The Oil and Gas Addendum
An Oil and Gas Blog for Landowners.
The law of oil and gas here in Pennsylvania and throughout the Marcellus Shale region is complex and continues to evolve and change. If you own oil and gas rights, keeping up to date on these changes and trends is critical. The Oil and Gas Addendum is your resource for timely and informational articles on the latest developments in oil and gas law. Our oil and gas practice here at Houston Harbaugh is dedicated to protecting the interests of landowners and royalty owners. From new lease negotiations, to title disputes, to royalty litigation, we can help. We know oil and gas.
Ohio Appeals Court Rules that Horizontal Shale Well Was “On” the Leased Premises
Let’s assume you own a 175 acre farm in Washington County. Your grandfather acquired the farm back in 1948 from Farmer Brown (the “1948 Deed”). Your grandfather always...
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Pennsylvania Court Concludes that Certain Sunoco Entities Did Not Have Eminent Domain Authority in Washington County for Mariner East Pipeline in 2013
In a February 7, 2025 decision in Simon v. Sunoco Pipeline LP, No. 2015-3302 (Wash. Cty. February 7, 2025), the Court of Common Pleas of Washington County, Pennsylvania...
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A Chilling Effect on Zoning
Pennsylvania Senate Bill 102 Revives Unconventional Gas Well Fee Prohibitions Pennsylvania Senate Bill 1346 which was introduced at the end of the 2023-2024 legislative session. Its aim was...
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Pennsylvania Superior Court Reaffirms the Dunham Rule
Let’s assume you inherited a 150 acre farm in Lycoming County that has been owned by your family since 1909. In 2020, you are approached by ABC Drilling...
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Ohio Court of Appeal Addresses Whether Gathering and Transportation Are Separate and Distinct Post-Production Activities
As we approach the 20th anniversary of the Marcellus Shale play, one issue remains constant: the ongoing debate over the deduction of post-production costs. Landowners all across Pennsylvania...
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No Funding For You?
Draft Legislation Restricting Unconventional Gas Well Fee May Be Difficult to Implement On November 7, 2024, several Pennsylvania state senators from oil and gas producing regions introduced Senate...
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Texas Appellate Court Rules That ‘Free of Cost’ Clause In 1960 Deed Prohibits The Deduction of Post-Production Costs
Let’s assume you own a 135 acre farm in Tioga County, Pennsylvania. In 2020, you negotiate a new oil and gas lease with XYZ Drilling Company. During the...
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Federal District Court Sends Pennsylvania Royalty Dispute To Trial
Middle District of Pennsylvania Determines that Meaning of Oil and Gas Lease “Marketing” Language Cannot Be Determined as a Matter of Law in Chambers v. Equinor USA Onshore...
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Buyers and Sellers of Pennsylvania Real Estate Should Use Caution
Buyers and Sellers of Pennsylvania Real Estate Should Use Caution Pennsylvania Oil, Gas and/or Mineral Rights/Interests Disclosure Form Tries to Do Too Much If you have bought or...
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Texas Appeals Court Rules that Surface Owner Could Not Enforce Pipeline Burial Covenant in Oil and Gas Lease
Let’s assume that you purchase a 105 acre farm in Greene County in 2022. You purchase only the surface estate while the seller, Farmer Jones, retains the underlying...
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Pennsylvania Court Rules That Shut-In Royalty Provision Had No Connection to the Duration of an Oil and Gas Lease
In its May 22, 2024 non-precedential memorandum decision in Frye v. Penn View Exploration, Inc., 919 WDA 2023 (Pa. Super. Ct. May 22, 2024), the Pennsylvania Superior Court...
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Texas Supreme Court Addresses Fuel Gas Question
Many oil and gas leases across Pennsylvania allow the driller to divert and use volumes of raw gas to power and fuel production operations both on and off...
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Types of Costs: Production Costs v. Post-Production Costs
Different types of “costs” may be charged against oil and gas royalty owners. Brendan A. O’Donnell discusses differences between “production” costs and “post-production” costs.
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Texas Supreme Court to Address the Obligation to Calculate Royalty on Gas Used to Fuel Off-Lease Operations
Let’s assume you own 165 acres in Tioga County. In 2019, you sign a new oil and gas lease with ABC Drilling. You negotiate an 18% net royalty. ...
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Commonwealth Court Sends Drilling Waste Injection Well Case Back to Zoning Hearing Board
In Plum Borough v. Zoning Hearing Board of the Borough of Plum,____ A.3d ____ , No. 1198 CD 2022 (Pa. Commw. Ct. Jan. 29, 2024), the Pennsylvania Commonwealth...
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The Neale Rule – Who Really Owns the Oil and Gas Under Railroads?
Since the early 1900’s, your family has owned a 105 acre farm in Greene County, Pennsylvania. In 2024, you and your siblings sign an oil and gas lease...
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The Centerline Presumption – Who Really Owns the Oil and Gas Under Roads and Highways? (Part II)
A troubling and confusing issue here in Pennsylvania concerns the ownership of oil and gas rights under roads and highways. For example, let’s assume Farmer Joe owned 115...
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Abandoned Wells vs. Orphan Wells
Old, non-producing wells in Pennsylvania can fall into two different categories: orphan wells and abandoned wells. Brendan A. O’Donnell addresses the highlights of the key distinctions between orphan...
