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Oil and Gas Update for Week Ending 9/1/2017 – Hurricane Harvey Drives Oil, Nat Gas Prices Up and Down; PADEP Releases 2015 Methane Emissions Data from Oil/Gas Ops; Pipeline Projects Facing Challenges

After a brief hiatus we are back at the well. Since our last report in early August, Hurricane Harvey ravaged southeastern Texas, affecting oil, natural gas, and gasoline prices all over the country. In Appalachia, the PADEP issued the 2015 numbers for methane and other emissions from oil and gas sources, pointing to a modest increase in methane emissions from oil and gas sources despite significant increases in operation and production alongside significant decreases of other emissions. In other news, pipeline project sponsors in Appalachia and elsewhere continue to face challenges in pursuit of their state and federal approvals, gaining ground with agencies on permit applications while facing challenges from environmental and other groups. The struggle may continue as a result

Posted in Weekly Updates

Oil and Gas Update for Week Ending 7/28/2017 – PA Senate Floats Severance Tax, Permit Reforms, as Part of Ongoing PA Budget Negotiations.

Natural gas spot prices in Appalachia took a nose dive since our last report despite the rig-count rebound and rising oil prices.  In Pennsylvania, the Senate Republicans introduced a severance tax to raise approximately $100 million in revenue in order to close budget gaps in exchange for regulatory reforms designed to hasten actions on permit applications submitted to the Pennsylvania Department of Environmental Protection for approval. In other news, a court of appeals in Texas busted a Permian Basin lease in part based on a retained-acreage provision that didn’t cover non-operational areas on the leased premises while a federal judge in Kansas kept a royalty class action in federal court under the Class Action Fairness Act. Here’s your weekly roundup:

Posted in Weekly Updates

Oil and Gas Update for Week Ending 7/21/2017 – PA Supremes on the Environmental Rights Amendment, Third Circuit on “Buyers for Value” in Bankruptcy Claim Proceedings, and ND Supremes on Pore Space Ownership.

After a few weeks off we’re back at the well. The national rig count dipped two units last week for the first time in a long time while oil and natural gas prices increased slightly. Since our last report, the Pennsylvania Supreme Court issued its long-awaited decision in Pennsylvania Environmental Defense Fund v. Commonwealth in which the state’s highest court scrapped a longstanding test for determining violations under the state’s Environmental Rights Amendment.  The Third Circuit was also busy issuing decisions on a wide range of topics while a federal court in Kentucky interpreted “oil and gas” as used in a farmout agreement as excluding NGLs for purposes of royalty payment obligations. In North Dakota, the state’s highest court held that a surface

Posted in Weekly Updates

Oil and Gas Update for Week Ending 6/16/2017 – PAPUC Issues Annual Report on Natural Gas Impact Fees.

Oil and natural gas spot prices continued their downward trend since our last report with the Henry Hub dipping below $3 for the second straight week, spot prices in Appalachia dipping below $2, and oil prices hovering around $44/bbl. In Appalachia, the Pennsylvania Public Utility Commission issued its annual report demonstrating that the state collected more than $173 million from impact fees from natural gas producers, although the total dropped about $15 million from 2015.  In other news, a bankruptcy judge denied a claim to hundreds of millions of dollars in royalties based on a division order.  Here’s a roundup of the past several weeks: About The Author

Posted in Weekly Updates

Oil and Gas Update for Week Ending 6/9/2017 – WV Supremes Endorse Net-Back Method for Calculating Royalties and Post-Production Costs; TX Supremes Confirm County-Wide Mineral Grant.

Sliding oil and natural gas spot prices didn’t affect a steady rig count that climbed several more units since our last report.  In Appalachia, the West Virginia Supreme Court signaled a departure from the controversial “marketable product” rule for interpreting royalty clauses and the allocation of post-production costs, at least with respect to certain older leases subject to a state permitting statute that requires an upgrade from a flat-rate royalty clause to a production royalty clause as a condition of getting a drilling permit.  In other news, the Texas Supremes confirmed a county-wide mineral grant despite prior rulings that deeds with conflicting language conveying specific parcels along with all mineral interests within a county created an ambiguity.  Here’s a roundup

Posted in Weekly Updates

Oil and Gas Update for Week Ending 5/26/2017 – PA Production Up, Drilling Down; TX Surface Owner’s Ability to Authorize Horizontal Drilling Through Severed Mineral Estate; Fifth Circuit Interprets Risk Penalty Provisions in LA Forced Pooling Statue.

