Justia Energy, Oil & Gas Law Opinion Summaries

The Forrest County Board of Supervisors passed an ordinance requiring oil and gas facilities located within the county be fenced in. Delphi Oil, Inc. appealed a circuit court order that upheld the Board's ordinance, arguing that the regulatory authority of the State Oil and Gas Board (OGB) preempted any local regulations of oil and gas activity. The Supreme Court found the state law did not preempt the local ordinance, and affirmed.View "Delphi Oil, Inc. v. Forrest County Board of Supervisors" on Justia Law

SEECO, Inc. owned oil-and-gas leases and possessed rights authorizing it to explore for and develop minerals from several tracts of land. SEECO filed an interpleader action to determine the ownership of the oil, gas, and minerals in the land. Appellee requested that the circuit court quiet title and confirm title in Appellees. Several defendants were named in the action. The circuit court ruled that a 1929 mineral deed, even with a blank left empty in the granting clause, conveyed one hundred percent of the mineral interest in three tracts of land to J.S. Martin. Appellees included the Stanton Group, as Martin's heirs and successors in interest, and SEECO. Appellants appealed, arguing that the 1929 mineral deed was void because the description of the interest was so vague that it was unenforceable. The Supreme Court affirmed, holding that the 1929 mineral deed was unambiguous, and the circuit court did not err by refusing to consider the parol evidence of a subsequent 1930 deed. View "Barton Land Servs., Inc. v. SEECO, Inc." on Justia Law

Defendant-appellant offered to purchase plaintiffs-appellees' mineral interest in Seminole County. At the time, plaintiffs did not know that they had inherited the mineral interest, that the mineral interest was included in a pooling order, or that proceeds had accrued under the pooling order. Defendant admitted it knew about the pooling order and the accrued proceeds but did not disclose these facts in making the offer. Plaintiffs signed the mineral deeds which defendant provided, and subsequently, they discovered the pooling order and the accrued proceeds. Plaintiffs filed suit against defendant for rescission and damages, alleging misrepresentation, deceit and fraud. The trial court entered summary judgment in favor of plaintiffs. The Court of Civil Appeals reversed. The issues before the Supreme Court on appeal were: (1) whether the summary judgment record on appeal established that defendant owed the plaintiffs a duty to disclose the pooling order and the accrued mineral proceeds when it made an unsolicited offer to purchase their undivided mineral interest in Seminole County and provided the mineral deeds to be executed; and if so, (2) whether rescission of the mineral deeds was a remedy for defendant's breach of the disclosure duty. The Court held that defendant owed a duty to disclose the accrued mineral proceeds to plaintiffs when it offered to purchase the mineral interest and provided the mineral deeds conveying the mineral interest and assigning the accrued mineral proceeds, if any. Furthermore, the Court held that rescission is an appropriate remedy in this case for the breach of defendant's disclosure duty. View "Croslin v. Enerex, Inc." on Justia Law

Northern Oil & Gas, Inc. appealed a judgment ordering reformation of an oil and gas lease and quieting title to the oil and gas leasehold estate in Murex Petroleum Corporation, John H. Holt, LBK Sales & Service, Inc., Racer Oil & Gas, LC, and Double L, LLC. In 2007, a landman working for Morris Creighton signed an oil and gas lease with the original mineral holder. The lease was recorded, but a month later, a typographical error was discovered in the lease’s property description. Six months later, Creighton assigned his interest in the lease, with an exception of an overriding royalty interest, to Antares Exploration Fund, L.P. Antares then assigned its interest in the Creighton lease to Northern. Northern brought an action to quiet title against Creighton and Murex to determine rights of the parties to the oil and gas leasehold estate. Murex filed a third-party complaint against the original mineral rights holders, a cross-claim against Creighton, and a counterclaim against Northern. Upon review, the Supreme Court concluded that the district court erred in concluding, as a matter of law, that Creighton was not a good faith purchaser and the Court held that there was a question of fact whether Creighton had constructive notice when he acquired rights under the lease. The Court reversed the judgment and remanded the case for further proceedings.View "Northern Oil & Gas, Inc. v. Creighton" on Justia Law

Slawson and Gadeco were owners of oil and gas leasehold interests in a section of real property located in Mountrail County which comprised the spacing unit for the Coyote 1-32H well. In 2009, Slawson sent Gadeco and to other working interest owners in the spacing unit invitations to participate in the cost of drilling and completing the well. The Supreme Court reversed an Industrial Commission order authorizing Slawson Exploration Company to assess a 200 percent risk penalty against Gadeco, LLC, for failing to accept Slawson's invitation to participate in the well within 30 days, and remanded to the Commission to explain its decision. On remand, the Commission determined Slawson's invitation to Gadeco to participate in the well complied with regulatory requirements and authorized Slawson to assess a 200 percent risk penalty against Gadeco. Gadeco appealed the district court judgment affirming the Industrial Commission's order on remand. The district court reversed the Commission's decision holding that, after sending the July 8, 2009 invitation to participate, Slawson changed three of the five requirements for an invitation, The court determined the changed facts required that Slawson provide Gadeco with a new invitation to participate. The Commission again authorized Slawson to assess a 200 percent risk penalty against Gadeco, ruling Slawson's invitation to participate complied with the regulatory requirements for a valid invitation to participate and Gadeco failed to accept the invitation within 30 days of receipt. The district court affirmed the Commission's order, concluding its "findings and conclusions are sustained by the law and by substantial and credible evidence." The Supreme Court nevertheless concluded that the Commission has discretion and administrative expertise to evaluate compliance with the requirements for an invitation to participate. The Commission therefore did not err in construing the language in the regulation to require Gadeco's election to participate to be received by Slawson within 30 days of Gadeco's receipt of the invitation and in authorizing Slawson to assess the risk penalty against Gadeco.View "Gadeco v. Industrial Commission" on Justia Law