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Will Cryptocurrency and Data Mining Add New Complexity to Oil & Gas Zoning?
Questions about the zoning of oil and gas development operations have persisted in Pennsylvania for years. Now, cryptocurrency and data mining operations may create new wrinkles in long-running...
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Who Owns the Produced Water From Oil & Gas Operations?
Although historically viewed as a waste, produced water that comes to the surface as part of the oil and gas production stream now potentially has value. Produced water...
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West Virginia Appellate Court Rules That Estate Misconception Theory Did Not Apply To 1902 Deed
The calculation of production royalties and the deduction of post-production costs remains a troubling issue for Pennsylvania landowners. But there is another frustrating and often confusing royalty-related issue...
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Could a Proposed New York Carbon Dioxide Injection Program Work In Pennsylvania?
A company in New York is attempting to secure leases to allow it to produce oil and gas and to use the leased land for a carbon dioxide...
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The Colorado Supreme Court Declines to Adopt Commercial Discovery Rule
Let’s assume you own 136 acres in Tioga County. In 2011, you signed a new oil and gas lease with ABC Production (the “2011 Lease”). The 2011 Lease...
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Texas Court Confirms “Automatic Termination” Rule for Oil and Gas Lease
In Cromwell v. Anadarko E&P Onshore, LLC, 676 S.W. 3d 860 (Tex. App. 2023), the Texas Court of Appeals confirmed the automatic termination of an oil and gas...
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Pennsylvania Federal Court Dismisses Gas Driller’s Declaratory Judgment Lawsuit Involving Oil & Gas Lease
In an October 10, 2023, the United States District Court for the Middle District of Pennsylvania dismissed a gas driller’s declaratory judgment lawsuit involving an oil and gas...
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Federal District Court in Texas Issues Mixed Ruling for Landowners in Royalty Dispute
The processing of natural gas requires a constant and reliable energy source. Critical operations such as compression, separation and dehydration cannot be conducted unless the driller has “fuel”...
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North Dakota Supreme Rules That Driller Did Not Commence Reworking Operations In Timely Manner
The modern producing gas well is a sophisticated and complex piece of equipment. The basic well head itself consists of several meters, valves and other components, each of...
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Repurposing Oil and Gas Wells for Renewable Energy in Pennsylvania Raises Multiple Legal Issues
The potential for repurposing old oil and gas wells for renewable energy raises a number of complex legal issues in Pennsylvania. In recent years, the federal government has...
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Can Cryptocurrency Mining Maintain an Oil and Gas Lease Beyond Primary Term?
The recently filed Hobe Minerals Limited Liability Company v. Bonanza Creek Energy Operating Company, LLC, et al lawsuit in a Colorado trial court challenges whether intermittent cryptocurrency mining...
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Federal Court In Ohio Rules That Driller Must Establish Marketability of Each Gas Product Under Market Enhancement Clause
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...
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Pennsylvania Superior Court Clarifies Nature of Oil and Gas Lease Under Pennsylvania Law
Let’s assume you own a 160-acre farm in Washington County. Your father purchased the farm in 1992 from a local farmer named Jones. (the “1992 Deed”). At the...
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Landowners Should Be Careful Before Making Representations About Prior Oil and Gas Development on their Property
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....
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Federal Court in West Virginia Rules That Insurance Policies Do Not Cover Claims by Oil and Gas Driller for Lost Drilling Opportunities
In its March 14, 2023 decision in Scottsdale Insurance Co. v. Solwind Energy, LLC, Case No. 2:22-CV-00036 (S.D.W.Va. Mar. 14, 2023), the United States District Court for the...
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The Strip and Gore Doctrine - Who Really Owns The Oil and Gas Under Roads and Highways?
Let’s assume your grandfather owned 99 acres in Washington County. In 1955, he sells a small portion of the farm to the Commonwealth of Pennsylvania in order to...
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Proposed Carbon Capture and Sequestration Act Offers Much for Pennsylvania Property Owners to Consider
On June 20, 2023, Pennsylvania State Senators Yaw, Robinson, Stefano and Vogel introduced Senate Bill 831, the “Carbon Capture and Sequestration Act” with the intent to address the...
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Recent Federal District Court Decision Suggests New Approach for Oil and Gas Lease Termination
The United States District Court for the Western District of Pennsylvania’s recent decision in Bootes v. PPP Future Development, Inc., C.A. No. 22-154 (W.D.Pa. March 21, 2023) denying...
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Texas Supreme Court Rules That Scheduling Mistake Does Not Qualify as Force Majeure Event
Let’s assume you signed a new oil and gas lease with XYZ Drilling in August 2018 (the “2018 Lease”). Your lease contains a “continuous drilling” clause which requires...
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Can Owners of Severed Oil and Gas Estates in Pennsylvania Lease Gas Storage Rights?
A dual purpose oil and gas lease transitions into its secondary term, and remains in its secondary term, if oil and gas is produced from the leasehold or...
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Texas Supreme Court Rules That 1924 Deed Conveyed One Half Of The Oil and Gas Estate
The calculation of production royalties and the deduction of post-production costs remains a controversial topic here in Pennsylvania. As we have written before, there is another frustrating and...
