In a precedential decision issued by the Third Circuit Court of Appeals in the case of Vodenichar v. Halcon Energy Properties, Inc., No. 13-2812 (Aug. 16, 2013), the Court addressed the two exceptions to the Class Action Fairness Act that permits remand to state courts of class action complaints over which the federal courts would otherwise have jurisdiction.  First, the Court provided guidance as to the interpretation of the term “primary defendants” for the purposes of 28 U.S.C. § 1332(d)(4)(B) and, second, held that the “other class action” language of 28 U.S.C. § 1332(d)(4)(A) was not intended to encompass prior actions between the same parties where the procedural history indicates that the second suit was merely a continuation of the prior suit. Read More »

Share | Email| Comments|  Topics: Breach of Contract, CAFA, Class Actions, Drilling, Exploration, Federal Procedure, Leases, Oil and Gas, Pennsylvania, Real Estate, Royalties, Subject Matter Jurisdiction, Third Circuit

Some may be surprised to learn that the storage and production of natural gas do not always complement one another.  A conflict can occur when one gas company stores its gas by injecting it back into the ground, typically into a depleted gas field.  So long as gas pressure can be maintained underground, the depleted field provides a natural reservoir for storing gas.  If areas of low pressure are created near the storage area, the stored gas tends to migrate toward these areas. The drilling for and extraction of natural gas can create such low pressure zones.  Effectively, production activities near an underground storage area suck the gas away from where it is being stored. Read More »

Share | Email| Comments|  Topics: Drilling, Exploration, Marcellus Shale, Natural Gas, Nuisance, Oil and Gas, Storage

The Delaware River Basin Commission (“DRBC”) was created with the approval of Congress in 1961 through the Delaware River Basin Compact, an agreement between the New York, Pennsylvania, New Jersey, Delaware, and the federal government for planning, conservation, utilization, development, management and control of the water resources of the Delaware River Basin (the “Basin”).  In June, 2010, the DRBC placed  a moratorium on natural gas development in the Basin, which includes areas within the Marcellus Shale formation, pending the adoption of regulations governing such development.  Draft regulations were published for comment in 2010, and revised draft regulations were published in November, 2011.  However, they have not yet been adopted by the DRBC, leaving the moratorium in place. Read More »

Share | Email| Comments|  Topics: Cases to Watch, Decisions of Note, Drilling, Exploration, Marcellus Shale, NEPA, Oil and Gas, Standing

In April, we reported on an Arkansas Supreme Court case which held that, at least as of 1934, the term “mineral rights” included oil and gas as a matter of law.  But what about deeds of an older vintage?  Last week, the Arkansas Supreme Court, inNicholson v. Upland Industrial Development Co., 2012 Ark. 326 (Sept. 13, 2012), ruled that a 1903 deed reserving “mineral rights” included oil and gas rights because at the time of the deed and in the general region where the deed was executed, that was the common understanding.  In other words, the per se rule announced in Staggs v, Union Pacific RR Co.* did not apply. Read More »

Share | Email| Comments|  Topics: Arkansas, Deeds, Drilling, Exploration, Leases, Mineral Rights, Oil and Gas, Procedure, Real Estate

One of the very first things I was told by the senior partner when I started practicing law was that there isn’t an honest mistake that can’t be fixed, except blowing the statute of limitations. As a result, my calendar has limitations periods blocked out weeks, months and in some cases years in advance, and if there’s ever a question of when it runs, I use the earliest date. The Tenth Circuit’s decision in Impact Energy Resources, LLC v. Salazar, Nos. 11-4043 & 11-4057 (Sept. 5, 2012 10^th Cir.), is a cautionary tale to those who may not be as conservative. Read More »

Share | Email| Comments|  Topics: Administrative Procedures Act, Cases to Watch, Exploration, Federal Procedure, Interior, Leases, Mineral Leasing Act, Oil and Gas, Procedure, Public Lands, Statute of Limitations, Tenth Circuit, Tolling

As we reported previously, recent exploration and production in the Marcellus Shale has forced Pennsylvania courts to address interpretation of oil and gas leases which may be over 100 years old, relying on cases that are similarly over 100 years old, and to harmonize or reject those cases as they impact the people and property in the 21^stcentury.  On March 26, the Pennsylvania Supreme Court attempted to do just that in T.W. Phillips Gas and Oil Co. v. Jedlicka, No. 19 WAP 2009 (Mar. 26, 2012).  The case involved a 1926 oil and gas lease which provided, in relevant part, that the lease would continue for “as long . . . as oil or gas is produced in paying quantities” and required interpretation of the term “in paying quantities.”  Read More »

Share | Email| Comments|  Topics: Decisions of Note, Drilling, Exploration, Leases, Marcellus Shale, Oil and Gas, Pennsylvania, Real Estate, Royalties

On January 4, 2011, the Pennsylvania Superior Court issued its opinion in Hite v. Falcon Partners, No. 197 WDA 2010, 2011 PA Super 2, holding that productive activities at premises leased for oil and gas activity were essential for the lessee to retain control of the property after the primary lease period, even though the oil and gas lease provided for an indefinite extension of the lease upon the payment of small delay rental payments. Relying on long-standing case law, the Court determined that despite the “unusual” wording of the lease at issue, the equitable principles that require such leases to be interpreted to promote development of the land and resources for the benefit of both the lessor and the lessee remained paramount. Importantly, though, both the lower court and the Superior Court left a slight opening for lessees. The trial court opined that an indefinite period for exploration was not completely foreclosed to lessees, but that the lease language must be “clear and unequivocal.” Similarly, the Superior Court noted that a lessee who wished to preserve exploration rights could enter into a lease with a significantly longer primary term. Read More »

Share | Email| Comments|  Topics: Decisions of Note, Drilling, Exploration, Leases, Oil and Gas, Real Estate, Royalties