Justia Energy, Oil & Gas Law Opinion Summaries

The Indiana Utility Regulatory Commission (IURC) approved a contract for the purchase of substitute natural gas and directed the procedure for resolving future related disputes. The court of appeals reversed the IURC's approval of the contract because a definition term in the contract deviated from the required statutory definition. The parties to the contract subsequently amended the contract to delete the language that the court of appeals found improper. The Supreme Court vacated the reversal of the IURC's order, held that the amended contract that corrected the definitional error rendered the definitional issue moot, and summarily affirmed the court of appeals as to all other claims.View "Ind. Gas Co., Inc. v. Ind. Fin. Auth." on Justia Law

A Regional Transmission Organization is a voluntary association primarily of utilities that either own electrical transmission lines that comprise a regional electrical grid or generate electricity that is transmitted to the customers in the region. Members of a Regional Transmission Organization and the Illinois Commerce Commission, on behalf of the largest electrical utility in Illinois, (collectively PJM) obtained a remand of an order of the Federal Energy Regulatory Commission in 2009. That order allocated costs for certain new high‐voltage network transmission lines that are part of a regional grid that includes the western utilities, but are all located in PJM’s eastern region and primarily benefit that region. Unhappy with the order issued on remand, PJM returned to court. The Seventh Circuit again remanded, acknowledging that the benefits of new facilities to the utilities may be unquantifiable because they depend on the likelihood and magnitude of outages and other contingencies. The order should not shift a grossly disproportionate share of costs to western utilities, given that the projects will confer only future, speculative, and limited benefits to those utilities.View "IL Commerce Comm'n v. Fed. Energy Regulatory Comm'n" on Justia Law

Defendants Citation Oil & Gas Corp., Petro-Hunt LLC, and other working interest owners appealed a district court summary judgment quieting title to an oil and gas lease in Greggory Tank. In 1982, George and Phyllis Tank executed an oil and gas lease in favor of Petro-Lewis Funds, Inc. The parties agreed to extend the primary term of the lease for three more years, ending July 15, 1989. In May 1983, the Tank 3-10 well was spudded in the northwest quarter. The well produced until October 1996. In June 1998, the Tank 3-10R well was spudded and replaced the Tank 3-10 well. The Tank 3-10R well continues to produce oil or gas. In June 1988, the Tank 13-10 well was spudded in the southwest quarter. The well continuously produced oil or gas until October 2008, and intermittently produced oil or gas until January 2012. Tank was the successor in interest to George and Phyllis Tank and was the owner of minerals in the southwest quarter of section 10. In September 2011, Tank sued the defendants, seeking to cancel the oil and gas lease to the extent it covered the southwest quarter. The defendants moved for summary judgment, seeking dismissal of all of Tank's claims. The defendants argued the continued drilling and operation of oil and gas wells on the leased property maintained the lease beyond the primary term and the lease remained in full force and effect. The district court denied the defendants' motion for summary judgment, ruling the lease had expired and was no longer valid on the southwest quarter. The court determined summary judgment was appropriate because there were only issues of law to resolve, including the interpretation of an unambiguous contract and the application of undisputed facts. Finding no reversible error in the district court's decision, the Supreme Court affirmed. View "Tank v. Citation Oil & Gas Corp." on Justia Law

Helmerich & Payne, Inc. (H&P) appeals a judgment in favor of the plaintiffs, who are a class of oil and gas royalty owners. The class alleged that the defendant breached contractual and fiduciary duties by allowing uncompensated drainage of natural gas to occur from the leases and that the defendant engaged in constructive fraud and was unjustly enriched by failing to pay royalty amounts that the class alleged were included in a settlement between the defendant and ANR Pipeline. The jury returned verdicts on three alternative theories of recovery. The trial court judge granted judgment that included disgorgement of profits based on a sum the trial court found unjustly enriched H&P. On appeal, the Court of Civil Appeals affirmed in part and reversed in part, and remanded with instructions. H&P argued on appeal to the Supreme Court that: (1) the trial court erred in its jury instructions for uncompensated drainage that barred consideration of counterdrainage; (2) the appellate court erred by allowing a breach of contract claim to be recast as an equitable unjust enrichment claim; (3) the appellate court erred in affirming a "mathematically impossible" jury verdict on plaintiffs' constructive fraud claims; and (4) the appellate court erred in affirming the constructive fraud damage award notwithstanding that no fraud claim was ever certified. After review, the Supreme Court found: (1) the trial court committed no reversible error; (2) the jury found that plaintiffs did not prove by clear and convincing evidence that H&P acted in reckless disregard for the rights of others, nor that H&P acted intentionally and with malice toward others; (3) because the Court reversed the judgment based on equity, the third reason for granting certiorari was answered; and (4) having reversed the constructive fraud damage award, the Court held this issue was moot. View "Krug v. Helmerich & Payne, Inc." on Justia Law