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Regulating Underground Injection Wells for Carbon Sequestration in Pennsylvania
If carbon in the atmosphere is a problem, and that atmospheric carbon resulted from burning fossil fuels like coal, oil and gas, then a simple solution is to remove...
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Texas Supreme Court Rules That Post-Sale Costs Must be Added Back to Gross Proceeds Calculation
Let’s assume you own 185 acres in Washington County. In 2020, you negotiate a new oil and gas lease with ABC Drilling. During the negotiations, you insist on...
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Coordinating Solar Farm Development With Oil and Gas Rights in Pennsylvania
Solar farm developers who do not enter into surface use agreements with Pennsylvania oil, gas and mineral owners (and their lessees) could create legal jeopardy for their solar...
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Ohio Federal Court Allows Subsurface Trespass Suit To Move Forward
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...
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Pennsylvania Supreme Court Agrees to Hear Appeal In Royalty Dispute
On February 15, 2023, the Pennsylvania Supreme Court agreed to hear the appeal of PennEnergy Resources, LLC in the Dressler Family, LP v. PennEnergy Resources, LLC matter. The...
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Can "Free Gas" Clauses Refute the Artificial Wellhead Value Suggested by Drillers?
An oil and gas lease with a “free gas” clause may be a valuable tool for landowners to push back against drillers’ inaccurate attempts to value gas at...
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Can Retroactive Pooling and Unitization Revive An Expired Lease?
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...
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Ohio Court of Appeals Upholds Depth Severance Clause in Lease
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...
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Federal Appeals Court Rules That Driller Must Establish Marketability of Each Gas Product Under Market Enhancement Clause
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...
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What the Hedge? - The Impact of Price Hedging on Landowner Production Royalties
There is no way to avoid it. It seems like everything costs more now than it did last week, last month and last year. Energy is one area...
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Market Enhancement Clauses in Pennsylvania After Dressler Family, LP v. PennEnergy Resources, LLC
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....
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What Does Your Drilling Unit Look Like?
Years ago, Staples came out with its “easy” button as part of a marketing strategy. For Pennsylvania oil and gas owners, there are some straightforward things that should...
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Is Deducting Fuel Costs Authorized by Your Lease?
Not only are landowners denied a royalty on the fuel gas volume, but they are also having that same “cost” deducted from their production royalty.
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Pore Space Ownership: The North Dakota Supreme Court Issues Landmark Decision
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...
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Is the Value of Your Gas Really Being Enhanced?
Let’s assume you own 115 acres in Greene County, Pennsylvania. In 2017, you signed an oil and gas lease with ABC Exploration, Inc. During the negotiations, you agreed...
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Who Can Grant Gas Storage Rights?
Let’s assume you own a 95 acre farm in Tioga County. Your family has owned the farm since the early 1900’s. However, in 1961, your grandfather severed the...
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Pore Space: The Next Leasing Frontier for Pennsylvania Landowners?
Let’s assume you own a 135 acre farm in Washington County. In 1976, your grandfather signed an oil and gas lease with ABC Oil. Several years later, ABC...
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Pennsylvania Superior Court Rules that Royalty Clause Referencing Both ‘Gross Proceeds’ and ‘At the Well’ Was Ambiguous
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...
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Kentucky Federal Court Fumbles Lease Expiration Claim
Let’s assume you own a 110 acre farm in Washington County. The farm is subject to an oil and gas lease which was signed by your grandfather in...
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Are Your Royalties Going Up In Flames?
Royalty provisions can differ and often contain different royalty valuation points. But all of those leases are subject to the Pennsylvania Guaranteed Minimum Royalty Act (the “GMRA”), which imposes a minimum royalty on all hydrocarbon production
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Texas Supreme Court Issues Troubling Decision in Royalty Dispute
The practice of deducting post-production costs from landowner royalties remains a controversial and contentious issue here in Pennsylvania. Many landowners sought to insulate their royalties from such deductions by negotiating royalty clauses which require the hydrocarbons to be sold “free of cost in the pipeline.”
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Texas Federal Court Rules No Royalty Due on Gas Used to Fuel Off-Lease Operations
No Royalty Due on Gas Used to Fuel Off-Lease Operations because the gas is never sold or marketed and is instead consumed as fuel during the processing operation
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Claim Based On Implied Covenant To Market Gas To Move Forward In Federal Royalty Litigations
For many landowners in Pennsylvania, the receipt of the monthly royalty statement is an ongoing source of frustration and anger. In addition to excessive and unreasonable deductions for...
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Is the Implied Covenant of Reasonable Development Irrelevant?
The Pennsylvania Superior Court has continued the unfortunate recent trend of eroding the implied covenant of reasonable development in Pennsylvania. Generally, upon discovery of hydrocarbons, the implied covenant...
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To Drill or Not to Drill – Does Pennsylvania Recognize an Implied Covenant of Further Exploration?
Over the last 18 months natural gas operators from all over the world have converged on Western Pennsylvania. Their goal has been to secure new leases from landowners...
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Federal Court in Kentucky Allows Novel Royalty Claim to Move Forward
Federal Court in Kentucky Allows Novel Royalty Claim to Move Forward
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Failure to Tender Production Royalty Did Not Trigger Forfeiture Clause
Failure to Tender Production Royalty Did Not Trigger Forfeiture Clause In a typical oil and gas lease, there are three primary sources of compensation to the landowner: the...
