Let’s assume you own 105 acres in Greene County, Pennsylvania. In 2020, you signed an oil and gas lease with ABC Exploration. During the negotiations, you agreed that only those post-production costs which actually...more
5/29/2025
/ Appeals ,
Class Action ,
Commercial Leases ,
Contract Disputes ,
Contract Interpretation ,
Contract Terms ,
Land Owners ,
Leases ,
Mineral Leases ,
Natural Gas ,
Oil & Gas ,
Property Owners ,
Royalties
Let’s assume you own a 175 acre farm in Washington County. Your grandfather acquired the farm back in 1948 from Farmer Brown (the “1948 Deed”). Your grandfather always said that he bought both the surface and oil and gas. In...more
Let’s assume you inherited a 150 acre farm in Lycoming County that has been owned by your family since 1909. In 2020, you are approached by ABC Drilling about a new oil and gas lease for the farm. You retain counsel and...more
1/15/2025
/ Appeals ,
Deeds ,
Land Titles ,
Mineral Leases ,
Mineral Rights ,
Minerals ,
Mining ,
Natural Gas ,
Oil & Gas ,
PA Supreme Court ,
Pennsylvania ,
Popular ,
Property ,
Property Owners ,
Property Ownership ,
Real Estate Transactions ,
Royalties
As we approach the 20th anniversary of the Marcellus Shale play, one issue remains constant: the ongoing debate over the deduction of post-production costs. Landowners all across Pennsylvania have spent countless hours...more
12/20/2024
/ Deductions ,
EAP ,
Land Owners ,
Leases ,
Lessee ,
Lessor ,
Mineral Leases ,
Oil & Gas ,
Postproduction Costs ,
Royalties ,
Well Drilling
Let’s assume you own a 135 acre farm in Tioga County, Pennsylvania. In 2020, you negotiate a new oil and gas lease with XYZ Drilling Company. During the negotiations, you insist on a cost free, no deduction royalty of 17%. ...more
Let’s assume that you purchase a 105 acre farm in Greene County in 2022. You purchase only the surface estate while the seller, Farmer Jones, retains the underlying oil and gas rights. You intend to grow corn and winter...more
9/13/2024
/ Appellate Courts ,
Covenants that Run With the Land ,
Farms ,
Land Owners ,
Leases ,
Mineral Rights ,
Oil & Gas ,
Pipelines ,
Surface Owner ,
Texas ,
Well Drilling
Many oil and gas leases across Pennsylvania allow the driller to divert and use volumes of raw gas to power and fuel production operations both on and off the leasehold. Is a driller obligated to pay a royalty on that volume...more
Let’s assume you own 165 acres in Tioga County. In 2019, you sign a new oil and gas lease with ABC Drilling. You negotiate an 18% net royalty. The royalty clause, however, requires ABC Drilling to calculate the royalty on...more
Since the early 1900’s, your family has owned a 105 acre farm in Greene County, Pennsylvania. In 2024, you and your siblings sign an oil and gas lease with XYZ Drilling Company. The language in the lease states that it...more
3/21/2024
/ Deeds ,
Lease Termination ,
Mineral Leases ,
Oil & Gas ,
Ownership Interest ,
Pennsylvania ,
Popular ,
Property Ownership ,
Railways ,
Royalties ,
Well Drilling
A troubling and confusing issue here in Pennsylvania concerns the ownership of oil and gas rights under roads and highways. For example, let’s assume Farmer Joe owned 115 acres in Greene County. In 1981, Farmer Joe sells...more
The calculation of production royalties and the deduction of post-production costs remains a troubling issue for Pennsylvania landowners. But there is another frustrating and often confusing royalty-related issue which can,...more
Let’s assume you own 136 acres in Tioga County. In 2011, you signed a new oil and gas lease with ABC Production (the “2011 Lease”). The 2011 Lease had a five-year primary term which expired in October 2016. In 2014, ABC...more
The modern producing gas well is a sophisticated and complex piece of equipment. The basic well head itself consists of several meters, valves and other components, each of which is under constant stress and pressure. In...more
Let’s assume you own 95 acres in Greene County, Pennsylvania. In 2019, you signed an oil and gas lease with ABC Exploration. During the negotiations, you agreed that only those post-production costs which actually...more
9/26/2023
/ Deductions ,
Land Owners ,
Leases ,
Lessee ,
Lessor ,
Marcellus Shale ,
Mineral Leases ,
Oil & Gas ,
Pipelines ,
Postproduction Costs ,
Processing Fees ,
Product Enhancements ,
Royalties ,
Shale Gas ,
Well Drilling
Let’s assume you own a 160-acre farm in Washington County. Your father purchased the farm in 1992 from a local farmer named Jones. (the “1992 Deed”). At the time your father purchased the farm, there was an oil and gas lease...more
9/1/2023
/ Contract Termination ,
Deeds ,
Heirs ,
Land Owners ,
Leaseholds ,
Mineral Leases ,
Mineral Rights ,
Oil & Gas ,
Ownership Interest ,
Pennsylvania ,
Royalties ,
Tenancy-At-Will
Let’s assume your grandfather owned 99 acres in Washington County. In 1955, he sells a small portion of the farm to the Commonwealth of Pennsylvania in order to facilitate the construction of new State Route 39. This acreage...more
7/12/2023
/ Contract Terms ,
Deeds ,
Grantors ,
Heirs ,
Highways ,
Land Owners ,
Land Tract ,
Mineral Leases ,
Mineral Rights ,
Oil & Gas ,
Pennsylvania ,
Roads ,
Royalties
Let’s assume you signed a new oil and gas lease with XYZ Drilling in August 2018 (the “2018 Lease”). Your lease contains a “continuous drilling” clause which requires XYZ Drilling to commence a new well within ninety (90)...more
The calculation of production royalties and the deduction of post-production costs remains a controversial topic here in Pennsylvania. As we have written before, there is another frustrating and often confusing...more
5/18/2023
/ Contract Terms ,
Deductions ,
Deeds ,
Grantors ,
Heirs ,
Land Owners ,
Mineral Leases ,
Mineral Rights ,
Oil & Gas ,
Royalties ,
TX Supreme Court
Let’s assume you own 185 acres in Washington County. In 2020, you negotiate a new oil and gas lease with ABC Drilling. During the negotiations, you insist on a “gross royalty” which prohibits the deduction of post-production...more
This is a familiar yet troubling question. Imagine you own 135 acres in Washington County. You have received offers from several oil and gas drillers but have not yet signed a lease. Your neighbor, however, did sign a lease...more
On February 15, 2023, the Pennsylvania Supreme Court agreed to hear the appeal of PennEnergy Resources, LLC in the Dressler Family, LP v. PennEnergy Resources, LLC matter. The Pennsylvania Supreme Court’s review of this...more
An oil and gas lease with a “free gas” clause may be a valuable tool for landowners to push back against drillers’ inaccurate attempts to value gas at the “wellhead”. Prior to the advent of Marcellus Shale drilling, "free...more
As we have written about before, a troubling issue facing landowners in the Marcellus Shale region is the practice of retroactive pooling and unitization. Retroactive pooling and unitization occurs when a driller records an...more
Let’s assume you own 125 acres in Greene County, Pennsylvania. A landman from XYZ Gas Co. approaches you about a new oil and gas lease. The lease purports to grant XYZ Gas Co. exclusive drilling rights to the Marcellus...more
Many Pennsylvania oil and gas leases have what is commonly known as a “market enhancement” royalty clause (“MEC”). These MEC leases typically prohibit the deduction of any post-production costs that are incurred transforming...more