A mineral lessee operated two wells on two contiguous tracts of land. When one of the wells stopped producing, the lessee pooled parts of the two mineral leases. Landowners subsequently bought a tract of land that included the road the lessee used to access the producing well. The road was across the surface of the lease without production. After traffic on the road increased, the landowners filed suit against the lessee, claiming that the lessee had no legal right to use the surface of their tract of land to produce minerals from the operating well. The trial court determined that the lessee did not have the right to use the road to access the producing lease and granted declaratory and injunctive relief. The Supreme Court reversed, holding (1) once pooling occurred, the pooled parts of the two contiguous tracts no longer maintained separate identities insofar as where production from the pooled interests was located; and (2) therefore, the lessee had the right to use the road to access the pooled part of the tract of land containing the producing well. View "Key Operating & Equip., Inc. v. Hegar" on Justia Law

The issue this case presented for the Supreme Court's review was an order of the Idaho Public Utilities Commission holding that it had jurisdiction to decide whether the force majeure clauses in the Appellants' contracts with Idaho Power Company excused them from their contractual obligations to have their power generation facilities constructed and in operation by specified dates in order to sell electricity to Idaho Power. Finding no reversible error, the Supreme Court affirmed the Commission. View "Idaho Power v. New Energy Two & IPUC" on Justia Law

This case was an appeal of a final water court order which voided a rule promulgated by the Office of the State Engineer regarding nontributary ground water extracted in the course of coalbed methane (CBM) production and other oil and gas development. The final rules were challenged by owners of vested water rights and citizen groups whose members owned vested water rights. After extensive briefing by the parties, the water court upheld the Final Rules in their entirety except for the "Fruitland Rule," which it invalidated. The water court held that although H.B. 1303 granted authority to the State Engineer to promulgate the Fruitland Rule, the Tribal Rule essentially divested the State Engineer of that authority. The water court also found that the State Engineer had issued an improper "advisory" rule, and thus could not promulgate the Fruitland Rule unless he first obtained a judicial determination of his authority over nontributary ground water underlying the Reservation. The State Engineer, the Tribe, and several Intervenors appealed the water court's decision. Upon review, the Supreme Court reversed, concluding that the water court erred in invalidating the Fruitland Rule based on the Tribal Rule. The Court concluded the Tribal Rule did not divest the State Engineer of this authority: it stated on its face that the Final Rules themselves do not form the basis of or "establish" the State Engineer's authority to administer the nontributary ground water within Reservation boundaries. Because the Tribal Rule did not divest the State Engineer of his authority, the water court erred in invalidating the Fruitland Rule on that ground. Furthermore, the water court also erred in labeling the Fruitland Rule an "advisory" rule and in requiring the State Engineer to obtain a judicial determination that he had authority to administer nontributary ground water within the boundaries of the Reservation. Accordingly, the Supreme Court reversed the water court’s invalidation of the Fruitland Rule and remanded the case for further proceedings. View "Dick Wolfe v. Pawnee Well Users, Inc." on Justia Law

Patrick Wagner appealed the grant of summary judgment that held as a matter of law that his property was burdened by either an express or an implied roadway easement, and that dismissed his claims for injunctive relief and damages against Crossland Construction Company, Inc., Baker Hughes Oilfield Operations, Inc., M & K Hotshot & Trucking, Inc., and Titan Specialties, Ltd. Upon review of the matter, the Supreme Court concluded that, as a matter of law, the language in the warranty deed at issue in this case did not create or reserve an express easement. Furthermore, the Court concluded genuine issues of material fact precluded the district court from resolving whether an implied easement exists. Accordingly, the Court reversed and remanded the case for further proceedings.View "Wagner v. Crossland Construction Company, Inc." on Justia Law

Earl and Harold Van Sickle appealed, and Hallmark & Associates, Inc., Frank Celeste, William R. Austin, Phoenix Energy, Bobby Lankford, and Earskine Williams, and Missouri Breaks, LLC, cross-appealed an amended judgment that held Missouri Breaks liable to the Van Sickles for unpaid pre-bankruptcy confirmation royalties and awarding the Van Sickles interest and attorney's fees. Upon careful consideration of the trial court record, the Supreme Court concluded the court did not err in holding Missouri Breaks liable under state law for pre-bankruptcy confirmation royalties owed to the Van Sickles. Furthermore, the Court concluded the district court did not abuse its discretion in awarding the Van Sickles attorney's fees and did not err in awarding them simple interest under the statute. View "Van Sickle v. Hallmark & Assoc., Inc." on Justia Law

Wausau Development Corporation ("WDC") appeals a circuit court judgment in favor of Natural Gas & Oil, Inc. ("NGO"). NGO filed a complaint seeking a judgment determining the validity of certain oil and gas leases held by WDC to particular wells located in Lamar County. NGO alleged: WDC was a Mississippi corporation with a principal office located in Mississippi and that WDC was not authorized to conduct business in Alabama because WDC was not registered as a foreign entity; that WDC had obtained leases to the wells but that, by their terms, WDC's leases had expired and had not been held open by production; and it had obtained new and current leases on the wells. WDC argued on appeal that the circuit court exceeded its discretion by granting NGO's motion for a judgment on the pleadings because, it said, the undisputed facts in the pleadings did not support the circuit court's judgment as a matter of law. The Supreme Court agreed and reversed the circuit court's judgment. View "Wausau Development Corporation v. Natural Gas & Oil, Inc. " on Justia Law