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Pennsylvania Supreme Court


  • 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).



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).
  • 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”).
  • 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).