Who Owns Shale Gas? PA Superior Court Decision Creates Uncertainty

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As many property owners throughout Pennsylvania Marcellus Shale counties have learned in recent years, ownership of the surface does not necessarily include ownership of what lies below. Title to the surface and subsurface can be “severed”; that is, owned by different parties. In fact, it is not uncommon to now find different parties owning the mineral, coal, oil, gas and surface rights to the same property. A recent decision by the Pennsylvania Superior Court raises, but does not resolve, significant questions about that historic ownership model.??

For the last 130 years, Pennsylvania lawyers have relied on the Pennsylvania Supreme Court’s decision in Dunham v. Kirkpatrick, source of the so-called “Dunham rule.” Simply stated, it holds that a conveyance of “mineral rights” is presumed to not include “oil and gas rights.” In other words, a deed conveying mineral rights does not include the right to extract oil and gas. Subsequent decisions further strengthened the Dunham rule, holding gas rights as separate and distinct from oil and mineral rights.??

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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