Justia Energy, Oil & Gas Law Opinion Summaries

Eleanor McLaughlin acquired all oil, gas, and mineral rights underlying two parcels in Watson Township, Warren County, Pennsylvania. In 1985, she leased the oil and gas rights for each parcel to United Land Services. United Land Services in turn assigned the leases to Appellant Mitch-Well Energy, Inc. In 2008, Jack and Zureya McLaughlin sold their interest in the Warrant 3010 to Sheffield Land and Timber Company, which merged into Appellee SLT Holdings, LLC in 2012. During the initial term of the leases, Mitch-Well drilled one well on each lease parcel and produced oil in paying quantities until 1996. Mitch-Well did not drill any additional wells. After 1996, no oil was produced or royalty payments, or delay rental payments made or tendered until 2013. Nor did Mitch-Well tender any minimum payments during that period under either lease. The Pennsylvania Supreme Court granted review to consider the propriety of the Superior Court’s affirmance of the trial court’s grant of partial summary judgment in favor of Appellees in their complaint in equity against Appellant on the grounds of abandonment. Because Appellees had available to them a full and adequate remedy at law, through contract principles generally applicable to oil and gas leases, and through the specific provisions of the subject leases, the Supreme Court concluded it was error to provide recourse through application of the equitable doctrine of abandonment. View "SLT Holdings v. Mitch-Well Energy" on Justia Law

The Supreme Court reversed the judgment of the court of appeals reversing the trial court's grant of summary judgment for Defendants in this trespass to try title suit, holding that the trial court properly granted summary judgment for Defendants.Plaintiff and Defendants were lessees of adjacent mineral estates. Plaintiff brought this suit alleging that Defendants drilled several wells either on Plaintiff's leasehold or closer to the lease line that allowed by Railroad Commission rules. Defendants claimed that Plaintiff ratified the boundary line through a boundary stipulation between the fee owners of the two mineral estates and Plaintiff's written acceptance of the stipulation, thus foreclosing the trespass claims. The trial court granted summary judgment for Defendants. The court of appeals reversed, concluding that the boundary stipulation was void and therefore could not be ratified. The Supreme Court reversed, holding (1) the boundary stipulation was valid; and (2) Defendants conclusively established their ratification defense. View "Concho Resources, Inc. v. Ellison" on Justia Law

In this contract dispute involving the correct interpretation of a mineral lease's "continuous drilling program" provision the Supreme Court held that the court of appeals erred in reversing partial summary judgment for the lessee on the contract-construction issue.Lessor and Lessee were the successors-in-interest to an oil-and-gas top lease covering a 30,450-acre parcel of land. At the end of the primary term, Lessee was required to reassign to Lessor all of Lessee's operating rights in each tract of the lease not then held by production unless Lessee was engaged in a "continuous drilling program." Notwithstanding Lessee's continued drilling operations, Lessor filed a suit seeking a declaration that the lease had terminated. The trial court granted partial summary judgment for Lessor, concluding that the lease had not terminated as to non-producing tracts. The court of appeals reversed. The Supreme Court reversed, holding (1) under the lease's special definition of drilling operations, activities other than spudding-in a well are sufficient to maintain the lease as to non-producing tracts; and (2) the record conclusively established that Lessee was engaged in a continuous drilling program within the meaning of the lease. View "Sundown Energy LP v. HJSA No. 3" on Justia Law

In this second action arising out of a joint effort by TRO-X, L.P. and Eagle Oil & Gas Co. to acquire and sell oil-and-gas the Supreme Court affirmed the judgment of the court of appeals reversing the trial court's grant of summary judgment for Eagle, holding that Eagle did not conclusively establish the affirmative defenses that were the basis of its summary judgment motion.In its first suit, TRO-X alleged that Eagle deprived TRO-X of its right to acquire its share of mineral leases that Eagle retained as part of the leases' sale. The court of appeals determined that TRO-X had not been deprived of equitable title to those interests because TRO-X had always held them. In this second suit, TRO-X claimed that Eagle failed to remit its share of income generated from production on the interests that commenced after the first trial's conclusion. The trial court granted summary judgment for Eagle, and the court of appeals reversed. The Supreme Court affirmed, holding that Eagle did not conclusively establish the affirmative defenses of res judicata, statute of limitations, or waiver. View "Eagle Oil & Gas Co. v. TRO-X, L.P." on Justia Law