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Court Rules Severance Tax Does Not Increase Value of Shale Gas, Therefore Not a Deductible Post-Production Cost
A landmark decision on the practice of deducting post-production costs was recently issued by the Supreme Court of Kentucky. Specifically, the court held that a lessee could not...
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Pennsylvania Superior Court Rules that Oil and Gas Rights Did Not Transfer to Buyer
The question of whether a sale of real estate includes the underlying gas rights remains a troubling issue for some Pennsylvania landowners. For example, let’s assume your family...
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Preliminary Operations Not Enough To Extend Lease into Secondary Term
Preliminary Operations Not Enough To Extend Lease into Secondary Term In a recent decision, the Arkansas Court of Appeals concluded that conducting preliminary drilling operations was not enough...
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Superior Court Breathes New Life Into Guaranteed Minimum Royalty Act
Superior Court Breathes New Life Into Guaranteed Minimum Royalty Act As the debate in Harrisburg heats up this winter regarding the practice of deducting post-production costs from oil...
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Pennsylvania Superior Court Fumbles Lease Expiration Claim
Pennsylvania Superior Court Fumbles Lease Expiration Claim Every oil and gas lease has essentially the same objective: the drilling of a well and the eventual payment of production...
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Ohio Supreme Court Observes That Driller Cannot Maintain Lease Indefinitely by Paying Delay Rentals
In the early days of the Marcellus leasing boom, your grandfather executes an oil and gas lease covering the 100 acre family farm in Mercer County. The landman...
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Ohio Supreme Court Declines To Recognize Implied Covenant Of Further Exploration
There are thousands of shallow oil and gas wells across Pennsylvania. Many of these shallow wells were drilled pursuant to leases that were originally executed in the early...
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Landowners May Face Difficult Burden Regarding Intermingled Gas
Landowners May Face Difficult Burden Regarding Intermingled Gas A recent opinion issued by the Pennsylvania Superior Court may place a difficult burden on landowners confronted with a subsurface...
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Landowners: Act Now or be Bound by Class Action Settlement Terms
If you have a lease with Chesapeake, you could be impacted by the recent class action settlement in the Demchak Partners Limited Partnership v. Chesapeake Appalachia, LLC litigation....
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Federal District Court In Pennsylvania Allows Royalty Claim To Move Forward
Pennsylvania Allows Royalty Claim To Move Forward
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Federal District Court In Ohio Rules That Chesapeake Did Not Breach Lease When It Deducted Costs From Royalty
In the ongoing royalty dispute in Lutz v. Chesapeake Appalachia, LLC, the federal district court sitting in Akron, Ohio recently ruled that Chesapeake did not breach the parties’...
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Federal Court in Scranton Rules That Litigation Filed by Landowner Did Not “Repudiate” the Lease
Continuing a trend that puts Pennsylvania at odds with most oil/gas jurisdictions, the federal court in Scranton recently ruled that an unsuccessful suit filed by a landowner challenging...
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A Possible Blueprint for Landowners Challenging Pipeline Companies
A Possible Blueprint for Landowners Challenging Pipeline Companies Landowners in Kentucky may be emboldened by a recent decision by the Kentucky Court of Appeals that rejected an attempt...
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Sixth Circuit Rules That Driller Must Pay Royalties On Natural Gas Liquids
Sixth Circuit Rules That Driller Must Pay Royalties On Natural Gas Liquids
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PUC Decision Suggests Pipeline Operator Has Public Utility Status
Landowners should be wary of the Oct. 24 decision by the Pennsylvania Public Utility Commission strengthening Sunoco Pipeline LP’s claim as a public utility and possibly paving the...
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Pooling Clause Not Necessary: West Virginia Court Finds Implied Right to Pool Exists Where Lease Silent
The development of the Marcellus Shale in Pennsylvania has been facilitated by the marriage of modern drilling technology with the legal concept known as “pooling”. In short, a...
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Pipeline Operators: Public Utility or Pipeline Futility?
The meteoric development of the Marcellus Shale is staggering. Since 2004, nearly 7,800 unconventional gas wells have been drilled throughout Pennsylvania. One of the stark realities of this...
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Pennsylvania Superior Court Rules That Driller Abandoned Oil/Gas Lease By Failing To Pay Royalties For Over 20 Years
Your family owns a 125 acre farm in Greene County. Back in 1966, your grandfather signed a lease with XYZ Oil Co. In that 1966 lease, XYZ Oil...
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Pennsylvania Superior Court Rejects Rule of Capture in Subsurface Trespass Suit
In a landmark decision, the Pennsylvania Superior Court recently ruled that the “rule of capture” does not apply to frac fissures that extend under unleased parcels. The decision...
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Good News for Landowners Means Bad News for Trespassers
In a recent decision, the Pennsylvania Superior Court gave diligent landowners powerful protection against unwanted subsurface activity. In Sabella v. Appalachian Development, 2014 Pa. Super. 237 (2014), the...
