Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court affirmed the circuit court's order granting Antero Resources Corporation partial summary judgment on its claim for declaratory judgment, holding that the court did not err in concluding that the Antero top lease took priority over the EQT Production Company base lease covering the same property.Larry and Linda Lemasters, who owned the oil and gas underlying a tract of land, entered into an oil and gas lease (the base lease) with an LLC that later assigned the lease to EQT. The Lemasters subsequently entered into an oil and gas lease with Antero (the top lease). The lease was made effective immediately upon expiration of the primary term of the base lease. The Lemasters and EQT (together, Defendants) subsequently entered into a base lease amendment agreeing to extend the primary term of the base lease. Antero filed a complaint against Defendants asserting claims for, inter alia, breach of contract and declaratory judgment. The circuit court awarded summary judgment for Antero on its declaratory judgment claim, determining that the base lease and its amendment were subject to the Antero top lease. The Supreme Court affirmed, holding that the court did not err in declaring that the top lease was the valid and existing oil and gas lease covering the subject property. View "EQT Production Co. v. Antero Resources Corp." on Justia Law

The Supreme Court reversed the order of the circuit court granting summary judgment for Antero Resources Corp. and declaring that Bison Interests, LLC was entitled to no overriding royalty interest in the Marcellus shale formation underlying certain gas wells, holding that the declaratory judgment sought by Antero was barred by the doctrines of res judicata and judicial estoppel.The circuit court found Antero's action was barred neither by res judicata nor collateral estoppel because the issue of Bison's entitlement to an overriding royalty in the Marcellus shale production had not been finally adjudicated in prior litigation. The court further found that Antero was not judicially estopped from bringing its claim. The Supreme Court reversed, holding (1) Antero's action for declaratory relief was barred by the doctrine of res judicata; and (2) Antero's action was similarly, and independently, barred by the doctrine of judicial estoppel. View "Bison Interests, LLC, v. Antero Resources Corp." on Justia Law

The Supreme Court reversed the order of the circuit court denying SWN Production Company's motion to intervene in an action seeking to quiet title to a parcel of property brought by Corey Conley, holding that the circuit court abused its discretion and erred as a matter of law.The underlying action involved competing claims and interests in the mineral rights to Conley's property. SWN asserted that it had interests in oil and gas properties that would be affected by interpretation of the relevant deed. After Conley filed his complaint, SWN filed a motion to intervene, which the circuit court denied. Thereafter, SWN entered into an oil and gas lease with Conley. SWN then filed a second motion to intervene, which the circuit court denied. The Supreme Court reversed and remanded the case for further proceedings, holding that the circuit court (1) abused its discretion in determining that the SWN motion to intervene was untimely; and (2) erred as a matter of law in finding that SWN had no property interest relating to the subject of the complaint, that disposition of the civil action would not impair or impede SWN's ability to protect its interests, and that SWN's interests were adequately protected by Conley. View "SWN Production Co., LLC. v. Conley" on Justia Law

The Supreme Court affirmed the decision of the circuit court granting a preliminary injunction, holding that the court did not err when it found Plaintiff had a likelihood of succeeding on the merits of its claims and was likely to suffer irreparable harm in the absence of action by the court.Pachira Energy LLC entered into an agreement with Northeast Natural Energy LLC establishing the Blacksville Area of Mutual Interest (Blacksville AMI) and setting forth guidelines for exploiting oil and gas leases and other mineral interests. Pachira later filed a complaint against Northeast Natural Energy LLC alleging that Northeast was breaching various agreements and was abusing its power to benefit itself, to the detriment of Pachira. Among other requests for relief, Pachira sought a permanent injunction stop Northeast's use of a jointly-owned water system within the Blacksville AMI to support Northeast's drilling operations outside the Blacksville AMI and to sell water to third parties outside the Blacksville AMI. The circuit court granted Pachira's motion for a preliminary injunction. The Supreme Court affirmed, holding that it was fair for the circuit court to preserve the status quo until the parties' resolve the merits of their dispute and that there was no error in the preliminary injunction order. View "Northeast Natural Energy LLC v. Pachira Energy LLC" on Justia Law

In a dispute over ownership of certain oil and gas leases and royalty interests the Supreme Court affirmed the judgment of the circuit court granting partial summary judgment for Plaintiff and concluded that an unrecorded assignment of leasehold interests to Defendant did not defeat a subsequent modification and surrender of those same interests to Plaintiff, holding that the circuit court did not err.Specifically, the circuit court concluded that an unrecorded assignment of leasehold interests to Defendant U.S. Exploration, LLC did not defeat a subsequent modification and surrender of those same interests to Plaintiff Griffin Producing Company. The Supreme Court affirmed, holding that the circuit court did not err in concluding that the assignment and surrender from Magnum Oil Corporation to Griffin Producing Company “were valid documents that transferred title in the subject overriding royalty interests and surrendered the subject leasehold estates as of the time of their recording.” View "U.S. Exploration, LLC v. Griffin Producing Co." on Justia Law

