The Oil and Gas Addendum

If an individual owns the surface of property but not the oil and gas underneath that has been leased to an oil and gas driller, how much power does the surface owner have to restrict drilling operations on the surface of the land? The Pennsylvania Superior Court recently addressed this issue in its July 1, 2026 precedential decision in Pennesi v. DL Resources, Inc., 2026 PA Super 139 (Pa. Super. Ct. 2026). There, the Superior Court held that an oil and gas owner's right to use and develop the surface of property must be based on “strict necessity” if there is no express authorization to use that surface. The Court held that an oil and gas owner without an express surface easement must prove that its use of the surface is strictly necessary, not merely convenient, before any inquiry begins about the reasonableness of the conduct on the surface.

On first glance, Pennesi appears to rewrite the relationship between the owner of the surface and the owner of subsurface coal, oil and gas by elevating the rights of the surface owner and diminishing the subsurface owners’ rights. The question is whether Pennesi charts a new course or whether it is consistent with a body of law that has largely sat dormant for decades.

What Happened in the Pennesi Case?

The Pennesi case dispute involves a roughly 54-acre tract in Unity Township, Westmoreland County. The Wells family, who owned both the surface of the property along with its oil and gas, signed a lease in 1959. That lease granted the driller full surface rights. The 1959 lease stated that it was leased "for the sole and only purpose of mining and operating for oil and gas and of laying of pipe lines and of building tanks, powers, stations and structures thereon." Through assignments, that 1959 lease eventually became vested in a different driller, DL Resources, Inc.

The 54-acre property was split over time. In 1976, John Zomisky bought 41.02 acres of surface, along with the oil and gas under that acreage. In 1982 he sold two 2-acre lots — one to the Pennesis, one to a predecessor of the Mazzoni parties. Those deeds conveyed the oil and gas under those 2-acre parcels. Then, in January 1997, Zomisky sold a 13.58-acre parcel to Michele Pennesi. In that deed, Zomisky "EXCEPT[ED] AND RESERV[ED] oil and gas" to himself. This is a common occurrence in Pennsylvania, creating a “severed estate”. However, that deed said nothing about any right to use the surface of the 13.58 acres to produce the reserved oil and gas. Later, Pennesi sold 6.175 of those surface acres to Mazzoni and Zoppetti.

In 2006, DL Resources drilled three wells on the old 54-acre Wells leasehold, known as the William Wells 1, 2 and 3 wells. One of those wells, William Wells 2, together with its access road, gathering lines and brine tanks, sits on the 13.58-acre parcel whose surface that had been conveyed to Pennesi (and partially later to Mazzoni and Zoppetti) but whose oil and gas had been excepted by Zomisky.

Then, in 2023, DL Resources surrendered the 1959 lease. In its place, DL Resources took a new lease, dated March 1, 2023, from Zomisky and the owners of the other parcels carved from the old Zomisky land. That new lease used essentially the same language as the old 1959 lease form; it used the same granting language and the same 54-acre description (even though the leasehold was smaller). The big difference between the 1959 lease and the 2023 lease was not in the text; it was the rights of the individual lessors who signed the lease.

Whereas the Wells family members who signed the 1959 lease owned both the surface of the 54 acres and the oil and gas under that 54 acres, that was not the case with the lessors under the 2023 lease. While the 2023 lessors owned all of the oil and gas that was leased, they did not own all of the surface above the oil and gas. The Pennesis and the Mazzoni parties, who owned 13.58 acres of surface, were asked to join the new lease, but declined. 

With the old 1959 lease gone and the 2023 lease in its place without the signatures of some surface owners, the Pennesis and their neighbors filed a declaratory judgment action in June 2023 to challenge the oil and gas surface development on their 13.58 acre property. That challenged the presence and operation of the Wells #2 well and its associated infrastructure, which was on the surface of that property. While that well had been drilled under the 1959 lease, whose lessors owned both surface and subsurface rights, that 1959 Lease had been surrendered and was no longer operative. Yet, the Wells #2 gas well was still being operated on that surface by DL Resources.

What Did the Court of Common Pleas Decide?

The Court of Common Pleas of Westmoreland County granted summary judgment to the driller, DL Resources. Citing Chartiers Block Coal Co. v. Mellon, 25 A. 597 (Pa. 1893) and Belden & Blake Corp. v. Commonwealth, Department of Conservation and Natural Resources, 969 A.2d 528 (Pa. 2009), the trial court concluded that the owner of oil and gas beneath a surface needs no express right to drill and operate a well. The oil and gas owner's use of the surface must be necessary and exercised with due regard for the surface owner; and if the surface owner thinks the use has gone too far, the burden is on the surface owner to prove it unreasonable.

