Allegheny Twp Leases Under Tredway Trail to Olympus for $2,200/Ac
These days we don’t often see the contract details for new leases signed by landowners to allow shale drilling. We used to see and report on large landowner coalitions and the deals they had struck back in the earlier days of the Marcellus/Utica. But today, about the only time you get any kind of insight into deal amounts comes when municipalities lease land for drilling, given that the business dealings of a municipality must be disclosed publicly. We’re always on the lookout for such deals. Allegheny Township in Westmoreland County (near Pittsburgh) has just approved a shale lease with Olympus Energy to drill under (not on) 27.7 acres of the Tredway Trail. The terms of the deal are…
Read More “Allegheny Twp Leases Under Tredway Trail to Olympus for $2,200/Ac”
We have chronicled a number of companies that buy royalty and/or mineral rights from landowners in the Marcellus/Utica over the years (see our previous stories about royalty mineral rights sales 
A press release issued yesterday announced the partnership between an Appalachian driller we aren’t familiar with, Oil Well Shares (OWS), and Canada-based OYA Renewables to form a joint venture called Chrysalis Energy. The new company will use OWS’s 1.5 million leased acres across Pennsylvania, Ohio, and West Virginia to build solar farms, wind farms, and “energy storage infrastructure projects.” We have some thoughts about this partnership and how it may impact landowners.
A court case decided in late April in Pennsylvania Superior Court appears (to us) to have significant ramifications for landowners and drillers with respect to deducting post-production expenses. The case is Dressler Family, LP v. PennEnergy Resources, LLC (copy of the decision below), and it addresses “market enhancement” royalty clauses found in many PA leases. Market enhancement clauses typically prohibit the deduction of post-production costs that are incurred when transforming gas into a marketable form. Some drillers ignore such clauses and deduct all “post-production costs” from the landowner’s royalty based on the drillers’ incorrect assumption that gas is “marketable” at the wellhead. This case and decision helped clear up definitions of what is and is not marketable gas.
According to law firm Houston Harbaugh, P.C., deducting fuel costs from landowner royalties continues to be an ongoing and widespread practice. Some leases allow the use of a portion of the raw gas recovered at a well to “fuel” well-pad operations (processing of the gas). Not only are landowners denied a royalty on the fuel gas volume, they also have that same “cost” deducted from their production royalty! According to Houston Harbaugh, this practice of deducting fuel costs must be closely monitored by all landowners.
An oil and gas mineral lease is a critical part of the process for extracting and selling hydrocarbon molecules. MDN editor Jim Willis will present at next week’s 
A group of roughly 60 landowners located in Fayette County, PA, have received a $5.5 million settlement from what was Chief Exploration and Development (now called Cyprus Exploration and Development) to compensate the landowners for leases signed in 2008. The landowners filed a class action lawsuit in 2011, claiming bonus and rent payments were not made.
EnergyNet
In June, MDN told you about the merger of Falcon Minerals Corporation and Desert Peak Minerals (see 
The same old issue keeps returning in Pennsylvania for landowners and rights owners. The Pennsylvania Minimum Royalty Act guarantees payments to all rights owners of at least 12.5% of the value of the produced gas. Yet contracts signed by many landowners allow for post-production deductions, and those deductions sometimes (often?) result in landowners receiving less than 12.5% in royalty payments. This issue has been a thorn of contention between landowners and drillers for years–two groups that are normally allies. Farmers/landowners from several western PA counties gathered yesterday at the Washington County Farm Bureau’s annual legislative meeting to discuss, among other issues, minimum royalties.
The only thing the so-called Pennsylvania Environmental Defense Foundation (PEDF) “defends” is their own twisted philosophy of trying to gouge out the eyes of the oil and gas industry in PA–even at the expense of de-funding their own beloved PA Dept. of Conservation and Natural Resources (DCNR). In two PA Supreme Court rulings, one in 2017 and another in 2021, PEDF won the right to limit how revenues from oil and gas drilling on state land can be used. The PA legislature reworded its budget directives and began using those revenues to fund day-to-day expenses at DCNR. PEDF sued again. Commonwealth Court rejected PEDF’s arguments against how the legislature allocated the money, and two weeks ago, the PA Supreme Court upheld Commonwealth Court’s rejection. Translation: PEDF just lost a major case they’ve been waging since 2017 to block drilling on state-owned land (by blocking how royalty revenue is used).
In July, MDN told you about the newest chapter of the National Association of Royalty Owners (NARO), the Ohio chapter (see 
In July 2018, a group of 100+ southwestern Pennsylvania landowners sued EQT for failure to pay them rental fees for storing natural gas under their properties (see 
This is one of those more bizarre court cases we’ve heard about. In April 2021, MDN reported that a group of West Virginia landowners/rights owners filed a claim against EQT, alleging the company had allowed leases to lapse, then at a later date, reentered their property and drilled new wells without permission (see 
A few days ago MDN received a phone call from the Harrisburg Patriot-News, from a reporter asking editor Jim Willis for comments on the latest activity in the Pennsylvania Marcellus. Are royalties doing better? Has there been more drilling activity? Jim tackled the question about drilling activity this way: Yes, there has been a *slight* increase in drilling activity, but not a huge increase. The reporter talked with multiple sources and published an article yesterday.