In 2023, the US oil and gas industry witnessed significant legal developments that highlight the importance of careful drafting. This recap, together with my prior analysis, captures some of the pivotal case law that defined...more
Let’s assume you own 95 acres in Greene County, Pennsylvania. In 2019, you signed an oil and gas lease with ABC Exploration. During the negotiations, you agreed that only those post-production costs which actually...more
Before signing oil and gas leases, landowners should pay close attention to lease provisions asking for warranties and representations about prior oil and gas development on the land. These provisions are often buried in a...more
This is a familiar yet troubling question. Imagine you own 135 acres in Washington County. You have received offers from several oil and gas drillers but have not yet signed a lease. Your neighbor, however, did sign a lease...more
As we have written about before, a troubling issue facing landowners in the Marcellus Shale region is the practice of retroactive pooling and unitization. Retroactive pooling and unitization occurs when a driller records an...more
Let’s assume you own 125 acres in Greene County, Pennsylvania. A landman from XYZ Gas Co. approaches you about a new oil and gas lease. The lease purports to grant XYZ Gas Co. exclusive drilling rights to the Marcellus...more
Many Pennsylvania oil and gas leases have what is commonly known as a “market enhancement” royalty clause (“MEC”). These MEC leases typically prohibit the deduction of any post-production costs that are incurred transforming...more
Many Pennsylvania landowners have leases with “market enhancement” royalty clauses. These clauses typically prohibit the deduction of any post-production costs that are incurred transforming the gas into marketable form. Once...more
Let’s assume you own a 93-acre farm in Tioga County. In 1986 your grandfather sold the oil and gas rights to his neighbor, John Mize. In the early 1990’s, Mr. Mize signed an oil and gas lease with XYZ Drilling. Several years...more
Let’s assume that you own 125 acres in Tioga County. In 2017, you negotiate a new oil and gas lease with XYZ Drilling. During the negotiations, you insist on a “gross royalty” which prohibits the deduction of...more
Variations in How States Treat Oil & Gas Leases Make Dispositions Complicated - Ability of a debtor to assume, assign, or reject oil and gas “leases” under section 365 of the Bankruptcy Code - Section 365(a) of the...more
Scribner v. Wineinger, et al. affirms that acquisition of a Texas oil and gas leasehold by limitations is not defeated if the adverse possessor’s acknowledgement of a claimant’s title comes too late....more
On March 19, 2019, the Alberta Court of Queen's Bench (ABQB) ruled in Karve Energy Inc. v Drylander Ranch Ltd., 2019 ABQB 298 that the Surface Rights Board (Board) does not have the authority to interfere with the amount of...more
On September 7, 2018 the Bureau of Land Management’s (BLM) third-quarter oil and gas lease sale in New Mexico broke all previous records for BLM lease sales across the country, generating $972.48 million in bonus bids for 142...more
Action Item: Lessees of oil and gas leases in Pennsylvania who have been assigned or are assigning less than all of the geologic strata under lease should give careful attention to whether those leases have been severed...more
On September 21, 2015, the North Dakota Supreme Court found that a fiduciary relationship between an oil company and its landman could exist depending upon the existence of a confidential relationship. Irish Oil...more
Riddle: What’s the difference between a hydrocarbon molecule and the underground structure which the molecule inhabits? Answer: In Texas, you can own one and not the other, according to Lightning Oil Co. v. Anadarko E&P...more
Have you ever wondered about the original purpose of the retained acreage clause? According to Professor Kramer, it was “to prevent the lessee from losing those portions of a lease that had productive wells thereon if the...more
On January 6, 2015, the Department of the Interior’s Office of Natural Resources Revenue (“ONRR”) issued a proposed regulation that would substantially modify existing regulations in 30 C.F.R. Part 1206 for the valuation for...more
Monday, November 17, 2014, is the last day to provide comments to the Bureau of Ocean Energy Management (BOEM) in connection with its Advance Notice of Proposed Rulemaking (ANPR) with respect to risk management, financial...more
In a recent decision, the Supreme Court of Texas concluded that the cost of removing carbon dioxide (“CO2”) from casinghead gas after completing enhanced oil recovery operations is a “post-production” cost, thus clarifying...more
A recent agreement between environmentalists and the Bureau of Land Management (BLM) may open the floodgates to challenges of the sufficiency of Environmental Assessments (EA) or Environmental Impact Statements (EIS) for oil...more
In a recent decision, the Pennsylvania Superior Court resolved an open question of state law regarding which one of two alternative statutes of frauds apply to oil and gas leases, in the process making clear that for an oil...more
So your oil and gas lease has now converted from the primary term to the secondary term – now what? There are several issues that a landowner or mineral interest owner should be aware of at this stage of the lease. ...more
In a recent case, Cameron v. Hess Corporation, Case No. 2:12-CV-00168 (September 24, 2013), the United States District Court for the Southern District of Ohio held that an eastern Ohio oil and gas lease entered into by Hess...more