In the Tennant v. Range Res. Appalachia decision issued on Sept. 21, 2021, Judge Hardy of the Western District of Pennsylvania determined that unless an oil and gas lease expressly shifted the burden to the defendant lessee, the plaintiff lessors bore the burden of proof on their claim of underpaid royalties.
Continue Reading Plaintiff lessors bear burden of proof in royalty breach claim

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.”
Continue Reading “At the wellhead” royalty language authorizes net-back method in Pennsylvania

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.
Continue Reading Pennsylvania Supreme Court holds abandonment analysis improper where oil and gas lease provided remedies for conduct at issue

Recently, the United States District Court for the Western District of Pennsylvania relied on the statute of limitations to dismiss claims related to allegedly improper transactions involving real estate. Although the statute of limitations is an affirmative defense, it can be asserted in a motion to dismiss if the defense clearly appears on the face of the complaint and the complaint demonstrates that the claims were filed beyond the applicable time period.
Continue Reading Court holds recording of deeds starts statute of limitations running

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

Ohio law requires oil and gas operators to report prior year production from oil and gas wells on an annual basis — by March 31 of the following year. The Ohio Department of Natural Resources (ODNR) recently unveiled the 2012 production results from Ohio’s Utica shale play. These figures have been much anticipated by investors, land owners and the oil and gas industry, who are all trying to glean insights about the most productive areas and the overall potential of the play.

First, a Look Back at 2011

The first production from Ohio’s Utica Shale was realized in 2011 and reported on March 31, 2012. That data showed that merely nine Utica wells were in production during some part of 2011 — all drilled by Chesapeake Appalachian, LLC. Six of those wells were located in Carroll County. The remaining data came from wells in Portage, Harrison and Mahoning counties.

Though none of those nine wells were in production for all of 2011 (all but two were in production for less than six months), combined they still produced 2.56 billion cubic feet of natural gas and 46,326 barrels of oil, which amounted to 3.5% of the state’s overall gas production and 1% of oil production for that year. These are impressive statistics considering that Ohio had more than 50,000 conventional (vertical) wells reporting production in 2011.
Continue Reading ODNR Releases 2012 Utica Shale Production Results

The disposal of wastes associated with oil and gas production continues to draw the attention of regulators and concerned citizens. In a series of articles we will examine the waste issue from the characterization of these wastes (discussed below) and their ultimate disposal in underground injection wells.

A Brief History of Waste Management and RCRA

By the 1960s it was becoming clear that the country had a waste management problem. The only modern environmental law on the books at the time was the Clean Air Act. So the Solid Waste Disposal Act of 1965 was enacted as an amendment to the air law. This initial foray into comprehensive waste regulation proved inadequate in many respects.  The treatment, storage and disposal of waste — even defining what a waste is — is complicated, especially when recycling is considered.

The modern regulation of solid and hazardous waste can be traced to 1976 with the enactment of the Resource Conservation and Recovery Act (RCRA). Generally, when looking at the world through the lens of RCRA, all material is either a product or a solid waste. A subcategory of solid waste is hazardous waste that is regulated under Subtitle C of RCRA.
Continue Reading Management of Oil Field Wastes

The Ohio shale boom started slowly when a few small companies quietly began acquiring mineral leases for as little as $25 per acre.  This soon gave way to a full blown land rush in the fall of 2010.  But as lease prices skyrocketed through the Fall of 2011, disillusioned lessors who signed before the peak of the market were the ones rushing – to the courthouse to file lawsuits to cancel their leases.

In order to gain leverage and legitimize their lawsuit, lessors frequently allege that their lease is “unconscionable” or they were fraudulently induced to sign it.  “Exhibit A” to these lawsuits is often a technical error in the lease signing or a “fraudulent” statement made by a landman.  There are exceptions, but many of these kinds of lawsuits have no legal basis.Continue Reading Lawsuits Over “Fraudulent” Oil & Gas Leases Often Lack Merit