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Federal District Court in Ohio Rules That Driller Did Not Breach Lease by Deducting Post-Production Costs Incurred by Affiliate
Federal District Court in Ohio Rules That Driller Did Not Breach Lease by Deducting Post-Production Costs Incurred by Affiliate
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Federal Court Rules that Assignment of Oil/Gas Lease May Not Extinguish Liability of Original Lessee
Landowners are often alarmed and angered when they receive word that the oil/gas lease they executed several years ago, after months of intense and personal negotiations, has been...
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Federal Court in Pittsburgh Questions Applicability of Kilmer Decision
In a recent decision, the federal court in Pittsburgh held that the definition of “royalty” adopted by the Pennsylvania Supreme Court in Kilmer v. Elexco Land Services, Inc. was not...
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Federal Court in Pittsburgh Allows Lease Cancellation Suit to Move Forward
Throughout Pennsylvania it is not uncommon to encounter gas wells that were drilled over 100 years ago. These ancient wells were drilled pursuant to oil/gas leases that often...
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West Virginia Supreme Court Rules That Horizontal Wells Cannot Be Drilled Into Adjacent Tracts Pursuant to 1901 Lease
Imagine your family has owned a 230-acre tree farm in Butler County for over 100 years. Back in 1937, your grandfather sold the oil and gas rights under...
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West Virginia Supreme Court to Reconsider Landmark Decision in Leggett v. EQT Production Company
In a rather surprising move, the West Virginia Supreme Court has decided to revisit the November 17, 2016 opinion it issued in the Leggett v. EQT Production Company...
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Temporary Cessation of Production: How much time does a producer have under Pennsylvania law?
The modern producing gas well is a sophisticated and complex piece of equipment. The basic well head itself consists of several meters, valves and other components, each of...
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West Virginia Federal Court Rules That Lease Did Not Authorize the Deduction of Post-Production Costs
Your family owns a 300 acre farm in Ritchie County, West Virginia. There is a lease from 1978 on the property that has now been incorporated into a...
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Tenth Circuit Rules That Obligation To Pay Royalty On Fuel Gas Depends On Lease Language
royalty may be due depending on the precise language in the parties’ oil and gas lease.
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West Virginia Moves To Prohibit Drillers From Taking Deductions Which Reduce Net Royalty Below 12.5%
West Virginia Moves To Prohibit Drillers From Taking Deductions Which Reduce Net Royalty Below 12.5%
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Non-Producing Oil and Gas Lease Deemed Abandoned by the Pennsylvania Superior Court
There are thousands of older vertical wells scattered across Pennsylvania. Many of these wells have not produced oil or gas in years and have fallen into disrepair. Despite...
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Pennsylvania Superior Court Rules Driller had no Implied Obligation to Develop Deeper Formations
In a recent non-precedential decision, the Pennsylvania Superior Court ruled that a driller did not breach the implied covenant of reasonable development by failing to drill a Marcellus...
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Ohio Supreme Court Rules that Lease Expiration Claim is Subject to Twenty-One Year Statute of Limitations
Let’s assume you own a 173 acre farm in Washington County, Pennsylvania. You purchased the farm in 2018. Prior to purchasing the farm, the seller disclosed that there...
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Driller Has No Obligation to Pay Royalty on Lost Gas
Imagine you own an apple orchard. You sign a contract with XYZ Produce which grants them the exclusive right to harvest your apples. At the end of the...
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Pennsylvania Landowners May Not Own Oil and Gas Rights Under Rivers and Streams
Since the 1890s, your family has owned a 150 acre farm in Washington County, Pennsylvania. In 2014, you and your siblings sign an oil and gas lease with...
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Has Forced Pooling Come to Pennsylvania With SB 259?
Imagine you own a 95-acre farm in Washington County, Pa. The farm has been in your family since the 1930s. Your great-grandfather signed an oil and gas lease...
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West Virginia Supreme Court Declares that Minimum Royalty Statute Does Not Authorize the Deduction of Post-Production Costs
Landowners in West Virginia received an early Christmas gift from the West Virginia Supreme Court last month. In a landmark opinion, the Supreme Court in Leggett v. EQT...
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HB 1391: Putting Teeth Back in Pennsylvania’s Minimum Royalty Statute
Throughout Pennsylvania, landowners are continuing to experience “sticker shock” when they open their royalty statements related to gas drilling. The practice of deducting post-production costs from the royalty...
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North Dakota Supreme Court Rules That “Gross Proceeds” Means No Deductions
The practice of deducting post-production costs from the landowner’s royalty remains one of the most controversial and disputed issues here in Pennsylvania. Many landowners sought to insulate their...
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Adverse Possession – Can Surface Owner Acquire Title to Gas Formations by Mere Passage of Time?
Gas operators have been drilling gas wells throughout this Commonwealth for over a hundred years. As a result, the Pennsylvania countryside is littered with tens of thousands of...
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Legislation Revived to Protect Royalty Owners in Pennsylvania
On June 23, 2015, Representatives Garth Everett (R-Lycoming), Sandra Major (R-Susquehanna/Wayne), Matt Baker (R-Bradford/Potter/Tioga), Tina Pickett (R-Bradford/Sullivan/Susquehanna) and Karen Boback (R-Lackawanna/ Luzerne/Wyoming) re-introduced legislation which seeks to clarify...