In this ongoing Marcellus shale litigation arising that arose from claims asserted by Plaintiffs - surface owners of several tracts of land - the Supreme Court affirmed the order of the Mass Litigation Panel (MLP) granting summary judgment in favor of Defendants - the leaseholder of the gas and oil estates and the company who was conducting the drilling - holding that there were no genuine issues of material fact precluding summary judgment.Plaintiffs alleged that their use and enjoyment of their land was being improperly and substantially burdened by horizontal wells being used to develop the Marcellus shale underlying their properties even where the wells were not physically located on Plaintiffs' properties. In granting summary judgment for Defendants the MLP concluded that the effects on the surface owners resulting from the horizontal drilling were within the implied rights to use the surface granted by virtue of the relevant severance deeds and did not impose a substantial burden on the surface owners. The Supreme Court affirmed, holding that Plaintiffs failed to establish the existence of a genuine issue of material fact as to whether the effects on their surface estates were reasonably necessary to develop the mineral estate or whether they were being substantially burdened by Defendants' activities. View "Andrews v. Antero Resources Corp." on Justia Law

In these consolidated appeals from the business court's orders reversing various Boards of Assessment Appeals and rejecting the West Virginia State Tax Department's valuation of Respondents' gas wells for ad valorem tax purposes the Supreme Court affirmed in part and reversed in part the business court's judgment, holding that the business court erred in two respects.Specifically, the Court held that the business court (1) did not err in concluding that the Tax Department violated the applicable regulations by improperly imposing a cap on Respondents' operating expense deductions; (2) erred in rejecting the Tax Department's interpretation of the applicable regulations concerning the inclusion of post-production expenses in the calculation of the annual industry average operating expenses; and (3) erred in crafting relief permitting an unlimited percentage deduction for operating expenses in lieu of a monetary average. View "Steager v. Consol Energy, Inc." on Justia Law

The Supreme Court affirmed the circuit court's order granting partial summary judgment, finding that Defendant trespassed on Plaintiffs' surface lands to the extent it was drilling for and removing minerals from neighboring properties and awarding Plaintiffs $190,000 in damages, holding that the partial summary judgment order and judgment order were supported by the record.The circuit court found that Defendant trespassed to the extent it used Plaintiffs' surface tracts to conduct operations under neighboring mineral estates. The Supreme Court affirmed, holding (1) a mineral owner or lessee does not have the right to use the surface to benefit mining or drilling operations on other lands in the absence of an express agreement with the surface owner permitting those operations; and (2) the circuit court correctly found that Defendant trespassed on Plaintiffs' surface lands to the extent it used those lands to extract minerals from neighboring properties. View "EQT Production Co. v. Crowder" on Justia Law

The Supreme Court affirmed the order of the circuit court affirming the determination of the Board of Equalization and Review that Petitioners Murray Energy Corporation and Consolidation Coal Company's coal interests were properly valued and assessed by Defendants, holding that the circuit court properly concluded that the method of valuing coal properties violated neither the statutory requirement of assessment at "true and actual value" nor the constitutional equality requirements of the West Virginia Constitution and the equal protection provisions of the United States and West Virginia Constitutions.Specifically, the Court held (1) the methodology of valuing Petitioners' coal properties for ad valorem tax valuation purposes, as set forth in West Virginia Code of State Rules 110-1I-1 et seq., does not violate the requirement set forth in W. Va. Code 11-6K-1(a) that natural resources property be assessed based upon its "true and actual value"; and (2) the valuation methodology contained in the Code of State Rules does not violate the equality provision of W. Va. Const. art. X, 1 or the equal protection provisions of the United States and West Virginia Constitutions. View "Murray Energy Corp. v. Steager" on Justia Law

The Supreme Court affirmed the judgment of the circuit court granting summary judgment against Petitioners in their action against Respondents based upon a coal lease agreement between the parties and granting summary judgment against Respondents’ counterclaim, holding that there was no error to the dismissal of the parties’ respective claims.In granting summary judgment against Petitioners, the circuit court concluded that Respondents had no obligation to diligently mine coal and did not have to make royalty payments based upon comparable sales by other mining companies. The circuit court also granted summary judgment against Respondents’ counterclaim seeking damages for Petitioners’ refusal to consent to an assignment or sublease of the coal lease and for alleged tortious interference with an asset agreement Respondents had with another company. The Supreme Court affirmed, holding that there was no error in the circuit court’s judgment. View "Bruce McDonald Holding Co. v. Addington Inc." on Justia Law