Giving the Pennsylvania Supreme Court’s Kilmer decision broad construction, Judge William Stickman of the District Court for the Western District of Pennsylvania granted the lessees’ motion to dismiss and issued a decision affirming that royalty language containing the phrase “at the wellhead” permits the lessee to use the net-back method and deduct post-production expenses. Rejecting the lessor’s argument that Kilmer should be limited to cases involving Pennsylvania’s Guaranteed Minimum Royalty Act, the court concluded that “Kilmer cannot be read so narrowly as to ignore the fact that it interpreted ‘at the wellhead’ language in leases as providing for the use of the net-back method.”
In a six-to-one decision, the Pennsylvania Supreme Court reversed the lower courts and held that a decision finding an oil and gas lease to be abandoned pursuant to the equitable doctrine of abandonment was improper where the lease provided remedies for the allegedly-wrongful conduct of the lessee.
In a decision issued March 24, 2021, all seven of Pennsylvania’s Supreme Court justices agreed (in a split decision) that Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) can be enforced only against sellers. In so concluding, the six-justice majority then determined that oil and gas companies are not “sellers” under the UTPCPL when they acquire oil and gas leases from property owners. Continue Reading Pennsylvania’s UTPCPL does not apply to acquiring oil and gas leases from property owner
Winter Storm Uri left millions in Texas without electricity and water in mid-February 2021, opening up threats of mass litigation. Texans seek to hold the state’s primary grid operator, Electric Reliability Council of Texas (ERCOT) and electricity retailers liable. Among the litigation is a $100 million suit brought by family members of an 11-year-old boy and 95-year-old man who both froze to death during the storm. Additionally, a class action suit against ERCOT alleging gross negligence has been filed in Harris County, Texas. More litigation is likely forthcoming as experts predict an avalanche of insurance claims. But should potential Texan defendants be shaking in their cowboy boots? Generally, no, as the current state of the law shows potential defendants may be protected from mass litigation.
Recent decisions issued by the Ohio Supreme Court have provided reminders that there are meaningful limits to the jurisdiction and powers of the Public Utilities Commission of Ohio (PUCO) and other state agencies. Those challenging the final orders and decisions of Ohio’s various state commissions and agencies often find themselves facing a steep uphill climb. In addition to demonstrating prejudicial error, such challengers face entrenched doctrines of judicial deference to agency decision-making.
Porter Wright has provided advice and industry insight to our energy clients and to the broader community for decades. In order to accurately reflect the scope of our experience and capabilities, and to continue to provide the latest energy-related updates and information in an easily accessible way, we have expanded and relaunched our Oil & Gas Law Report blog as the Energy Law Report.
The Ohio Supreme Court has finally put to rest a long-standing debate about whether Ohio’s Marketable Title Act (MTA), Dormant Mineral Act (DMA), or both, may be applied to reunite severed mineral interests with the overlying surface estate. In a majority opinion decided Dec. 2, 2020, the court held that both acts may be independently applied to mineral estates. The court held, “The Marketable Title Act and the Dormant Mineral Act afford independent procedures, either of which may be used to effect the termination of a severed mineral interest, depending on the circumstances of the case and the time that has elapsed.” West v. Bode, 2020-Ohio-5473, ¶ 44.
Ohio landowners and holders of mineral interests should soon receive clarification regarding certain mineral rights. On Sept. 1, 2020, the Supreme Court of Ohio accepted Fonzi v. Brown for review, a case involving the Ohio Dormant Mineral Act (ODMA). Fonzi joins Gerrity v. Chervenak and West v. Bode, as the third major case on the court’s docket that raises questions about the ODMA and/or Marketable Title Act (MTA).
The Ohio Department of Natural Resources – Division of Oil & Gas Resources Management (DOGRM) recently revised its rules governing spacing of horizontal oil and gas production wells. The new rules, which became effective on Oct. 10, 2019, will bring Ohio’s horizontal well spacing regulations in line with what accepted science and drilling data indicates is a more efficient and productive spacing for horizontal wells in Ohio.
Under the prior version of Ohio Administrative Code §1501:9-1-04, which applied to both conventional and horizontal wells, any oil and gas production well drilled into a pool located at least 4,000 feet in depth must be set back at least 500 feet from the boundary of the leased tract or drilling unit. That prior version of the rule also required a spacing of at least 1,000 feet between wells producing from the same pool. Continue Reading New Ohio regulations reduce minimum spacing requirements for horizontal oil and gas wells