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Local Zoning Ordinances May Hinder Oil/Gas Development
A recent ruling from Lycoming County suggests that the next big fight over Marcellus Shale drilling in Pennsylvania may be waged at the local municipal level. For those...
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The Accommodation Doctrine: Balancing the Interests of the Surface Owner and the Mineral Owner
As the rush to access the Marcellus Shale formation continues, landowners throughout the Commonwealth are learning that their properties may be the next location for a horizontal well...
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My Driller Filed for Bankruptcy; What Happens to My Lease in Pennsylvania?
The oil and gas business has been defined by cyclical “booms” and “busts”. Increased investment, drilling and production during growth years can lead to oversupply in the marketplace,...
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Is Pa. Becoming a First-Marketable-Product Jurisdiction?
Many landowners across Pennsylvania are experiencing sticker shock upon opening their first royalty statement. They have waited months, often years, to receive their first royalty. As they open...
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The Difference Between a “Royalty” and a “Royalty Interest” Can Be Confusing and Costly For Landowners
The calculation of production royalties and the deduction of post-production costs is a hot topic for landowners across Pennsylvania. But there is another frustrating and often confusing royalty-related...
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Subsurface Trespass – Can They Take the Gas Under My Property Without a Lease?
This is a familiar yet troubling question. Imagine that you own 150 acres in southwestern Pennsylvania. You have received offers from several prominent gas producers but have not...
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Kentucky Court Rules That Lease Expired Due To Driller’s Failure To Market And Produce Gas
There are thousands of older vertical wells scattered across Pennsylvania. Many of these wells have not produced oil or gas in years and have fallen into disrepair. Despite...
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Not Your Father’s Oil and Gas Lease
Horizontal Drilling Presents Unique Leasing Issues The modern oil and gas lease is a sophisticated and complex legal instrument that has evolved over the last several decades. This...
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What Is A Shut In Well? Can the Payment of a Shut-In Royalty Maintain an Oil/Gas Lease Indefinitely?
This is a familiar but troubling issue for a growing number of landowners throughout the Marcellus Shale fairway. Imagine you own 145 acres in Tioga County, Pennsylvania. You...
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Ohio Supreme Court Declines to Adopt Blanket “At the Well” Rule
The question of whether Ohio follows the “at the well” rule or the “marketable product” rule will have to wait for another day. And that might not be...
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Ohio Court Rules That Driller Did Not Breach Lease By Deducting Post-Production Costs Incurred By Affiliate
Assume you own 110 acres of timber in Washington County. You decide to cut and clear 75 acres. You hire ABC Logging Inc. (“ABC Logging”) to cut and...
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Not All is Quiet on the Quiet Title Front
A decision from the U.S. District Court for the Middle District of Pennsylvania should serve as an important reminder for landowners who, in the midst of ongoing oil...
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Non-Production During Secondary Term Results in Termination of Lease
In a recent decision, the Washington County Court of Common Pleas granted a landowner’s request to terminate a ninety-one year old oil/gas lease due to non-production. In Wilson...
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New Royalty Bill Hb 1708 Will Not Help Pennsylvania Landowners
Throughout Pennsylvania, landowners are continuing to experience frustration and anger when they open their royalty statements. The practice of deducting postproduction costs from the gas royalty has become...
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What Is the Pennsylvania One Call System?
April is National Safe Digging Month, reminding all contractors and homeowners to call 811 at least three business days before starting a digging project to ensure that all...
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Federal District Court in Pittsburgh Rules That 1897 Deed Did Not Grant a Non-Participating Royalty Interest
When a landowner executes an oil and gas lease, the developmental rights are transferred to the lessee. The lessor’s interest in the transferred developmental rights is known as a “possibility of reverter”. If the oil and gas lease expires, the developmental rights automatically revert back to the lessor-landowner.
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The Net-Back Method Does Not Result In Better Pricing to Justify Deductions Under Market Enhancement Clauses
Landowners with market enhancement clauses should carefully review their royalty statements and pay particular attention to the commodity prices reported in their statements. If these prices remain below nearby index prices but the gathering and transportation costs remain the same, it is difficult to justify how these movement costs resulted in better pricing.
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The New Royalty Bill is Good for Pennsylvania Landowners
On August 5, 2021, Rep. Eric Davanzo (R-Westmorland County) introduced HB 1763. The bill seeks to clarify Pennsylvania oil and gas law by defining the term “royalty”. It...
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Is Your Driller Really Enhancing the Value of Your Gas?
The driller cannot deduct the cost of dehydrating the raw gas and then moving the gas 165 miles away to a distant buyer unless the final net sales price at that location is better than the price the driller would have received selling the gas locally.
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Texas Appellate Court Rules that Lease Terminated Due to Twelve Months of Non-Production
The modern producing gas well is a sophisticated and complex piece of equipment. The basic well head itself consists of several meters, valves and other components, each of...
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Pennsylvania Supreme Court Issues Confusing and Troubling Decision for Landowners
In 2019, the Pennsylvania Superior Court issued a landmark decision in the SLT Holdings, LLC v. Mitch-Well Energy Inc, 217 A. 3d 1258 (Pa. Super. Ct. 2019) matter....
