Justia Energy, Oil & Gas Law Opinion Summaries

In this case, Jonathan Garaas and David Garaas, serving as co-trustees of multiple family trusts, appealed a dismissal of their complaint against Petro-Hunt, L.L.C., an oil company operating on land in which the trusts own mineral interests. The trusts claimed that Petro-Hunt had decreased their royalty interest without proper basis and sought both a declaratory judgment affirming their higher royalty interest and damages for underpayment. The district court dismissed the complaint without prejudice, stating that the trusts had failed to exhaust their administrative remedies before the North Dakota Industrial Commission.The North Dakota Supreme Court affirmed the lower court's decision, stating that the trusts needed to exhaust their administrative remedies before bringing their claims to the court. The court reasoned that the issues raised by the trusts involved factual matters related to the correlative rights of landowners within the drilling unit, which fall within the jurisdiction of the Industrial Commission. The court held that the commission should first consider these issues, make findings of fact, and develop a complete record before the case proceeds to the district court. It further noted that, after exhausting their administrative remedies, the trusts could then bring an appropriate action for declaratory relief or damages in district court. View "Garaas v. Petro-Hunt" on Justia Law

The Supreme Court of Mississippi was asked to interpret Mississippi's Principal and Income Act of 2013 in a case involving the distribution of funds from a trust. The Crider Family Share Trust named Juliette Crider as the income beneficiary and Nathan Ricklin and Megan Woolwine as remainder beneficiaries. The Trustee, Haidee Oppie Sheffield, distributed a significant amount from Muskegon Energy Co. to the income beneficiary. Ricklin and Woolwine contended that this distribution was a breach of fiduciary duty, as they believed the funds should have been allocated to them as remainder beneficiaries. They argued that the distribution constituted a partial liquidation of the energy company's assets, and pursuant to the Principal and Income Act, the funds should have been allocated to the principal (the remainder beneficiaries) rather than the income beneficiary.The Jackson County Chancery Court ruled in favor of Sheffield. On appeal, the Supreme Court of Mississippi affirmed the lower court's decision. The Supreme Court held that the determination of whether a distribution is in partial or full liquidation, as per Section 91-7-401(e) of the Principal and Income Act, must be made on a post-tax basis. The court found that after reducing for income taxes paid by the Trust, the distributions from Muskegon Energy Co. fell below the 20 percent threshold that would trigger a partial liquidation. Therefore, the court concluded that the distributions were not in partial liquidation and Sheffield, the Trustee, did not breach any duty owed to Ricklin and Woolwine, the remainder beneficiaries. View "In The Matter of the Crider Family Share Trust v. Sheffield" on Justia Law

The dispute revolves around which of two oil and gas leases controls the royalty payments for nine wells collectively called the Bernhardt Wells. The Supreme Court of the State of Oklahoma affirmed the trial court's summary judgment in favor of defendant, Devon Energy Production Company, L.P. The plaintiffs, trustees of The Eunice S. Justice Amended, Revised, and Restated 1990 Revocable Trust Agreement, argued that a 1978 Lease entitles them to a 3/16 royalty, while Devon maintained that a 1973 Lease, entitling the Trust to a 1/8 royalty, controls. The court found that the dispute over which lease controls is best characterized as a quiet title claim, subject to a 15-year statute of limitations, which began when the injury occurred in 1978. Thus, the Trust's quiet title claim, filed more than 15 years later, was time-barred. The court also held that the trial court did not err in denying the Trust's motion to compel the production of various title opinions in Devon's possession. View "BASE v. DEVON ENERGY PRODUCTION" on Justia Law

Angus Kennedy owned real property and mineral interests in McKenzie County, North Dakota. In 1960, Angus and his wife, Lois, executed two deeds conveying the surface and “excepting and reserving unto the parties of the first part, their heirs, successors or assigns, all right, title and interest in and to any and all . . . minerals in or under the foregoing described lands.” Lois did not own an interest in the property when Angus and Lois Kennedy executed the deeds. Angus died in 1965, and Lois died in 1980. Angus and Lois did not have children together. Angus had six children from a previous marriage. Angus' heirs executed numerous mineral leases for the property. Lois had one child, Julia Nevin, who died in 1989. In 2016 and 2017, Julia Nevin’s surviving husband, Stanley Nevin, executed mineral leases with Northern Oil and Gas, Inc. In 2018, Stanley sued the successors in interest to Angus, alleging Lois owned half of the minerals reserved in the 1960 deeds. In response, the Angus heirs claimed Angus did not intend to reserve any minerals to Lois because she did not own an interest in the property conveyed in the 1960 deeds. The district court granted Northern Oil’s motion to intervene. Northern Oil appeals the quiet title judgment deciding Northern Oil did not own mineral interests in the McKenzie County property, arguing the district court erred in concluding the deeds at issue were ambiguous as to whether Angus intended to reserve minerals to his wife, Lois. Finding no reversible error in the trial court judgment, the North Dakota Supreme Court affirmed. View "Nevin, et al. v. Kennedy, et al." on Justia Law

Plaintiff David Farrell, Trustee of the David Farrell Trust, appealed the grant of summary judgment for defendants Vermont Electric Power Company and Vermont Transco (together, VELCO), the holders of an easement for the construction and operation of electrical transmission lines on plaintiff's property. Plaintiff claimed that VELCO's easement was limited to the installation and operation of transmission lines necessary for the "Queen City Tap Project." He argued that VELCO exceeded the scope of its easement by installing a second transmission line on plaintiff's property in connection with an unrelated transmission-line project. The trial court held that the easement's express terms authorized VELCO to install transmission lines unrelated to the Queen City Tap Project, and that any increased impact on plaintiff's property caused by the new line did not amount to overburdening. "VELCO's easement, by its express terms, authorized its installation of the NRP line on the Property. Such use is also consistent with the easement's purpose - the transmission of electricity - and does not impose an additional burden on the Property requiring further compensation." Accordingly, the trial court's grant of summary judgment for VELCO was affirmed. View "Farrell v. Vermont Electric Power Co." on Justia Law

Brigham Oil and Gas, L.P. ("Brigham"), appealed a partial judgment that dismissed its action against Lario Oil & Gas Company ("Lario") and Murex Petroleum Corporation ("Murex") which sought oil and gas production payments based on a claimed leasehold interest in certain mineral acres in Mountrail County. The Triple T, Inc. ("Triple"), and Christine Thompson, as sole trustee of the Navarro 2009 Living Trust Agreement, appealed an order denying their motions to intervene and to vacate the judgment. The land that contained the oil and mineral rights at issue in this case were probated in 2008 and became a part of the Navarro Trust. Late that year, the Trust executed an agreement which purported to resolve an issue over ownership of the mineral rights. In 2009, Brigham commenced this action against Lario and Murex alleging that it was entitled to a percentage of the production from the oil and mineral interests from the 2008 agreement. Brigham argued the district court erred in determining that Lario had the controlling interest in the 2008 agreement and that Brigham had no interest in the oil and gas leasehold estate in the subject property. Upon review of the lengthy trial record and the applicable legal authority, the Supreme Court affirmed the district court's judgment and order. View "Brigham Oil v. Lario Oil" on Justia Law