Like it or not, landowners are joined at the hip with the shale drillers who produce the natural gas from their land. When “the price” (which is actually a lot of different prices, depending on geography) of natural gas is high, everyone is in tall cotton. But when the price tanks, as it has over the past few months, every suffers. PA landowners are noticing very thin royalty checks. The big bone of contention is when drillers look to share more of their pain with landowners by claiming post-production deductions.
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Category: Lease & Royalty Payments
PA Fed Judge Won’t Dismiss Landowner Royalty Case Against Range
Last October MDN brought to your attention a lawsuit filed by a Washington County, PA couple, Robin and Thomas Pflasterer, against Range Resources (see Range Resources Sued by PA Landowner re Post-Production Deductions). The Pflasterers maintain Range deducted post-production expenses not allowed under their lease. Range argued the Pflasterers didn’t have the proper paperwork to back up their claims and asked for the case to be dismissed.
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EQT Drops WV Lawsuit re Post-Prod. Deductions on Flat Rate Leases
The new leadership at the top of EQT continues to have a major impact on the company and its relationship with landowners and (in this case) entire states. Last year EQT launched an effort to overturn WV’s Senate Bill (SB) 360 (see EQT Still Fighting WV Minimum Royalty Law for Flat Rate Leases). The new SB 360 law disallows post-production deductions for flat rate leases, ensuring landowners receive a minimum 12.5% royalty. In April 2018 EQT sued to overturn the original law (from 1982) on which SB 360 rests–the law that guarantees a 12.5% royalty. Get rid of the original law, and the later law (disallowing deductions) disappears too. Last week EQT filed a motion to withdraw its lawsuit.
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Fed Court OKs OH Class Action Royalty Lawsuit Against Cheseapeake
In 2017 a group of Ohio landowners did what others had previously done in Pennsylvania, Texas and elsewhere–they filed a proposed class action lawsuit against Chesapeake Energy claiming Chessy had screwed them and about 1,000 other Ohio landowners out of a collective $30 million in royalty payments (see OH Landowners File Royalty Class Action Lawsuit Against Chesapeake).
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Federal Judge Approves EQT $53.5M WV Class Action Settlement
In February MDN brought you the news that EQT had settled a class action lawsuit in West Virginia with landowners and rights owners ending EQT’s practice of post-production deductions from royalty checks (see EQT Settles WV Class Action Royalty Lawsuit for $53.5M). EQT agreed to pay $53.5 million into a settlement fund that will disburse payments to each individual litigant–unless they elect to opt out of the settlement and continue on with a private lawsuit against EQT. Courts take a looooooooooong time to do anything, including putting a stamp of approval on this settlement.
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More Royalty Theft by PA DCNR – Streambeds Leased for $497K
The Pennsylvania Dept. of Conservation and Natural Resources (DCNR) is grabbing more money that we think belongs to private landowners. This time from leasing land underneath the Youghiogheny River and Little Pine Creek. DCNR has leased 124.2 acres for a signing bonus of $496,800 (or $4,000 per acre). Plus the state’s customary royalty rate of 20% on anything produced. And no, the state does not allow post-production deductions–they get their full 20% royalty.
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Fed Judge Reverses Class Action in PA Landowner Lawsuit v. Shell
A notable development in a lawsuit that before now, we were unaware of. Several landowners in Venango County (northwest PA) filed a lawsuit against Shell’s SWEPI drilling subsidiary in 2013 claiming SWEPI had stiffed them out of lease bonus payments due under duly signed lease contracts. The landowners attempted to turn the lawsuit into a class action, claiming the same thing had happened for about 300 leases in the area. A federal judge has just ruled against converting the lawsuit into a class action.
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BlackGold Finds Blue Gold in Ohio Utica Royalty Investment
Investment firm BlackGold Capital Management announced late last week it has purchased Overriding Royalty Interests (ORRI) in the Utica shale of Ohio from an unnamed seller. We have a guess as to who did the selling.
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PA Commonwealth Court Keeps Chesapeake Royalty Lawsuit Alive
In December 2017, a Bradford County, PA judge turned down Chesapeake Energy’s attempt to wiggle out of a royalty lawsuit on a technicality (see Bradford County, PA Judge Keeps Chesapeake Royalty Lawsuit Alive). However, the judge punted the case to a higher court, Commonwealth Court, to settle what he calls “novel questions of law”–rather than spending more time and money on such issues at the county court level. On Friday Commonwealth Court ruled…
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PA Floats Bill to Allow Shale Drilling to Span Multiple Units
Some Pennsylvania landowners have recently been approached by the companies they’re leased with, asking landowners to sign amended leases to allow cross-unit drilling. We personally know of one case in which a driller requested such an amendment in northeast PA. So it is with great interest we notice a new bill has been introduced in the PA House, specifically to allow cross-unit shale drilling.
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PA Landowners Beg US Supreme Court to Hear Atlantic Sunrise Case
A group of Pennsylvania landowners from Lancaster County are begging the U.S. Supreme Court to hear a case in which they say they’ve been screwed over by Atlantic Sunrise Pipeline.
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Fed Court Says WV Driller Doesn’t Have to Produce Gas to Keep Lease
We spotted a write-up on a recent court decision coming from the U.S. Court of Appeals for the Fourth Circuit in which a West Virginia landowner had a signed Marcellus lease requiring PetroEdge (later Statoil) to drill three wells on or under their property. And yet the courts have sided with the driller, essentially allowing the driller to wiggle out of the terms of the lease.
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EQT Settles WV Class Action Royalty Lawsuit for $53.5M
In 2013 some 10,000 West Virginia landowners/rights owners filed a class action lawsuit against EQT over their practice of post-production deductions from royalty checks. The lawsuit was scheduled to go to trial last November, but at the last minute, it didn’t. Word leaked that EQT had settled out of court (see EQT Avoids Trial, Settles WV Class Action re Royalty Deductions). Since that time we haven’t heard a peep–until this morning when EQT announced the terms of a “tentative” settlement.
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“Rule of Capture” Briefs Filed w/PA Supreme Court in Briggs Case
In November the Pennsylvania Supreme Court agreed to hear a case, Briggs v. Southwestern Energy, that is hands-down the most important court case to ever happen regarding the Marcellus Shale in PA. And no, we’re not exaggerating. A blizzard of briefs by Southwestern and those supporting Southwestern were filed earlier this week.
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Columbia Sues Southwestern Energy for Shorting Royalties in WV
Here’s an interesting twist on the theme of drillers shorting leaseholders out of royalty money. Usually such cases involve drillers claiming post-production deductions from landowner royalty checks. This time the landowner/rightsholder is Columbia Gas Transmission (pipeline company owned by midstream giant TransCanada), and the claim is that Southwestern Energy (driller) is not paying royalties for gas produced but not actually sold.
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PA AG Will Continue Chesapeake Royalty Lawsuit in Bradford Co.
Pennsylvania’s Democrat Attorney General, Josh Shapiro, held a public meeting last night in Towanda (Bradford County), PA to talk about the state’s now three-year-old lawsuit against Chesapeake Energy, a lawsuit alleging the company has shafted landowners out of gas royalty money.
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