The Pennesi landowners had not tried to prove that any particular use of their land was unreasonable — their position was that DL Resources had no right to be on the surface at all without proving a strict necessity to be there. The landowners reasoned that DL Resources could not do this because the gas under the 13.58 acres could be reached from elsewhere, where DL Resources had express surface rights. The trial court rejected that position, reasoning that Belden & Blake speaks of reasonableness, not strict necessity, and that requiring the driller to prove necessity "would place the burden on the subsurface owner" contrary to Belden & Blake's allocation.

Did the Superior Court Agree?

The Superior Court reversed course. It did not treat the dispute as one involving a surface owner who was trying to restrict oil and gas development. It agreed with the trial court that a subsurface owner does not need express words of grant to access its subsurface estate. However, the Superior Court disagreed that the oil and gas owner's rights were as broad as the trial court concluded and vacated the summary judgment that the trial court entered in favor of DL Resources.

The heart of the Superior Court's Opinion is a distinction that the trial court did not address — the difference between an express right to use the surface and an implied right. Where a party owns the oil and gas and the surface, that party has the express right to use the surface to develop the oil and gas. If a party owns the oil and gas and obtains approval to access the surface to develop that oil and gas, then that party has the express right to use the surface and the agreement governs the nature and extent of that surface use. But, if a party owns the oil and gas and does not acquire an express right to use the surface, the oil and gas owner must fall back on what the law calls an implied right-of-way by necessity to use and access the surface in order to develop the subsurface resources.

The Pennesi court explained that an implied right-of-way requires that the surface and the subsurface estates (1) once shared a common owner, (2) that they were divided by a conveyance, and (3) that the subsurface owner's use of the surface be strictly necessary to reach the subsurface minerals, both at the moment the estates were divided and at the moment the subsurface owner seeks to exercise the right. Strict necessity is different than convenience. It is a much higher burden. In the Pennesi court's view, if there is no express right to use the surface, then it is only after the subsurface owner demonstrates a strict necessity to use the surface that an implied right-of-way can be found. And, only after that is established does the more familiar question of reasonableness of that surface use arise.

For its "necessity" requirement, the Pennesi court relied on a number of historical decisions that addressed surface rights versus subsurface rights. It  also heavily incorporated the Pennsylvania Supreme Court's 2019 decision in Bartkowski v. Ramondo, 219 A.3d 1083 (Pa. 2019), which was not a subsurface rights case but which held that "strict necessity" does not demand proof of literal impossibility, but does require something well beyond added expense or inconvenience.

Applying that framework to the facts developed in the trial court, the Superior Court in Pennesi concluded that summary judgment had been entered too early. Under the 2023 lease, DL Resources holds express surface rights over the 23.44 acres whose owners signed the lease as both surface and subsurface rights owners. Two of the existing wells, the William Wells 1 and 3, already sit on that acreage.

If the oil and gas beneath the Pennesi/Mazzoni/Zoppetti parcels can be reached from those wells, or from new wells on land where DL Resources has express surface rights, then the William Wells 2 well that is located on the surface of the Pennesi/Mazzoni/Zoppetti property is a convenience rather than a necessity. In that case, no implied right-of-way supports that well’s presence. If the oil and gas beneath the Pennesi/Mazzoni/Zoppetti property cannot be reached except from the surface of that 13.58 acres, then an implied right-of-way exists. At that point,the inquiry turns to whether the use of that surface by DL Resources is reasonable. Since the necessity examination did not take place, the Pennesi court reasoned that summary judgment was premature and that the factual record had to be further developed.

Is Pennesi a Departure From Existing Law?

The Superior Court’s Pennesi decision does not conflict with long-established Pennsylvania law. But, it gets particular attention for two reasons. First, it was not looking at a future well development. The Superior Court’s reasoning suggested that an existing gas well may have to be plugged if it is not necessary to the development of gas from the parcel. Second, it has a different focus than Belden & Blake, which was the last major surface versus subsurface rights decision from the Pennsylvania Supreme Court.

That does not mean, however, that Pennesi is at-odds with Belden & Blake or prior Pennsylvania precedent. In Belden & Blake, the Commonwealth owned the surface of a state park, the gas company owned the oil and gas beneath it. When the driller company gave notice of its intent to drill, the Commonwealth did not deny its right of access, but instead sought to impose conditions on the use. The Supreme Court's Opinion expressly noted that the gas company's right to enter was "a right that is not contested," and its holding matched that posture: a surface owner cannot unilaterally attach conditions to a conceded access right, and the burden falls on the surface owner to seek redress against an unreasonable use.

