Justia Energy, Oil & Gas Law Opinion Summaries

Respondents filed claims against Petitioners relating to certain oil and gas ventures. At issue in this case was Respondents’ assignment claim, which an involved an agreement between Respondents and Petitioners for Respondents to pay a portion of drilling and operating costs in exchange for an assignment of a partial working interest in producing wells. After a bench trial, the trial court largely ruled for Respondents and awarded them $35,000 in attorney’s fees. The Supreme Court modified Respondents’ recovery on appeal and remanded for the trial court to redetermine the attorney’s fee award. On remand, the trial court awarded Respondents $30,000 in attorney’s fees. The Supreme Court reversed, holding that no legally sufficient evidence supported the amount of the attorney’s fee award because Respondents offered no evidence of the time expended on particular tasks as required via the lodestar method. Remanded. View "Long v. Griffin" on Justia Law

In 2012, Monongahela Power Company (“Mon Power”) filed a petition with the Public Service Commission of West Virginia ("Commission") to approve a generation resource transaction between it and Allegheny Energy Supply, LLC (“AE Supply”). The transaction consisted of Mon Power’s acquisition of AE Supply’s interest in the Harrison Power Station (“the plant”) and Mon Power’s recovery of a portion of its investment in that acquisition. The Commission approved a $257 million acquisition adjustment in the purchase price of the plant and allowed Mon Power, under certain conditions, to pass the acquisition adjustment to its customers in the rates that customers pay for electricity. The Supreme Court affirmed the Commission’s order, holding that the Commission’s findings were not contrary to or unsupported by the evidence and were not arbitrary, and the Commission’s application of the law was consistent with Commission precedent. View "W. Va. Citizen Action Group v. Pub. Serv. Comm’n of W. Va." on Justia Law

In 2012, the Montana Board of Oil and Gas Conservation (MBOGC) adopted special statewide temporary spacing units for certain wells. Petitioners = filed a petition for judicial review of MBOGC’s order, stating that it was filed pursuant to Mont. Code Ann. 82-11-144 and Mont. Code Ann. 2-4-702. The district court dismissed Petitioners’ proceeding, stating that the “sole remedy for a person aggrieved by an order of the MBOGC was a challenge under Montana Code Ann. 82-11-144.” The Supreme Court reversed, holding that the district court erred in dismissing the action, as Petitioners’ allegations, coupled with their express reliance upon section 82-11-144 as a legal basis for their petition, should have been sufficient to save their petition from dismissal on the ground that they had not pursued their “sole remedy” of proceeding under that statute. View "Ostby v. Bd. of Oil & Gas Conservation" on Justia Law

In 1967, Severt Kvalheim conveyed certain real property to Gordon Holsti by warranty deed. Kvalheim reserved fifty percent of the mineral rights for himself. That same year, Kvalheim executed a will devising to each of his heirs a one-eighth interest in his estate. Kvalheim died in 1969. In 2007, Gordon Holsti conveyed the surface estate to his sons (the Holstis). Believing Kvalheim’s mineral interest had lapsed and been abandoned because of nonuse, the Holstis published a notice of lapse of mineral interest in the official county newspaper. When no one filed a statement of claim asserting ownership of the mineral interest severed from the property, the Holstis brought a quiet title action. The circuit court ruled that the Holstis were the owners of the entire mineral interest, concluding (1) Kvalheim’s mineral interest had been abandoned under section S.D. Codified Laws 43-30A-2, -3; and (2) the Holstis gave proper notice of the lapse of the mineral interest even though they did not serve notice of the lapse on Kvalheim’s heirs. The Supreme Court reversed, holding that the mineral interests were not abandoned under section 43-30A-2. Remanded. View "Holsti v. Kimber" on Justia Law

The Smith brothers and others operated Target Oil, which conducted speculative resource drilling in Kentucky, Tennessee, Texas, and West Virginia. Wells they represented as sure-fire investments often produced virtually no oil and many wells were never completed. From 2003 to 2008, Target Oil received about $15,800,000 in investor funds but, according to the postal inspector, distributed only $460,000 in royalties. The brothers were arrested and accused of conspiring with others to defraud investors of millions of dollars. Michael was convicted of conspiracy to commit mail fraud, 18 U.S.C. 1349, and of 11 substantive counts of mail fraud, 18 U.S.C. 1341, and sentenced to 120 months in prison and ordered to pay $5,506,917 in restitution. Christopher was convicted by the same jury on seven counts of mail fraud and was sentenced to 60 months in prison and ordered to pay $1,652,075 in restitution. The Seventh Circuit affirmed, rejecting arguments that: the evidence was insufficient to support their convictions; the government offered evidence that constructively amended or varied the indictment; their sentences are procedurally and substantively unreasonable; one of the forfeiture judgments was excessive; the district court erred in excluding a defense expert witness; and items of evidence relating to the alleged fraud were erroneously admitted. View "United States v. Smith" on Justia Law

