At the Well Weekly (v.4.10.2026)
- George A. Bibikos
- 8 hours ago
- 12 min read
Oil + Gas Update: Royalties "At the Well"; Climate Change; and Mineral Disputes Lead Spring 2026 Docket.
Since our last report, oil prices plunged roughly 12% amid cautious optimism surrounding US-Iran negotiations, while natural gas fell to a 17-month front-month low near $2.65/MMBtu on mild spring weather, record-high domestic production, and a robust early injection season. The national rig count edged lower, with the Marcellus/Utica combined count holding steady for a third straight week.
In pipeline and regulatory developments, courts addressed pipeline easement access, gathering agreement breaches, and emergency maintenance rights.
In Appalachia, courts addressed general partner liability for oil and gas lease obligations; statutory pooling vs. pooling clauses; deed construction and mineral ownership; trespass-by-frac and the rule of capture; affirmative defenses and expert reports in royalty class actions; arbitration; privilege in oil and gas insurance coverage disputes; regulatory takings and drilling through coal seams; and other lease claims.
In other regions, courts addressed temporary cessation and lease expiration in bankruptcy; JOA obligations; lease expiration and paying quantities; submerged-lands title; double-fraction NPRI interpretation; fixed vs. floating royalty interests; frac water contracts; wellhead royalty valuation; gathering contract disputes; offshore emissions regulations; drilling setback preemption on federal lands; Winter Storm Uri; climate change claims; and natgas bans.
Rig Counts, Spot Prices + Oil Prices
Rig Counts, Spot Prices + Oil Prices
Rigs: National (🔻545); Marcellus (25); Utica/Point Pleasant (12)
Brent Crude: 🔻~$96.00/bbl
West Texas Intermediate: 🔻~$95.50/bbl
NYMEX: May 2026 @ 🔻~$2.65/MMBtu; 12-Month Strip @ 🔻~$3.57/MMBtu
Spot Prices: Henry Hub @ 🔻~$2.90/MMBtu; Appalachian Regional Avg. @ 🔻~$1.50/MMBtu
U.S. Natural Gas Storage: 1,911 Bcf (+50 Bcf injection, national)
Headlines & Holdings - Appalachia
Fed. Ct. in Pa. Says Shell General Partner on the Hook for O+G Lease Obligations. In a royalty dispute, a federal court in Pennsylvania held that Shell Energy – a former general partner of SWEPI LP – is still on the hook for lease obligations of SWEPI LP despite the lack of contractual privity with plaintiffs. Walney v. Shell Legacy Holdings, LLC, --- F. Supp. 3d ----, No. 1:13-CV-102, 2026 WL 693092 (W.D. Pa. Mar. 12, 2026); Warner v. Shell Legacy Holdings, LLC, --- F. Supp. 3d ----, No. 1:19-CV-326, 2026 WL 709683 (W.D. Pa. Mar. 13, 2026).
Ohio Appellate Court Says Pooling Clause does not Limit Statutory Pooling. In a lease interpretation dispute, an Ohio appellate court held that a lease provision allowing the operator to create units of up to 160 acres did not prohibit the operator from seeking statutory unitization under Ohio R.C. 1509.28 for a larger unit, because the lease is silent on statutory unitization and silence does not constitute a restriction. Chervenak Family Trust v. Ascent Resources–Utica, LLC, 2026-Ohio-886, 2026 WL 734980 (Ohio App. Mar. 13, 2026).
Ohio App. Ct. Says Trial Court Should Examine Root of Title Deeds. In a mineral rights dispute under the Ohio Marketable Title Act, an Ohio appellate court reversed a judgment on the pleadings, holding that the trial court erred by analyzing only the most recent qualifying root of title deed rather than examining all potential root of title deeds between the severance deed and the most recent qualifying deed to determine whether the mineral interest had been extinguished. Chestnut Ridge 156 LLC v. Miller, Case No. 25 JE 0012, 2026 WL 819058 (Ohio Ct. App. Mar. 27, 2026).
