Justia Energy, Oil & Gas Law Opinion Summaries

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The Supreme Court affirmed the order of the circuit court denying the motion filed by Plaintiff, an oil and gas drilling company, for summary judgment and denying Plaintiff a favorable declaratory judgment, holding that the circuit court did not err in refusing to imply into an existing oil and gas lease a covenant to pool and unitize the lease with nearby mineral estates.Plaintiff brought this action seeking a declaration that the oil and gas lease at issue contained an implied covenant to pool or unitize the lease with other mineral interests. The circuit court rejected Plaintiff's request for a declaratory judgment, holding that the circuit court correctly concluded that there can be no implied covenant to pool or unitize in the absence of language in the lease showing the parties contemplated that a lessor has a right to pool and unitize the lease with other estates. View "Ascent Resources - Marcellus, LLC v. Huffman" on Justia Law

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Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law

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The Fourth Circuit granted Ergon's petition for review of the EPA's decision denying Ergon's petition to be exempt from the EPA's administration of a renewable fuel standard program. The court previously vacated and remanded the EPA's denial as arbitrary and capricious. On remand, the EPA denied Ergon's petition again. In this appeal, Ergon argues that the EPA repeated the errors the court previously identified in Ergon I by again relying on the DOE's facially deficient scoring metrics to deny the petition.The court reviewed the record and concluded that, although the EPA's post-remand decision largely cured the problems the court previously identified, Ergon has provided sufficient evidence undermining one aspect of the EPA's decision. In this case, part of the EPA's basis for accepting the DOE's reasoning as to Section 1(b) of the DOE's Scoring Matrix has been reliably called into question, and thus the EPA's decision was arbitrary and capricious. Because of the threshold problem with the rationale provided for the Section 1(b) scoring, the court did not reach the secondary issue regarding the apparently contradictory definitions of "refinery" used in Section 1(b) and 2(a). Accordingly, the court vacated and remanded for further proceedings. View "Ergon-West Virginia, Inc. v. Environmental Protection Agency" on Justia Law

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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

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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

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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

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The First Circuit affirmed the order of the federal district court allowing Rhode Island's motion to return to state court its state court complaint against several oil and gas companies for damage caused by fossil fuels, holding that the allegations in Rhode Island's complaint did not give rise to federal-officer jurisdiction.In 2018, faced with rising sea levels and other property damage from extreme weather events caused by climate change, Rhode Island sued, in state court, several oil and gas companies for damage caused by fossil fuels while those companies misled the public about their products' true risks. The oil companies removed the case to federal district court. Rhode Island moved for the case to be remanded to state court. The district court granted the motion and ordered the case remanded to state court. The First Circuit affirmed, holding that the district court did not err in finding that there was no subject matter jurisdiction under the federal-officer removal statute. View "State of Rhode Island v. Shell Oil Products Co., LLC" on Justia Law

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The Supreme Court answered two of three questions of state law certified by the United States Court of Appeals for the First Circuit and declined to answer the second question in this case brought about by the City of South Portland's amendment to its zoning ordinance by prohibiting the bulk loading of crude oil onto any marine vessel.Portland Pipe Line Corporation (PPLC) planned to pipe crude oil from its facility in Canada to the City of South Portland, where the oil would then be loaded onto tankers in the City's harbor. After the City enacted its ordinance at issue, called the "Clear Skies Ordinance," PPLC and American Waterways Operators (collectively, PPLC) filed a complaint seeking a declaration that, inter alia, the Ordinance was preempted by Me. Rev. Stat. 38, 556. The federal district court entered summary judgment against PPLC. On appeal, the First Circuit certified questions of state law to the Supreme Court. The Supreme Court held (1) PPLC's license was not an "order," as that term is used in Me. Rev. Stat. 38, 556; and (2) independent of section 556, there was no basis for finding that Maine's Coastal Conveyance Act impliedly preempts the City's Clear Skies Ordinance. View "Portland Pipe Line Corp. v. City of South Portland" on Justia Law

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Robert Hall appealed a judgment entered in favor of the defendants Estate of John Hall, Deborah Hall, and Leslie Hall Butzer ("Hall defendants") in this action to quiet title to a non-participating royalty interest (NPRI) in certain real property. The North Dakota Supreme Court concluded the district court did not abuse its discretion in vacating a default judgment against John Hall. However, because res judicata did not bar Robert Hall’s claims, the court erred in granting summary judgment to the Hall defendants. The matter was therefore affirmed in part, reversed in part, and remanded for further proceedings. View "Hall v. Hall, et al." on Justia Law

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This dispute involved ad valorem taxes for the tax years 2013 through 2016. In October 2012, D90 Energy, LLC, purchased two gas wells and one saltwater disposal well. The wells were subject to ad valorem property taxation in Jefferson Davis Parish, Louisiana. Relying on a Commission regulation applicable to oil and gas wells, D90 argued that a purchase price in a valid sale is fair market value; therefore, the wells should be valued at $100,000.00 for each of these tax years. For each tax year, the Assessor rejected D90’s documentation of the sale, explaining, in part, that his office never uses the sales price as fair market value for oil and gas wells. Rather, the Assessor used valuation tables provided by the Commission, which take into account age, depth, type, and production of the wells. D90 appealed each assessment to the Commission, presenting documentary evidence and live testimony to establish the $100,000.00 purchase price for the wells and the arms-length nature of the sale. It presented additional evidence to establish that the condition and value of the wells were virtually identical for each tax year. The district court affirmed the Commission’s valuations for all four tax years. Reviewing only what was presented to the Assessor, the court of appeal reversed the district court and reinstated the Assessor’s valuation. The Louisiana Supreme Court granted D90’s writ application to determine the correctness of the assessments, the proper scope and standard of review, and the legal effect of D90’s failure to pay taxes under protest. After review, the Court determined the district court was correct in affirming the Commission, thus reversing the appellate court's judgment. View "D90 Energy, LLC v. Jefferson Davis Parish Board of Review" on Justia Law