Thoroughbred Associates drilled a gas well (Well) in Comanche County. Thoroughbred subsequently acquired leases of land near the Well and created a unit called the Thoroughbred-Rietzke Unit (Rietzke Unit). Defendants became successors-in-interest to a lease (OXY Lease) Thoroughbred entered into for oil and gas underlying a tract near the Well. The parties disagreed, however, about whether the Well was draining the Rietzke Unit. Thoroughbred stopped submitting royalty payments to Defendants accruing from the Rietzke Unit. Thoroughbred subsequently filed a complaint for a declaratory judgment that it had been mistaken when it included the OXY Lease in the Rietzke Unit. Defendants counterclaimed. The district court concluded (1) Defendants failed to prove that any drainage of the leased lands occurred; and (2) the Lease was properly included in the Rietzke Unit. The Supreme Court affirmed in part and reversed in part, holding (1) Defendants failed to prove their drainage claim; and (2) the court of appeals erroneously granted summary judgment to Defendants on their claim that the Lease should be included in the Rietzke Unit.View "Thoroughbred Assocs., LLC v. Kansas City Royalty Co., LLC " on Justia Law

A 2007 stockholders’ derivative suit alleged that Massey’s officers and directors breached their fiduciary duties by failing to make sure that Massey employees were complying with environmental and mine worker safety laws and regulations. A 2008 settlement released the claims in exchange for certain reforms to be made a part of corporate governance policies relating to company oversight and conduct regarding environmental and mine worker safety standards. The reforms were incorporated into Massey’s written Corporate Governance Agreement and were to remain in effect for five years. On April 5, 2010, an explosion occurred at Massey’s Upper Big Branch Mine at Montcoal, West Virginia, killing 29 miners. According to a contempt petition, investigations subsequent to the disaster found systematic mine safety compliance failures leading up to the explosion. The trial court dismissed the civil contempt petition. The West Virginia Supreme Court affirmed. The petitioners lacked standing to pursue contempt proceedings because they no longer own any Massey stock; Massey has been purchased by Alpha Natural Resources; and the respondents were removed by Alpha as corporate directors and officers. View "Manville Pers. Injury Settlement Fund v. Blankenship" on Justia Law

Magellan Pipeline Company, LP appealed a sales tax assessment levied by the state Department of Revenue and Regulation on its additive injection and equipment calibration services. The Hearing Examiner, Department Secretary and trial court all found Magellan's services were non-exempt from tax. Upon review, the Supreme Court concluded that under the plain language of the applicable statute, Magellan's services were exempt from sales tax.View "Magellan Pipeline Co v. Dept. of Revenue & Regulation" on Justia Law

North Central Electric Cooperative appealed a district court judgment affirming a Public Service Commission order that dismissed its complaint against Otter Tail Power Company. The Commission decided it did not have regulatory authority over Otter Tail's extension of electric service to a facility owned by the Turtle Mountain Band of Chippewa Indians on tribal trust land within the Turtle Mountain Indian Reservation. North Central argued on appeal: (1) the Commission has jurisdiction under North Dakota law; and (2) the Commission's findings were not supported by a preponderance of the evidence and did not sufficiently address North Central's evidence. Upon review, the Supreme Court affirmed, concluding the Commission did not err in deciding it lacked authority to regulate the Tribe's decision to have Otter Tail provide electric service to a tribal-owned facility on tribal-owned land within the reservation.View "North Central Electric Coop., Inc. v. Public Service Commission" on Justia Law

Alaskan Crude Corporation applied to the Alaska Oil and Gas Conservation Commission to have a suspended the "Burglin 33-1" well reopened to explore for oil and gas. Arguing that it was highly unlikely that oil from the well would rise to the surface unassisted, Alaskan Crude requested to be exempted from oil discharge response requirements or, in the alternative, to have the requirements reduced. The Commission made successive reductions to the technical flow-rate assessments and the response planning standards that it recommended to the Alaska Department of Environmental Conservation for use in setting Alaskan Crude’s discharge response requirements. The Commission declined, however, to classify the Burglin 33-1 well as a gas facility, which would have exempted Alaskan Crude entirely from such requirements. Alaskan Crude appealed to the superior court, challenging the Commission’s recommended response planning standards and its well classification. The superior court affirmed. Alaskan Crude appealed from the superior court’s decision. Finding no error, the Supreme Court affirmed. View "Alaskan Crude Corporation v. Alaska" on Justia Law