Justia West Virginia Supreme Court of Appeals Opinion SummariesArticles Posted in Energy, Oil & Gas Law
SWN Production Co., LLC v. Kellam
The Supreme Court answered certified questions seeking to clarify whether, in payment of royalties under an oil and gas lease, the lessor may be required to bear a portion of the post-production costs incurred in rendering the oil and gas marketable.Specifically, the district court asked whether Estate of Tawyne v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (W. Va. 2006) is still good law in West Virginia and then asked the Supreme Court to expound upon its holding in Tawney. The Supreme Court answered (1) Tawney is still good law; and (2) this Court defines to answer the reformulated question of what level of specificity Tawney requires of an oil and gas lease to permit the deduction of post-production costs from a lessor's royalty payments. View "SWN Production Co., LLC v. Kellam" on Justia Law
Orville Young, LLC v. Bonacci
The Supreme Court affirmed the summary and declaratory judgment order of the circuit court determining that Frank Bonacci and Brian Bonacci (together, the Bonacci brothers) were the owners of an undivided and unsevered oil and gas estate, holding that there was no error.The circuit court's order found that the Bonacci brothers were the owners of the undivided oil and gas estate at issue because the tax deeds through which Petitioners, two Florida limited liability companies, had allegedly obtained title to the same mineral estate were void. Petitioners appealed, arguing that the circuit court erred in concluding that the underlying tax deeds were void. The Supreme Court affirmed, holding that the tax deeds were void and conveyed no interest in the oil and gas estate underlying the surface panel now owned by the Bonacci brothers. View "Orville Young, LLC v. Bonacci" on Justia Law
Smith v. Chestnut Ridge Storage, LLC
The Supreme Court reversed the order of the circuit court denying Petitioners' motion for summary judgment, holding that Petitioners were immune from Respondent's lawsuit pursuant to the litigation privilege and the Noerr-Pennington doctrine.Petitioners executed an oil and gas lease to a company that assigned 2,300 acres of Petitioners' tract to Respondent for a storage project. Respondent then applied to FERC for a certificate of public convenience and necessity to construct and operate a storage field. Petitioners intervened in the FERC proceeding. FERC eventually granted Respondent's request. When Respondent did not complete construction of the storage facility within the required amount of time it sought a three-year extension. Petitioners opposed the extension, and FERC denied Respondent's request to extend the timeframe. Thereafter, Petitioners filed suit against Respondent alleging breach of contract and seeking declaratory judgment. Respondent filed a counterclaim alleging, inter alia, breach of contract. Petitioners filed a motion for summary judgment, asserting that they were immune from suit pursuant to the litigation privilege and the Noerr-Pennington doctrine. The circuit court denied the motion. The Supreme Court reversed, holding that the litigation privilege and Noerr-Pennington doctrine provided Petitioners with immunity from all of Respondent's counterclaims. View "Smith v. Chestnut Ridge Storage, LLC" on Justia Law
Ascent Resources – Marcellus, LLC v. Huffman
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
EQT Production Co. v. Antero Resources Corp.
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
Bison Interests, LLC, v. Antero Resources Corp.
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
SWN Production Co., LLC. v. Conley
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
Posted in: Energy, Oil & Gas Law
Northeast Natural Energy LLC v. Pachira Energy LLC
The Supreme Court affirmed the decision of the circuit court granting a preliminary injunction, holding that the court did not err when it found Plaintiff had a likelihood of succeeding on the merits of its claims and was likely to suffer irreparable harm in the absence of action by the court.Pachira Energy LLC entered into an agreement with Northeast Natural Energy LLC establishing the Blacksville Area of Mutual Interest (Blacksville AMI) and setting forth guidelines for exploiting oil and gas leases and other mineral interests. Pachira later filed a complaint against Northeast Natural Energy LLC alleging that Northeast was breaching various agreements and was abusing its power to benefit itself, to the detriment of Pachira. Among other requests for relief, Pachira sought a permanent injunction stop Northeast's use of a jointly-owned water system within the Blacksville AMI to support Northeast's drilling operations outside the Blacksville AMI and to sell water to third parties outside the Blacksville AMI. The circuit court granted Pachira's motion for a preliminary injunction. The Supreme Court affirmed, holding that it was fair for the circuit court to preserve the status quo until the parties' resolve the merits of their dispute and that there was no error in the preliminary injunction order. View "Northeast Natural Energy LLC v. Pachira Energy LLC" on Justia Law
U.S. Exploration, LLC v. Griffin Producing Co.
In a dispute over ownership of certain oil and gas leases and royalty interests the Supreme Court affirmed the judgment of the circuit court granting partial summary judgment for Plaintiff and concluded that an unrecorded assignment of leasehold interests to Defendant did not defeat a subsequent modification and surrender of those same interests to Plaintiff, holding that the circuit court did not err.Specifically, the circuit court concluded that an unrecorded assignment of leasehold interests to Defendant U.S. Exploration, LLC did not defeat a subsequent modification and surrender of those same interests to Plaintiff Griffin Producing Company. The Supreme Court affirmed, holding that the circuit court did not err in concluding that the assignment and surrender from Magnum Oil Corporation to Griffin Producing Company “were valid documents that transferred title in the subject overriding royalty interests and surrendered the subject leasehold estates as of the time of their recording.” View "U.S. Exploration, LLC v. Griffin Producing Co." on Justia Law
Posted in: Energy, Oil & Gas Law
Andrews v. Antero Resources Corp.
In this ongoing Marcellus shale litigation arising that arose from claims asserted by Plaintiffs - surface owners of several tracts of land - the Supreme Court affirmed the order of the Mass Litigation Panel (MLP) granting summary judgment in favor of Defendants - the leaseholder of the gas and oil estates and the company who was conducting the drilling - holding that there were no genuine issues of material fact precluding summary judgment.Plaintiffs alleged that their use and enjoyment of their land was being improperly and substantially burdened by horizontal wells being used to develop the Marcellus shale underlying their properties even where the wells were not physically located on Plaintiffs' properties. In granting summary judgment for Defendants the MLP concluded that the effects on the surface owners resulting from the horizontal drilling were within the implied rights to use the surface granted by virtue of the relevant severance deeds and did not impose a substantial burden on the surface owners. The Supreme Court affirmed, holding that Plaintiffs failed to establish the existence of a genuine issue of material fact as to whether the effects on their surface estates were reasonably necessary to develop the mineral estate or whether they were being substantially burdened by Defendants' activities. View "Andrews v. Antero Resources Corp." on Justia Law