Natural gas spot prices dropped since our last report despite rising oil prices and more rigs nationally and regionally.  In Pennsylvania, the PADEP issued its annual report for oil and gas operations indicating an increase in production despite the fewest well permits and wells drilled since 2008.  In other news, PADEP Secretary McDonnell can drop the “Acting” label from his title following a unanimous state senate vote to confirm his permanent appointment as the agency’s leader.  At the federal level, the D.C. Circuit hit the pause button on legal challenges to Obama-era rules targeting methane emissions from new oil and gas sources following the Trump Administration’s vow to review the rule as part of a planned overhaul of federal regulatory

Posted in Weekly Updates

Oil and Gas Update for Week Ending 5/5/2017 – Attacks on Class Arbitration for Royalty Litigation in PA, TX Supremes Block Lease Busting Attempt, and TX Appellate Court Addresses Conveyance of Mineral vs. Royalty Interests

Oil prices based on the Brent Crude and West Texas Intermediate indices dropped significantly since our last report while natural gas spot prices rose slightly.  The national rig count remains steadily climbing except that the count in the Marcellus/Utica region dropped for the first time in several months.  In other news, oil and gas lessees go on the attack to send class actions to individual arbitration in Appalachia while Texas courts address lease busting attempts and the confusion over conveyances of mineral interests vs. royalty interests.  Here’s your week in review: About The Author

Posted in Weekly Updates

Oil and Gas Update for Week Ending 4/28/2017 – CPP Litigation on Hold, “Fraction Of” Royalty Interests in North Dakota, and a Challenge to PADEP Permit Conditions for Injection Wells.

After a few weeks off, we are back at the well.  Natural gas and oil prices are down since our last report and the rig count in the Marcellus/Utica regions remains flat despite the increase in rig activity nationwide.  In Appalachia, a well operator challenged PADEP’s permit conditions purportedly designed to address possible seismic activities in connection with injection wells, and the Superior Court rejects the “stranger rule” for interpreting deeds reserving oil and gas interests for a husband and wife.  Elsewhere, the D.C. Circuit put the Clean Power Plan litigation on hold given the Trump Administration’s commitment to review and possibly rescind regulations, and the North Dakota Supreme Court addresses “fraction of” royalty interest disputes. Here’s your week in

Posted in Weekly Updates

Oil and Gas Update for 4/7/2017 – MD Bans Hydraulic Fracturing, OH DMA Cases Keep Trickling In, and Spot Prices Pull a Hat Trick in Appalachia.

All three benchmarks for natural gas spot prices in Appalachia hit $3/MMBtu or more since our last report (and did so for the first time in a long time), trending alongside a spike in oil prices following the Syrian airstrike and a rising rig count. In Appalachia, the Ohio courts addressed several issues under the state’s Dormant Mineral Act while a federal court in Pennsylvania scrapped a township’s curious constitutional claims against a private oil and gas company that challenged the local government’s bid to ban UIC wells by local ordinance. Meanwhile, the Governor of Maryland signed a bill banning hydraulic fracturing within the state’s borders in anticipation of a multi-year moratorium that is set to expire in October. In other

Posted in Weekly Updates

Oil and Gas Update for 3/31/2017 – Commonwealth Court Addresses Stripper Wells and Impact Fees, Federal Judge Tosses $4.2 Million Verdict in High Profile Water Well Contamination Case.

The Henry Hub inched past $3/MMBtu since our last report alongside another increase in the national rig count and a tiny uptick in oil prices.  In Appalachia, the Commonwealth Court issued a decision on whether and when certain marginal (“stripper”) wells are subject to the state’s impact fee while a federal magistrate judge tossed a controversial $4.2 million verdict against a well operator and ordered a new trial after finding insufficient evidence that the operator contaminated the plaintiffs’ private water supply and deriding the behavior of the plaintiffs’ lawyer.  Here’s your week in review: About The Author

Posted in Weekly Updates
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At the Well Weekly
Welcome to At the Well Weekly, a blog designed for busy folks in the oil and gas industry. If you haven’t read a thing during the week, our hope is that you can breeze through the update and be up to speed on the basics such as current rig counts, commodity prices, and case law updates on legal issues of interest in Appalachia and elsewhere.
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