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Federal District Court Injects Confusion into Definition of Gross Royalty Under Pennsylvania Law
Drillers are becoming more creative and aggressive in their effort to avoid lease language that was intended to prohibit or restrict the deduction of post-production costs.
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Ohio Appellate Court Issues Troubling Decision for Landowners and Drillers
Joint ownership of oil and gas rights is fairly routine here in Pennsylvania. But what happens when one co-tenant unilaterally signs an oil and gas lease without informing...
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Are February 2021 Production Royalty Payments Leaving you Out in the Cold?
Pennsylvania Attorney General announced a settlement that Chesapeake must stop offering leases that contain “market enhancement” clauses or “ready for sale or use” clauses to Pennsylvania landowners.
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Abandoned Oil and Gas Wells On Your Property – More Than Just a Rusty Eyesore
Imagine you just inherited a 200-acre farm in rural Butler County that has been in your family for decades. As a young child, you recall walking through one...
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Does a Well Passing Horizontally Under A Property Trigger A “Payment in Lieu of Free Gas” Clause? The Pennsylvania Superior Court Says “No”.
In a recent ruling in Mitch v. XTO Energy, Inc. the Pennsylvania Superior Court has reasoned that a well drilled horizontally below a landowner’s property does not trigger the “free...
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Is Your Driller Trying to Re-Write History?
The driller cannot unilaterally amend or modify the underlying lease by changing the effective date of the pooling instrument. This, in turn, means that the driller cannot go back in time and make retroactive changes to the previously recorded unit declaration. The driller can change or modify the size, shape, and boundary of the unit but those changes can only affect your royalty prospectively.
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Texas Supreme Court Rules That Gross Royalty Clause Prohibits Driller From Deducting Post-Production Costs
Texas Supreme Court Rules That Gross Royalty Clause Prohibits Driller From Deducting Post-Production Costs
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Historic Cold May Provide Window Into “Market Enhancement” Under Gas Leases
These clauses typically contain language that prohibits a driller from deducting post-production costs unless the driller can demonstrate that the purported costs “enhanced the value” of the gas and enabled the driller to receive a better price for the gas.
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Kansas Court Rules that Gas is not Marketable Until it Reaches Interstate Pipeline
Under most “market enhancement” clauses, the costs associated with moving, processing and transporting the gas should not be deductible. If you have a “market enhancement” clause, you should carefully review and monitor your royalty statements for improper or excessive deductions.
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Hordis v. Cabot Oil and Gas Corporation: Landowner Challenges Whether Driller Can Ignore Pooling Clause and Simply Rely on Act 85
Oil and gas law is replete with unique terms and concepts. Perhaps one of the most confusing and complex areas of oil and gas law is the concept...
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Why Is The Driller Deducting Post-Production Costs My Lease Doesn’t Allow? Kilmer V. Elexco Land Services: A Decade Later
Kilmer granted them an automatic and universal right to deduct post-production costs – even when the underlying lease says nothing about deductions.
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Is Your Property At Risk If The Driller Or Pipeline Company Doesn’t Pay Its Contractors?
A great deal of infrastructure is needed to move oil and gas from their reservoirs thousands of feet below the ground to the places where these hydrocarbons are...
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Pennsylvania Superior Court Rules That Payment Of Delay Rentals Alone Cannot Maintain A Lease Beyond Primary Term
Your family owns a 87 acre farm in Tioga County. Back in 1979, your grandfather signed a lease with ABC Oil Co with a customary primary term of...
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Coronavirus, Chinese LNG Imports & Force Majeure: A Canary in a Coal Mine?
Pressure continues to mount on the Chinese economy as fears of the coronavirus mount. Though the Chinese government has taken steps to halt the spread of the virus,...
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Energy Independence? Current Events May Prove Test Case
“Energy Independence” has been frequently heard in recent years as a tag-line to marshal public support for shale drilling. But, is there a connection between shale drilling and...
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Landowners Beware: Warranty Clause in Oil and Gas Lease Can Obligate Landowner to Repay Signing Bonus
The fine print in an oil and gas lease can have some serious repercussions for an unwary landowner. One of the fine print clauses that often gets overlooked...
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Driller Bankruptcy Could Raise Environmental Concerns for Landowners
In mid-2019, Fram Operating, LLC and its parent, Fram Americas, LLC filed for Chapter 7 bankruptcy protection in Colorado. Fram was an oil and gas producer with wells...
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Supreme Court Decision in Briggs v. Southwestern Energy is a “Win” for Pennsylvania Landowners
On January 22, 2020, the Pennsylvania Supreme Court issued a much-anticipated ruling in Briggs v. Southwestern Energy Production Company regarding the interplay between the “rule of capture” and...
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Act 85 and Cross-Unit Drilling – More Questions Than Answers for Landowners
On November 7, 2019, Governor Wolf signed Act 85 of 2019 (“Act 85”) into law. This is an unfortunate and deeply flawed piece of legislation. Pursuant to Act...
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Oklahoma Federal Court Rules That Driller Must Pay Royalty On Fuel Gas
Driller Must Pay Royalty On Fuel Gas
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Houston Harbaugh, P.C. Files “amicus Curiae Brief’ On Behalf Of The Pennsylvania Chapter Of The National Association Of Royalty Owners In Briggs, Et Al V. Southwestern Energy (63 Map 2018)
Robert J. Burnett is a director and chair of Houston Harbaugh’s Oil and Gas practice. To learn more about our work with landowners and royalty owners, visit our Oil...