W. Va. Supreme Court Says Deed Conveyed O+G, not just Surface Estate. In a property ownership dispute, the West Virginia Supreme Court affirmed lower court rulings that a deed within the chain of title referring to a prior conveyance lacked sufficient detail to create an express reservation of the mineral estate and therefore the conveyance was not limited to the surface only. Wells v. Antero Res. Corp., --- S.E.2d ----, No. 23-758, 2026 WL 820713 (W. Va. Mar. 24, 2026).
Fed. Ct. in Ohio Grants TRO Protecting Pipeline Company’s Easement Access. In a pipeline easement dispute, a federal court in Ohio granted a temporary restraining order ensuring a natural gas pipeline operator’s access to its recorded easement for time-sensitive maintenance and repair work after the landowner consented to access during an informal court conference. Tex. E. Transmission, LP v. Keenan, --- F. Supp. 3d ----, No. 1:26-CV-288, 2026 WL 832300 (S.D. Ohio Mar. 25, 2026).
Ohio Ct. App. Says Mineral Interest Preserved Under Marketable Title Act. In an oil and gas ownership dispute, an Ohio appellate court held that a severed mineral interest was preserved under the Marketable Title Act because the root of title deed and every deed in the chain of title contained a near-verbatim recitation of the original mineral reservation at issue along with a citation to the volume and page number of the severance deed. Whitney v. Baker, 2026-Ohio-1035, 2026 WL 836411 (Ohio 7th Dist. Ct. App. Mar. 27, 2026).
Ky. Ct. App. Scraps Landowner Lease Claims. In an oil and gas lease dispute, a Kentucky appellate court affirmed the dismissal of a pro se landowner’s complaint against lessees holding oil and gas leases on her property, finding that the landowner abandoned all claims except breach of contract and failed to cite any contractual provisions, include the leases in the record, to state a claim. Steele v. EQT Corp., --- S.W.3d ----, No. 2019-CA-1268-MR, 2026 WL 844771 (Ky. Ct. App. Mar. 27, 2026).
Md. Supremes Say Federal Law Preempts Climate Claims. In a climate change tort action, the Maryland Supreme Court held that state common law claims brought by local governments against multinational oil and gas companies to recover damages from global greenhouse gas emissions are displaced by federal common law, which is itself displaced by the Clean Air Act, and that the claims independently fail to state viable causes of action under Maryland law. Mayor & City Council of Balt. v. BP P.L.C., --- A.3d ----, No. 11, Sept. Term, 2025, 2026 WL 809501 (Md. Mar. 24, 2026).
Fed. Ct. in D.C. Says EPCA does not Preempt D.C. Gas Appliance Ban. In a case involving local laws banning natural gas appliances, a federal court in Washington, D.C., held that the Energy Policy and Conservation Act does not preempt the District of Columbia’s Clean Buildings Act, which requires certain new or improved buildings to operate as zero-energy and effectively bans gas appliances in those structures, because the local law does not regulate the energy efficiency or energy use standards of the appliances themselves. Nat’l Ass’n of Home Builders v. District of Columbia, --- F. Supp. 3d ----, No. 24-CV-02942 (ACR), 2026 WL 837674 (D.D.C. Mar. 26, 2026).
Fed. Ct. in Md. Says EPCA does not Preempt County’s All-Electric Building Law. In a case involving local laws banning natural gas appliances, a federal court in Maryland held that the Energy Policy and Conservation Act does not preempt Montgomery County’s Bill 13-22, which mandates all-electric construction for new buildings, because the bill does not regulate “energy use” at the “point of use” and therefore falls outside EPCA’s preemption provision. Nat’l Ass’n of Home Builders v. Montgomery County, --- F. Supp. 3d ----, No. 8:24-CV-03024-PX, 2026 WL 817322 (D. Md. Mar. 25, 2026).
