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:

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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 review: Read more ›

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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 regions, royalty class actions and surface rights disputes took center stage. Here’s your week in review:

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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:

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Oil and Gas Update for 3/24/2017 – Trump Derails Obama Clean Power Plans, PA Judge Green Lights Marketing Covenant Claim, and Pooling Clause Woes for Ohio Well Operators.

Commodity prices remained relatively flat since our last report despite another healthy bump in the national rig count.  President Trump delivered on a promise to begin the process of rolling back clean energy and climate change initiatives of the Obama Administration by issuing his “Energy Independence” Executive Order.  In Appalachia, a federal judge addressed implied duties in oil and gas leases in the context of a claim alleging breach of the marketing covenant while a Pennsylvania appellate court and a court of appeals in Ohio issued curious decisions that seem to cut against well-understood rules of interpreting oil and gas leases.  Elsewhere, a Michigan Court of Appeals blessed an order authorizing operators targeting the Antrim Shale to operate wells under vacuum over objections that the recovery technique might infringe on correlative rights over others within the “common pool.”  Here’s your week in review:

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Oil and Gas Update for 3/17/2017 – As Natural Gas Prices Slightly Rise, Trump’s Budget Cuts Hit EPA Hard and Sabine Rejection Doesn’t Survive District Court Appeal.

Natural gas spot prices continued to climb since our last report alongside a healthy rig count that gained another 21 units nationally, but oil prices still ended up around $50/bbl at the end of a less volatile week. The Trump Administration’s proposed budget cuts grabbed headlines, including a whopping $2.6 billion cut to EPA’s share of the pie.  In Appalachia, PADEP’s Secretary wrote a forceful letter to EPA Secretary Pruitt deriding the budget cuts while the courts wrangled with issues ranging from eminent domain restrictions on storage operators in Pennsylvania and limitations on forfeitures of oil and gas leases in Ohio.  In other regions, the latest decision in the Sabine saga affirms the ability to reject certain gathering agreements under Section 365 of the Bankruptcy Code.  Here’s your week in review:

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Oil and Gas Update for 3/10/2017 – Amidst Sliding Oil Prices, TX Supremes Tackle Paying Quantities and POTUS asks SCOTUS to Wait on WOTUS.

Natural gas spot prices climbed modestly since our last report amidst a rising rig count and fledgling oil prices that dipped below $50/bbl on the West Texas index for the first time this year before inching up at week’s end.  Things are relatively quiet in Appalachia but the Texas Supremes weighed in on a case involving a claim that a well failed to produce in “paying quantities” under the familiar Clinton v. Koontz standard and Trump asks SCOTUS to hold off on deciding the prior administration’s “Waters of the United States” rule given his recent executive order that seeks to dial back on that rule.  Here’s your week in review:

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Oil and Gas Update for 3/3/2017 – Natural Gas Spot Prices Still Sliding, New EPA Chief Stalls Prior Administration’s Oil/Gas Methane Reduction Crusade; TX Supremes Toss Groundwater Contamination Claims

The Henry Hub continues to underwhelm since our last report, rising modestly after dropping to its lowest point since mid-November 2016.  In Appalachia, a court of appeals in Ohio says landmen need a broker’s license to lease oil and gas rights in order to recover disputed payments for services.  Elsewhere, Trump’s EPA rolls back prior information requests issued by the Obama Administration for data to evaluate proper methane reduction regs for existing oil and gas sites, drawing cheers from state governments and jeers from environmental groups.  In other news, the Texas Supremes confirmed that the statute of limitations bars old groundwater contamination claims while a federal court in Virginia says a royalty agreement under Wyoming law is subject to rejection in bankruptcy.  Here’s your week in review

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Oil and Gas Update for 2/17/2017 – PADEP Pipeline Approvals, Trump’s Rollback of Energy Related Regs, and Earthquakes in the Utica

The Henry Hub dipped below $3 for the first time in several months alongside a rig count that climbed 10 more units nationwide since our last report, despite a fragile but steady oil price hovering at around $55/bbl.  In Appalachia, PADEP issued several key permit authorizations for the Marine East 2 and PennEast pipeline projects and has its eyes set on low-level microseismic activities attributed to zipper frac jobs in the Utica.  In other news, Trump’s controversial pick for EPA chief survives a bumpy nomination process amidst rollbacks of energy-related regulations by Congress and the President under the infrequently invoked Congressional Review Act.  Here’s your week in review:

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Oil and Gas Update for 2/10/2017 – PA Governor Proposes Severance Tax – Again – while Rover Pipeline Initiates Condemnation Proceedings in WV and OH Federal Courts

The Henry Hub is on a gradual slide, but that hasn’t stifled the rig count, climbing an additional 12 units since our last report alongside a relatively steady oil price.  In Appalachia, Governor Wolf proposed another severance tax to fill budget gaps by approximately $215 million while Rover Pipeline invokes eminent domain authority for a FERC-approved project designed to move Appalachian gas.  Here’s your week in review:

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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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Cozen O’Connor Blogs