lease disputes that were jointly tried. One of the disputes was between petitioners, BP American Production Co., Atlantic Richfield Co., and Vastar Resources, Inc. (collectively, "BP"), the lessee and operator, and respondents, the Marshall family, the lessors. The other dispute was between BP's successors-in-interest, Wagner Oil Co. (collectively, "Wagner"), and another lessor, respondents Vaquillas Ranch Co. Ltd. ("Vaquillas"). At issue was whether limitations barred the Marshall family's fraud claim against BP and whether Vaquillas lost title by adverse possession after Wagner 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 Marshall family 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 and therefore, the Marshall family's fraud claims against BP were time barred. The court also 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.