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Murphy Exploration v. Adams: Texas Supreme Court Suggests That Horizontal Well Bore Will Not Drain Hydrocarbons From Adjacent Tract
As more and more horizontal well bores are being drilled across Pennsylvania, landowners are now keeping a closer eye on the location of nearby wells. For example, imagine...
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West Virginia Jury Finds That EQT Improperly Calculated Landowners’ Royalty on Shale Gas
EQT Improperly Calculated Landowners’ Royalty on Shale Gas royalty was artificially reduced by EQT’s practice of “netting out” post-production costs incurred between the wellhead and the downstream point-of-sale
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Why the New Minimum Royalty Bill is Constitutional and Good for Pennsylvania
On February 17, 2017, Rep. Garth Everett (R-Lycoming County) introduced HB 557. The bill seeks to put teeth back into Pennsylvania’s Guaranteed Minimum Royalty Act (“GMRA”) by prohibiting...
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New Legislation May Allow Drillers To Revive Expired Oil And Gas Leases
If you have an abandoned oil and gas well on your property, it may no longer be just an ugly eye-sore. As a result of controversial legislation recently...
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Subsurface Mining Rights Revisited
In Commonwealth v. Seneca Resources Corporation, 2014 LEXIS 608 (Pa. Commw. Ct., October 6, 2014), the Commonwealth Court of Pennsylvania revisited the Pennsylvania Gaming Commission’s (“Commission”) complaint that alleged...
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Zoning Issues for a Well Pad Site in Post-Robinson Times
In Gorsline, et al. v. Board of Supervisors of Fairfield Township et al., No. 14-000130 (Lycoming Co. C.P., August 29, 2014), certain individuals appealed the decision of the...
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A Review of Robinson Township v. Commonwealth of Pennsylvania
On February 21, 2014, the Supreme Court of Pennsylvania declined to reconsider its landmark decision of December 19, 2013, invalidating several provisions of Act 13 on the grounds...
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Marcellus Shale Gas is Not a Mineral. What Does This Mean for Lease-holders?
On April 24, 2013, the Pennsylvania Supreme Court issued its much anticipated decision in Butler v. Charles Powers Estate (“Butler II”). At issue in Butler II was whether...
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Pennsylvania Superior Court Interprets Forfeiture Clause in Oil and Gas Lease
In McCausland v. Wagner, the Pennsylvania Superior Court was confronted with the question of whether the lessor under an oil and gas lease was entitled to terminate the...
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Free Natural Gas On Property: Who's Entitled To Free Gas?
Suppose you purchase a 100-acre farm in Armstrong County. You are told that the property is subject to an old gas lease but that the farmhouse receives “free...
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Free Natural Gas On Property: Who’s Entitled To Free Gas?
Suppose you purchase a 100-acre farm in Armstrong County. You are told that the property is subject to an old gas lease but that the farmhouse receives “free...
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About Us
Oil and gas development can present unique and complex issues that can be intimidating and challenging. At Houston Harbaugh, P.C., our oil and gas practice is dedicated to protecting the interests of landowners and royalty owners. From new lease negotiations to title disputes to royalty litigation, we can help. Whether you have two acres in Washington County or 5,000 acres in Lycoming County, our dedication and commitment remains the same.
We Represent Landowners in All Aspects of Oil and Gas Law
The oil and gas attorneys at Houston Harbaugh have broad experience in a wide array of oil and gas matters, and they have made it their mission to protect and preserve the landowner’s interests in matters that include:
- New lease negotiations
- Pipeline right-of-way negotiations
- Surface access agreements
- Royalty audits
- Tax and estate planning
- Lease expiration claims
- Curative title litigation
- Water contamination claims
Robert Burnett - Practice Chair
Robert’s practice is exclusively devoted to the representation of landowners and royalty owners in oil and gas matters. Robert is the Chair of the Houston Harbaugh’s Oil & Gas Practice Group and represents landowners and royalty owners in a wide array of oil and gas matters throughout the Commonwealth of Pennsylvania. Robert assists landowners and royalty owners in the negotiation of new oil and gas leases as well as modifications to existing leases. Robert also negotiates surface use agreements and pipeline right-of-way agreements on behalf of landowners. Robert also advises and counsels clients on complex lease development and expiration issues, including the impact and effect of delay rental and shut-in clauses, as well as the implied covenants to develop and market oil and gas. Robert also represents landowners and royalty owners in disputes arising out of the calculation of production royalties and the deduction of post-production costs. Robert also assists landowners with oil and gas title issues and develops strategies to resolve and cure such title deficiencies. Robert also advises clients on the interplay between oil and gas leases and solar leases and assists clients throughout Pennsylvania in negotiating solar leases.
Brendan A. O'Donnell
Brendan O’Donnell is a highly qualified and experienced attorney in the Oil and Gas Law practice. He also practices in our Environmental and Energy Practice. Brendan represents landowners and royalty owners in a wide variety of matters, including litigation and trial work, and in the preparation and negotiation of:
- Leases
- Pipeline right of way agreements
- Surface use agreements
- Oil, gas and mineral conveyances