Pa. Cmwlth. Ct. Says DEP Permit Authorizing Drilling through Coal is not an Taking. The Pennsylvania Commonwealth Court upheld an EHB determination that DEP’s issuance of permits to an oil and gas operator to drill wells through a landowner’s coal seams did not constitute an unconstitutional taking of property, reasoning that the plaintiffs are engaging in other economically beneficial and productive uses by entering into an oil and gas lease with the lessee even if the coal estate is compromised as alleged. Douglas Scott v. Dep’t of Env’t Prot. & Rice Drilling B LLC, --- A.3d ----, No. 672 C.D. 2024, 2026 WL 899947 (Pa. Cmwlth. Apr. 2, 2026).
Fed. Ct. in WV Scraps Aff. Defenses but Denies MSJ Bid in O+G Royalty Class Action. In a royalty class action, a federal court in West Virginia granted summary judgment for the plaintiff class on the vast majority of the lessee’s affirmative defenses but denied the plaintiffs’ bid for summary judgment on the merits, holding that the lessee did not have an opportunity to respond to a supplemental expert report on damages. Romeo v. Antero Resources Corp., --- F. Supp. 3d ----, No. 1:17-CV-88, 2026 WL 883040 (N.D.W. Va. Mar. 31, 2026); Romeo v. Antero Resources Corp., --- F. Supp. 3d ----, No. 1:17-CV-88, 2026 WL 880819 (N.D.W. Va. Mar. 31, 2026).
Fed. Ct. in WV Says Working Agreement Requires Arbitration of O+G Lease Claims. In royalty dispute, a federal court in West Virginia relied on an arbitration clause in a separate “Working Agreement” governing operations on the property to compel arbitration of the lease claims, incorporating the Working Agreement into the parties’ lease and further holding that the lessee did not waive arbitration by litigating the case for a time in federal court. Gains v. Antero Resources Corp., --- F. Supp. 3d ----, No. 1:24-CV-99, 2026 WL 881189 (N.D.W. Va. Mar. 31, 2026).
Fed. Ct. in PA Says Some Docs Privileged in O+G Coverage Row. In an insurance coverage dispute for claims arising out of oil and gas operations, a federal court in Pennsylvania concluded that some pre-coverage-denial communications with in-house and outside coverage attorneys only involve ordinary business decisions on coverage claims and therefore are not work product or protected by attorney-client privilege, reasoning that “when attorneys serve a dual role in representing Defendant, the attorney-client privilege would only extend to communications prepared while they acted as legal counsel, but not to their work in processing and denying Plaintiff's claim.” Schlumberger Tech. Corp. v. First Mercury Ins. Co., --- F. Supp. 3d ----, No. 4:22-CV-01465, 2026 WL 881918 (M.D. Pa. Mar. 31, 2026).
Ohio Supremes Say Deed Reserving “Coal or Other Minerals” Excludes Oil and Gas. In a quiet title action, the Ohio Supreme Court held that a 1953 deed reserving “all the coal below the horizon of the No. 8 coal … and other minerals, with the right to mine and remove such coal or other minerals of any vein” unambiguously does not include oil and gas, because the reservation clause’s use of mining-specific terms – “mine,” “remove,” “vein,” and references to underground mining methods – makes clear that the grantor intended to reserve only solid minerals and not oil and gas. Faith Ranch & Farms Fund, Inc. v. PNC Bank, Nat’l Ass’n, --- N.E.3d ----, 2026-Ohio-1145, 2026 WL 926937 (Ohio Apr. 2, 2026).
Third Circuit Tosses Briggs 2.0. In a second trespass-by-frac case brought by the same plaintiffs as in the landmark PA case regarding the rule of capture, the Third Circuit upheld a summary judgment in favor of a well operator accused of draining the plaintiffs’ property, holding that (a) a ratification of an oil and gas lease by plaintiffs’ mother during the year frac operations began foreclosed plaintiffs’ trespass claims; (b) the lease authorized the very activities plaintiffs alleged constituted a continuing trespass and conversion; (c) plaintiffs’ repudiation argument rested on a misreading of a 2015 correspondence and is largely irrelevant because plaintiffs did not sue for breach of contract; and (d) plaintiffs failed to adduce sufficient evidence that SWN actually injected proppants on or under their land. Briggs v. Southwestern Energy Prod. Co., --- F. App’x ----, No. 25-2174, 2026 WL 962497 (3d Cir. Apr. 9, 2026).
