Yesterday, in discussing the Pennsylvania Supreme Court’s grant of review in Butler v. Estate of Powers, we suggested that maybe it was time to do away with the rebuttable presumption that the owner of “mineral rights” does not own rights in a property’s natural gas stores and instead make it a firm rule of law, particularly in light of the fact that the presumption has been around for over a century.    Well, last week, this is exactly the step that the Supreme Court of Arkansas took in Staggs v, Union Pacific RR Co., 2012 Ark. 156 (Apr. 12, 2012), although holding that “mineral rights” do include oil and gas rights.  Read More »

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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

For the past year, the natural gas industry was hopeful that 2012 could be the year that Marcellus Shale natural gas production in New York could finally begin in earnest.  Governor Paterson’s Executive Order No. 41, which effectively banned the use of high volume hydraulic fracturing and horizontal drilling necessary to extract natural gas from the Marcellus Shale, expired in 2011.  During the moratorium the state moved forward with its efforts to establish a regulatory and permitting framework that would allow for Marcellus Shale development in New York.  New York’s Department of Environmental Conservation (“DEC”) issued for public comment preliminary and revised draft Generic Environmental Impact Statements that recommended lifting the moratorium on Marcellus Shale development.  In addition, DEC issued a set of proposed regulations applicable to high-volume hydraulic fracturing in 2011.  With the  comment period on the regulations closing on January 11, 2012, industry hoped that the administrative and regulatory hurdles holding back Marcellus Shale development in New York would soon be gone.  Read More »

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Much attention has been paid recently to the terms of oil and gas leases in light of the increasing exploration and production activity in the Marcellus Shale region.  But in other parts of the country, particularly Texas and Oklahoma, oil and gas royalties are old hat.  Which may be why, in a December 16, 2011 decision, the Supreme Court of Texas held that a lessor of gas rights was barred by the statute of limitations from recovering underpayments made by Shell Oil Company – which had unabashedly admitted at trial that it had underpaid the plaintiff’s predecessor-in-interest for at least 3 years, and possibly ten years, and that in doing so it had breached its contract. Read More »

Share | Email| Comments|  Topics: Breach of Contract, Leases, Marcellus Shale, Oil and Gas, Statute of Limitations, Tolling

In one of the first lawsuits seeking personal injuries and medical monitoring in connection with natural gas drilling in the Marcellus Shale – one of the largest and most recent natural gas plays in North America – the first blow has been dealt to the plaintiffs, who have been ordered by a Special Master tasked with overseeing discovery to produce all of their medical records to the defendants. Read More »

Share | Email| Comments|  Topics: Cases to Watch, Class Actions, Decisions of Note, Dimock, Marcellus Shale, Medical Monitoring, Oil and Gas, Toxic Torts

MGKF litigator Chris Ball recently considered this issue in an article published in The Legal Intelligencer. You can drill into what he had to say here.

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On September 7, 2011, the Pennsylvania Superior Court issued its decision in Butler v. Estate of Powers, 2011 Pa Super 198, sending the case back to the trial court to decide, in short, who owns the natural gas in the Marcellus Shale formation — the owner of the mineral rights, or the owner of the oil and gas rights. Read More »

Share | Email| Comments|  Topics: Cases to Watch, Deeds, Leases, Marcellus Shale, Mineral Rights, Oil and Gas, Real Estate

Last fall we wrote about the decision in Butler v. Estate of Powers in which the Pennsylvania Superior Court appeared to overturn more than 100 years of case law to cast doubt on whether the natural gas found in shale is a “mineral” for purposes of deed interpretation.  We called it a “Case to Watch,” and it looks like we were right because earlier this month the Pennsylvania Supreme Court agreed to hear the case. Read More »

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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 »

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