Pennsylvania Supreme Court

2012

• T.W. Phillips Gas and Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. Mar. 26, 2012) (affirming the order of the Superior Court that, the phrase “in paying quantities” must be construed with reference to an operator's good faith judgment, so marginal or sporadic production where profits did not exceed operating costs for a one-year period did not terminate the lease).
  • Concurring Opinion (joining the majority in affirming the Superior Court's order but refraining from analyzing if the Appellees acted in good faith).
  • Dissenting Opinion (would have remanded back to the Superior Court using a two part test examining the well’s profitability, and the lessee's good-faith judgment).
  • Prior History: T.W. Phillips Gas and Oil Co. v. Jedlicka, 964 A.2d 13 (Pa. Super. Ct. Dec. 29, 2008) (finding that in the absence of bad faith on part of the well operator, a well is producing “in paying quantities” even if producing minimally or at a loss for a single year).
    • Agricultural Law Brief (Jan. 2009) 

2010

• Kilmer v. Elexco Land Servs., Inc., 990 A.2d 1147 (Pa. Mar. 24, 2010) (defining “royalties” in Pennsylvania’s Guaranteed Minimum Royalty Act, 58 P.S. § 33, to include post-production cost offsets).
  • Case Summary
  • Agricultural Law Brief, Apr. 2010.
  • Prior History: Order granting extraordinary jurisdiction
  • Prior History: Kilmer v. Elexco Land Services, Inc., No. 2008-57, slip op. (Susquehanna Ct. Com. Pl. Mar. 16, 2009). 

2009

• Belden & Blake Corp. v. Pa. Dep’t of Conservation & Natural Res., 969 A.2d 528 (Pa. Apr. 29, 2009) (applying the Chartiers standard for subsurface owner access to surface lands controlled by the Pennsylvania Department of Conservation and Natural Resources).
  • Dissenting Opinion (concluding that the Chartiers standard is a blanket rule which is inappropriate).
  • Case Summary
• Huntley & Huntley, Inc. v. Borough Council of Oakmont, 964 A.2d 855 (Pa. Feb. 19, 2009) (ruling that the ordinance’s “overall restriction on oil and gas wells in R-1 districts” was not preempted by the Oil and Gas Act).
  • Case Summary
  • Agricultural Law Brief, March 2009.
  • Prior History: Huntley & Huntley, Inc. v. Borough Council of Oakmont, 929 A.2d 1252 (Pa. Commw. Ct. July 27, 2007).
    • Agricultural Law Brief, May 2008.
  • Additional Information: George Asimos, Pennsylvania Supreme Court Decision Opens Valves To Zoning Power Over Natural Gas Production (Saul Ewing, LLP) (Feb. 2009).
• Range Res.-Appalachia, LLC v. Salem Twp., 964 A.2d 869 (Pa. Feb. 19, 2009) (ruling that the municipality’s ordinance had been preempted by the Oil and Gas Act).
  • Case Summary
  • Agricultural Law Brief, March 2009.
  • Prior History: Great Lakes Energy Partners v. Salem Twp., 931 A.2d 101 (Pa. Commw. Ct. Aug. 9, 2007).
    • Agricultural Law Brief, May 2008.
  • Additional Information: George Asimos, Court Limits — But Did It Preclude? — Municipal Regulation of Natural Gas Drilling Operations (Saul Ewing, LLP) (Feb. 2009).  

Selected Cases Prior to 2009

• Caldwell v. Fulton, 31 Pa. 475 (1858) (“Coal and minerals in place are land. It is no longer to be doubted that they are subject to conveyance as such”).
• Chartiers Block Coal Co. v. Mellon, 25 A. 597 (Pa. 1893) (owning mineral rights provides that owner with the right to occupy as much of the surface estate as might be necessary, exercising this right with due regard to the surface estate owner).
• Dunham v. Kirkpatrick, 101 Pa. 36 (1882) (articulating “Dunham’s Rule,” which states that a reservation of “all minerals” in a deed does not include oil).
• Indep. Oil & Gas Ass’n of Pa. v. Bd. of Assessment Appeals, 814 A.2d 180 (Pa. Dec. 19, 2002) (oil and gas interests not subject to real estate taxation by counties not specifically included in real estate).
  • Prior History: Indep. Oil & Gas Ass’n of Pa. v. Bd. of Assessment Appeals, 780 A.2d 795 (Pa. Commw. Ct. July 13, 2001).
• Jacobs v. CNG Transmission Corp., 772 A.2d 445 (Pa. May 29, 2001) (“Thus, so long as the lessee continues to pay the landowner for the opportunity to develop and produce oil or gas, the lessee need not actually drill wells”).
  • Case Summary
• Silver v. Bush, 62 A. 832 (Pa. 1906) (applying “Dunham’s Rule” to natural gas).
• U.S. Steel Corp. v. Hoge, 468 A.2d 1380 (Pa. Dec. 22, 1983) (owner of coal rights holds title to methane within coal seam).
• Westmoreland & Cambria Natural Gas Co. v. Dewitt, 18 A. 724 (Pa. 1889) (articulating rule of capture in regard to oil and gas: “If an adjoining, or even distant, owner, drills his own land, and taps your gas, so that it comes into his well and under his control, it is no longer yours, but his”).
• Young v. Forest Oil Co., 45 A. 121 (Pa. 1899) (summarizing that if a well is producing in paying quantities if it pays a profit over operating expenses).