The Supreme Court reversed the order of the circuit court denying Petitioners' motion for summary judgment, holding that Petitioners were immune from Respondent's lawsuit pursuant to the litigation privilege and the Noerr-Pennington doctrine.Petitioners executed an oil and gas lease to a company that assigned 2,300 acres of Petitioners' tract to Respondent for a storage project. Respondent then applied to FERC for a certificate of public convenience and necessity to construct and operate a storage field. Petitioners intervened in the FERC proceeding. FERC eventually granted Respondent's request. When Respondent did not complete construction of the storage facility within the required amount of time it sought a three-year extension. Petitioners opposed the extension, and FERC denied Respondent's request to extend the timeframe. Thereafter, Petitioners filed suit against Respondent alleging breach of contract and seeking declaratory judgment. Respondent filed a counterclaim alleging, inter alia, breach of contract. Petitioners filed a motion for summary judgment, asserting that they were immune from suit pursuant to the litigation privilege and the Noerr-Pennington doctrine. The circuit court denied the motion. The Supreme Court reversed, holding that the litigation privilege and Noerr-Pennington doctrine provided Petitioners with immunity from all of Respondent's counterclaims. View "Smith v. Chestnut Ridge Storage, LLC" on Justia Law

The dispute in this case centered on two oil-and-gas-producing formations known as the Chester and the Marmaton, located in Beaver County, Oklahoma. In 1973, Arnold Petroleum, Inc., the predecessor in interest to plaintiffs (collectively, "Arnold") obtained six oil-and-gas leases covering land in Beaver County. Over the course of 1973 and 1974, Arnold Petroleum assigned its leases to Dyco Petroleum Corporation, expressly reserving an overriding royalty interest in any oil and gas produced under the leases. Dyco assigned the leases to Harold Courson, the predecessor in interest of defendant Cabot Oil & Gas Corporation. This assignment, too, was expressly subject to Arnold's overriding royalty interest. Two wells drilled in the Chester formation produced "mostly gas with some oil" continuously since the mid-1970s, and at no point since then did Arnold ever stop receiving payments on its overriding royalty interest in those producing wells. In 1984, Courson obtained several new leases from the mineral owners who had granted the 1973 leases. The 1984 leases purported to cover the same rights as the original 1973 leases, but were silent as to any particular geologic formation or zone. Arnold did not become aware of the 1984 leases until 1999 when it and other royalty holders received a letter from Courson explaining he had recompleted a well in the Chester formation that had originally been drilled into the separate Lower Chester formation by Natural Gas Anadarko, Inc. (NGA). In the 1999 conversation, a Courson employee told the Arnold landman the 1984 leases covered only "deep rights" or "lower depths" that had expired under the 1973 leases. This assertion would exclude the Marmaton. For the next 13 years, the matter of the Marmaton formation would remain dormant. Courson assigned his leases to Cabot in August 2011, and Cabot drilled and completed several horizontal wells in the Marmaton. Cabot rejected Arnold's request for payment, and Arnold sued in October 2012, seeking damages for nonpayment of royalties. Cabot argued Arnold's claims were barred because the applicable statute of limitations began to run with the filing of the new leases in 1984, which event (in Cabot's view) should have put Arnold on notice of an adverse claim to the Marmaton. The issue presented for the Oklahoma Supreme Court's review was whether plaintiffs waited too long in asserting their right to payment of the overriding royalty interest. The Court of Civil Appeals reversed the trial court's judgment in favor of plaintiffs on those grounds. The Supreme Court disagreed: this litigation could not have arisen until defendant first developed the disputed formation in 2012, and then refused plaintiffs' request for payment of royalties from that production. "Nothing preceding that sequence of events could reasonably have foreclosed plaintiffs' ability to press their claim for the payments to which they were entitled under valid mineral leases." View "Claude C. Arnold Non-Operated Royalty Interest Properties v. Cabot Oil & Gas Corp." on Justia Law