In context, Belden & Blake focused on reasonableness because the necessity of entry was not in dispute. But, as the Pennesi court explained, the necessity prong is the foundation of the analysis. That is a principle that goes back to Chartiers Block Coal, where the Supreme Court wrote that a subsurface owner “. . . would have the right, without any express words of grant for that purpose, to go upon the surface to open a way by shaft, or drift, or well, to his underlying estate, and to occupy so much of the surface beyond the limits of his shaft, drift, or well, as might be necessary to operate his estate, and to remove the product thereof.” Only after this “necessary” entry was established, the Chartiers Block Coal court wrote that “[t]his is a right to be exercised with due regard to the owner of the surface, and its exercise will be restrained within proper limits by a court of equity, if this becomes necessary.”

This two part foundation was applied by Pennsylvania courts in the years after Chartiers Block Coal. In Dewey v. Great Lakes Coal Co., 84 A. 913 (Pa. 1912), the Supreme Court described the subsurface owner's right as reaching so much of the surface "as is strictly necessary and reasonable." A decade later the Court enforced the necessity requirement against a mineral owner in a case with some similarities to Pennesi. In the 1922 case of Friedline v. Hoffman, 115 A. 845 (Pa. 1922), a coal owner whose deed conveyed no express surface rights began sinking a mine shaft on the surface owner's land. The coal could be mined from ground the coal owner already held, but that was "more expensive and less convenient," though commercially feasible. The Supreme Court affirmed an injunction against the coal owner, holding that an implied way to reach minerals exists "only when necessary to give effect to the grant or reservation," and "never merely as a matter of convenience."

What Does This Mean For Oil and Gas Owners and Surface Owners?

At bottom, the Pennesi decision is much more of a restatement of the law than a shift in the relationship between surface owners and the owners of subsurface rights, like oil, gas and coal. The Superior Court affirmed that there is no outright prohibition on oil and gas development on severed surface and the decision does not elevate the surface estate above the subsurface estate. A subsurface owner who genuinely has no other practical way to reach its oil and gas will still obtain an implied right-of-way, and once that right exists, Belden & Blake still governs its exercise — the use must be reasonable, and the burden of challenging it still falls on the surface owner.

What Pennesi revives is that necessity of entry is a real, substantive prong in the analysis. The subsurface estate's access to the surface is not automatic; it is conditional. And the condition is not a “check the box” formality. It obligates the party seeking to occupy land it holds no express right to occupy to demonstrate strict necessity to be in that location. This revival and restatement of a long-dormant necessity requirement is interesting, and needed, given that the law seemed to be moving away from landowners’ rights.

A likely source of friction under Pennesi would involve horizontal drilling associated with joint development of several properties into pools or units. Since a horizontal well can traverse through the subsurface of multiple properties, its specific tophole location on the surface may be subject to a necessity challenge. Thus, if an individual owns only the surface estate and a well pad site for horizontal wells is proposed to be located on the surface, that surface owner may have greater leverage to resist a driller’s threat that it can enter under the color of a lease that was signed only by the oil and gas owner.

            Another impact of Pennesi for oil and gas owners may be an unwillingness of drillers to surrender a lease in exchange for the execution of a new instrument with modernized terms. Oil and gas leases can remain operative for decades (or centuries). At a certain point, their terms become problematic for both the driller and the royalty owner. In those circumstances, it is not unusual for a lease to be surrendered and a new lease immediately executed over the same oil and gas. But, after Pennesi, that may not happen because drillers may be concerned that the execution of a new oil and gas lease may jeopardize already existing development.

The broader lesson of Pennesi may simply be the recognition that the book on subsurface and surface rights was never finished. The necessity of entry, and then reasonableness of conduct questions have existed since Chartiers Block Coal. But the property-specific nature of oil and gas development compels a case-by-case analysis of those plans. The relationship between those who own the surface and those who own what lies beneath it is once again a live question in Pennsylvania — and both sides of that relationship should be aware of their rights.

Houston Harbaugh's Oil and Gas Practice Group assists landowners and royalty owners throughout Pennsylvania with surface-use disputes, lease negotiations, and title issues like those discussed above. If you have questions about this post, or about a well or production operation on your property, contact Brendan A. O'Donnell at 412-288-2226 or odonnellba@hh-law.com.This post is for informational purposes only and is not intended to, nor should it be relied on to, provide legal advice.