Chesapeake Energy | Energy Companies | Epsilon Energy | Industrywide Issues | Litigation | Pennsylvania | Susquehanna County
Epsilon Sues Chesapeake to Drill 4 Marcellus Wells, Court Overrules
Epsilon Energy concentrates most of its effort on the Marcellus in Susquehanna County, PA. Epsilon doesn’t typically do its own drilling. The company joint venture partners with (gives money to) other companies, like Chesapeake Energy, and the other company typically does the drilling. Epsilon, according to its website, owns ~4,000 net acres in the PA Marcellus. Epsilon sued Chesapeake Energy earlier this month over lack of access to drill wells on acreage Chesapeake says it doesn’t want to drill. A Texas bankruptcy court judge has tossed Epsilon’s lawsuit. Looks like bankruptcy is a “get out of your contracts for free” card for Chesapeake.
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Whether or not drilling companies have the right to deduct post-production expenses (processing the gas, pipeline transportation, etc.) has raged for more than a decade here in the Marcellus/Utica. Even if landowners have ironclad, very specific language in the contract prohibiting post-production deductions from royalties, some companies (*cough* Chesapeake Energy *cough*) still find ways to claim deductions anyway, leading to expensive and years-long lawsuits that benefit the lawyers more than anyone else. A decision in a recent Texas Supreme Court case gives landowners in the M-U some hope.
In May 2020 the Pennsylvania Supreme Court heard oral arguments in a case challenging whether or not the state Attorney General’s office has the right to use a consumer protection law to prosecute companies like Chesapeake Energy and Anadarko over royalty payment shenanigans (see 
In a brilliant move aimed at boxing in the Delaware River Basin Commission (DRBC), two northeastern Pennsylvania State Senators–Gene Yaw and Lisa Baker–along with members of the PA Senate Republican Caucus (27 Senators in all), filed a lawsuit in January against the DRBC accusing the quasi-governmental agency of “taking” the property rights of PA residents without just compensation under the law (see 
When Equitrans’ 303-mile Mountain Valley Pipeline, which will connect West Virginia and bountiful supplies of Marcellus/Utica gas to southern Virginia (eventually beyond), is finally done, will Equitrans send a bill to the odious Sierra Club and other Big Green groups that have intentionally held up the project *for years* with a blizzard of frivolous lawsuits? Frivolous lawsuits holding up the MVP project have had very real costs. For example, Equitrans’ “all-in” cost to ship an Mcf of gas through the pipeline (when it finally is in-service) has doubled because of the delays. We think Equitrans should sue the litigious enviro groups to recover the escalating cost they will pay. Let’s put the Sierra Club out of business.
All the wheels have officially come off the cart for a proposed $346 million pipeline project in northeastern Virginia called the Header Improvement Project. Virginia Natural Gas (VNG) filed a plan last December to build the Header Improvement Project, 24 miles of new pipeline and two new compressor stations (expanding a third compressor) connecting to the mighty Transco pipeline system to flow Marcellus/Utica gas to the northeast Virginia region (see 
In July 2018 three radical environmental groups dropped their objections to permits the Pennsylvania DEP previously granted for the Mariner East 2 Pipeline. Clean Air Council, Mountain Watershed Association, and THE Delaware Riverkeeper “settled” their appeal of 20 permits issued to Sunoco for the ME2 project (see 
Williams, via its wholly-owned subsidiary Transcontinental Gas Pipe Line (Transco), has filed a lawsuit against Mountain Valley Pipeline (a competitor) over MVP’s plan to extend the pipeline an extra 75 miles from southern Virginia into North Carolina. Williams claims some of the land MVP wants to use under eminent domain crosses into Transco’s easements and building MVP so close to Transco may damage Transco’s pipeline and the cathodic anti-corrosion system that protects it.
Earlier this week the Ohio Supreme Court expanded on one of its prior rulings concerning the Ohio Marketable Title Act (MTA) to try and make things a little bit clearer concerning previously severed mineral rights (severed from surface rights). What is at stake in the MTA is whether surface rights owners can regain possession of mineral rights by using the MTA–at least in some cases. Indeed they can, but certain rules must be obeyed.
Gulfport Energy continues to try and wiggle out of legally-signed and binding long-term contracts with multiple pipeline companies, including deals that move Marcellus/Utica gas through the Rover and Rockies Express (REX) pipelines. Last year the Federal Energy Regulatory Commission (FERC) told Gulfport a very loud NO in breaking those contracts (see 
Last August the North Carolina Dept. of Environmental Quality (DEQ) rejected a water permit for Equitrans’ proposed Mountain Valley Pipeline (MVP) Southgate project (see 
The good news for Equitrans’ 303-mile Mountain Valley Pipeline (MVP) is that the U.S. Court of Appeals for the Fourth Circuit last week overruled North Carolina’s Dept. of Environmental Quality in rejecting a water permit for the project (see today’s lead story). However, MVP wasn’t letting last year’s DEQ action slow it down. In January MVP reluctantly filed eminent domain lawsuits against 100 landowners who refuse to reasonably negotiate an easement for the pipeline.