In this dispute between a coal mining company and the owner of a natural gas pipeline over whether the pipeline owner may recover for damage caused to the pipeline as a result of mining the Supreme Court reversed the judgment of the court of appeals and reinstated the judgment of the trial court in favor of the mining company, holding that surface damage liability waivers in the relevant property deeds were valid and enforceable.The mining company held its interest in the coal underneath the lands through property deeds that severed the surface estate from the mineral interest. The deeds included provisions waiving liability for damage to the land's surface caused by mining activities. The trial court entered judgment for the mining company. On appeal, the pipeline owner asserted that the surface damage liability waivers were rendered invalid by an administrative agency's regulation requiring mining operators to pay for damage to surface structures from mining activities. The court of appeals reversed. The Supreme Court reversed, holding (1) the administrative agency lacked authority to enact a regulation requiring mining operators to pay damages irrespective of common law property rights to the extent those rights have not been limited by federal law; and (2) the surface damage liability waivers at issue remained valid and enforceable. View "Columbia Gas Transmission, LLC v. Ohio Valley Coal Co." on Justia Law

In this dispute over the meaning of an oil and gas lease covering an 11,300-acre tract in Howard County, the Supreme Court reversed the judgment of the court of appeals affirming the trial court's grant of summary judgment for Energen Resources Corp. and John Quinn, holding that the contested provision of the lease in this case was ambiguous.The lease at issue allowed Endeavor Energy Resources, L.P. to retain its leasehold interest in the parcel only by drilling a new well every 150 days, with the exception that Endeavor could "accumulate unused days in any 150-day term...in order to extend the next allowed 150-day term between the completion of one well and the drilling of a subsequent well." At issue on appeal was how to calculate the number of "unused days." Energen and Quinn argued that the contested provision unambiguously allowed unused days earned in any term to be carried forward only once to the next 150-day term. The trial court agreed, and the court of appeals affirmed. The Supreme Court reversed, holding that the disputed provision was ambiguous. View "Endeavor Energy Resources, LP v. Energen Resources Corp." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals affirming the trial court's decision granting summary judgment for John Chervenak, trustee of the Chervenak Family Trust, and declaring the trust the owner of the disputed mineral rights in this case, holding that the Chervenaks satisfied the notice requirements of the Ohio Dormant Mineral Act.Timothy Gerrity filed this action to quiet title and for a declaratory judgment, claiming that he was the rightful owner of severed mineral rights under the Chervenak property. At issue was whether the Chervenaks satisfied the notice requirements that the Ohio Dormant Mineral Act, Ohio Rev. Code 5301.56(E)(1), imposes as prerequisites to deeming a severed mineral interest abandoned and vested in the owner of the land subject to the mineral interest. The lower courts rendered judgment for Chervenak. The Supreme Court affirmed, holding (1) application of the Dormant Mineral Act is not limited to circumstances in which every holder of a severed mineral interest has been identified; and (2) a surface owner must use reasonable diligence to identify and locate holders of a severed mineral interest, but what constitutes reasonable diligence will vary based on the facts of each case. View "Gerrity v. Chervenak" on Justia Law

Plaintiff-appellee Revolution Resources, LLC, (Revolution), an oil and gas well operator, filed an action under the Oklahoma Surface Damages Act (SDA), to Appoint Appraisers. In February 2018, Revolution acquired and became the operator of a 30,000 acre unit that was created in 1947 pursuant to Order 20212 of the Oklahoma Corporation Commission (OCC). The unit wasknown as the West Edmond Hunton Lime Unit (WEHLU). Defendant-appellant Annecy, LLC, (Annecy) purchased the subject premises in August 2019, with the intent to build expensive luxury homes. Appellant unsuccessfully sought a temporary injunction against Appellee's operations. Appellant appealed the interlocutory order denying its motion for temporary injunction. The Oklahoma Supreme Court granted an injunction pending the appeal. Appellant was required to post a bond securing the cost and attorney fees of the Appellee if the Supreme Court determined later the temporary injunction should not have been granted. The Supreme Court concluded the injunction should not have been granted: Annecy purchased its surface estate subject to the outstanding mineral estate held by Revolution. Annecy's surface estate is servient to that of Revolution's mineral estate. Annecy did not meet its burden of proving by clear and convincing evidence that it would be irreparably harmed by Revolution's oil and gas operations. Having failed to establish one of the four factors required, i.e., irreparable harm, by clear and convincing evidence, Annecy did not meet its burden to prove all necessary factors to obtain extraordinary relief, therefore its motion for temporary injunction was correctly denied. The temporary injunction granted by the Supreme Court was dissolved, and the matter remanded for further proceedings to determine the costs and attorney fees owed the Appellee which were secured by bond. View "Revolution Resources, LLC v. Annecy, LLC" on Justia Law