Defendants The Pantry, Inc., and Herndon Oil Corporation appealed a judgment entered on a jury verdict in favor of plaintiffs Kaycee Mosley and Alana Byrd. The appeals primarily concerned whether Kaycee and Alana's mother, Murel Mosley, unreasonably withheld consent to Herndon Oil's assignment of a lease between Murel and Herndon Oil. Upon review of the matter, the Supreme Court reversed the judgment and remanded the case, concluding that Murel unreasonably withheld consent to the assignment of the lease from Herndon Oil to The Pantry. Thus, Herndon Oil had the right under the lease agreement to assign the lease to The Pantry despite Murel's failure to consent. Furthermore, neither Herndon Oil nor The Pantry could be liable on a conversion claim.View "The Pantry, Inc. v. Mosley" on Justia Law

The Kentucky Energy and Environment Cabinet denied Kentucky Southern Coal Corporation's (KSCC) application to renew its surface and underground coal mining permit, finding that a bona fide dispute existed over KSCC's right of entry to 18.1 acres within the permit boundaries. The circuit court affirmed the Cabinet's decision, finding that the expiration of a surface lease adjudicated by another circuit court created a bona fide dispute over the rights of KSCC to mine the coal on the 18.1-acre tract. The court of appeals affirmed. The Supreme Court affirmed, holding (1) a bona fide property dispute existed in this case, which the Cabinet had no legal authority to adjudicate; and (2) accordingly, the Cabinet did not err in denying KSCC's renewal permit.View "Ky. S. Coal Corp. v. Ky. Energy & Env't Cabinet" on Justia Law

The issue before the Supreme Court in this case centered on whether a deed executed in 1881 reserving the subsurface and removal rights of "one half of the minerals and petroleum oils" in the grantor included any natural gas contained within the shale formation beneath the subject land. The trial court, relying on the 1882 Supreme Court decision "Dunham & Shortt v. Kirkpatrick," (101 Pa. 36 (Pa. 1882)) and its progeny, held that because the deed reservation did not specifically reference natural gas, any natural gas found within the Marcellus Shale beneath the subject land was not intended by the executing parties to the deed to be encompassed within the reservation. The Superior Court reversed that decision and remanded the case with instructions to hold an evidentiary hearing complete with expert, scientific testimony to examine whether: (1) the gas contained within the Marcellus Shale was "conventional natural gas"; (2) Marcellus shale was a "mineral"; and (3) the entity that owns the rights to the shale found beneath the property also owns the rights to the gas contained within that shale. Upon review, the Supreme Court reversed, finding that the Superior Court erred in ordering the remand for an evidentiary hearing and reinstated the order of the trial court. View "Butler v. Charles Powers Estate" on Justia Law

A fire destroyed a hydroponic tomato facility belonging to a new business, Sunnyland Farms, Inc. The day before the fire, Sunnyland's electricity had been shut off by its local utility, the Central New Mexico Electrical Cooperative (CNMEC), for nonpayment. Sunnyland's water pumps were powered by electricity, and without power, Sunnyland's facility had no water. Sunnyland sued CNMEC, alleging both that CNMEC had wrongfully suspended service, and if its electrical service had been in place, firefighters and Sunnyland employees would have been able to stop the fire from consuming the facility. After a bench trial, the court found CNMEC liable for negligence and breach of contract. The trial court awarded damages, including lost profits, of over $21 million in contract and tort, but reduced the tort damages by 80% for Sunnyland's comparative fault. It also awarded $100,000 in punitive damages. The parties cross-appealed to the Court of Appeals, which reversed the contract judgment, vacated the punitive damages, held that the lost profit damages were not supported by sufficient evidence, affirmed the trial court's offset of damages based on CNMEC's purchase of a subrogation lien, and affirmed the trial court's rulings on pre- and post-judgment interest. Sunnyland appealed. Upon review, the Supreme Court affirmed the Court of Appeals regarding the contract judgment, punitive damages, and interest, and reversed on the lost profit damages and the offset. The Court also took the opportunity of this case to re-examine the standard for consequential contract damages in New Mexico. View "Sunnyland Farms, Inc. v. Central N.M. Electric Cooperative, Inc." on Justia Law

The issue presented to the Supreme Court in this case was the appeal of a final order of the Energy Facility Siting Council that approved an amended site certificate for construction of a wind energy facility. Specifically, the issue was whether, in approving the amended site certificate, the council correctly declined to require compliance with a recently adopted county ordinance requiring a two-mile setback between wind turbines and rural residences pursuant to ORS 469.401(2). Upon review, the Supreme Court concluded that the council did not err in not requiring compliance with the ordinance. Furthermore, the Court concluded that the council did not err in denying petitioners' requests for a contested case proceeding. Therefore the council's final order approving the amended site certificate was affirmed.View "Blue Mountain Alliance v. Energy Facility Siting" on Justia Law