Headlines & Holdings - Beyond Appalachia
Fifth Circ. Says No O+G Lease Expiration for Debtor’s Temporary Cessation. In a bankruptcy proceeding, the Fifth Circuit held that a bankruptcy debtor’s temporary 40-day cessation of production did not cause its mineral leases to automatically expire, and therefore not obligated for an administrative expense claim brought by lessors, even though the debtor did not also begin and diligently pursue new drilling or reworking operations within 120 days from the initial cessation date. In re EP Energy E&P Co., --- F.4th ----, 2026 WL 673829 (5th Cir. Mar. 10, 2026).
Tex. Ct. App. Says Other WI Owners not Obligated to Pay Royalty Owners under JOA. In a royalty dispute, a Texas appellate court held that a JOA’s terms did not obligate working interest owners to pay royalties directly to other mineral lessors because they lack privity of estate with working-interest owners and they are not third party beneficiaries under the JOA. Evans Resources, L.P. v. Petroplex Energy, Inc., --- S.W.3d ----, No. 11-24-00192-CV, 2026 WL 691885 (Tex. App.—Eastland Mar. 12, 2026).
Tex. App. Ct. Rejects Lease-Busting Bid. In a lease expiration case, a Texas appellate court held that two oil and gas leases continued in full force and effect after their primary terms expired because the lessee as a prudent operator maintained continuous production in paying quantities under the standards in Clifton v. Koontz, 325 S.W.2d 684 (Tex. 1959), and remanded for further proceedings on a retained-acreage claim. Zarvona Energy LLC v. Black Stone Minerals Co., --- S.W.3d ----, No. 09-25-00012-CV, 2026 WL 696915 (Tex. App.—Beaumont Mar. 12, 2026).
Tex. App. Ct. Addresses Title to Submerged Lands. In a dispute over title to submerged lands, a Texas appellate court held that oil, gas, and saltwater production solely caused land subsidence as opposed to natural causes such that private owners, not the state, have title to the submerged lands in question. Buckingham v. Edwin Arnaud, Inc., --- S.W.3d ----, No. 09-24-00142-CV, 2026 WL 696914 (Tex. App.—Beaumont Mar. 12, 2026).
Tex. Supremes Say 1/8th Means Numerical 1/8th in Double-Fraction Dispute. In a dispute over NPRIs, the Texas Supreme Court held that a 1951 deed’s language — “1/128 (1/16 of the usual 1/8 royalty)” — unambiguously conveyed a fixed 1/128 interest rather than a floating 1/16, because the deed’s plain language used “1/8” in its ordinary numerical sense and not as a term of art such that the proponent rebutted the Van Dyke presumption under Texas law that a reference to 1/8 in an antiquated mineral conveyance is a shorthand referring to the entire interest. Clifton v. Johnson, --- S.W.3d ----, No. 23-0671, 2026 WL 705763 (Tex. Mar. 13, 2026).
Tex. Supremes Say Frac Water Buys did not Breach Water Contract Exclusivity Clause. In a contract dispute over a fracking water supply agreement, the Texas Supreme Court reversed a $26 million judgment against Equinor Energy, holding that Equinor did not breach the contract’s exclusivity clause when it purchased water from other suppliers for its oil wells because those wells fell outside the clause’s contractual scope. Equinor Energy LP v. Lindale Pipeline, LLC, --- S.W.3d ----, No. 24-0425, 2026 WL 705761 (Tex. Mar. 13, 2026).
Tex. App. Ct. Says Deed Reserved Floating Royalty Interest. In a fixed vs. floating royalty dispute, a Texas appellate court held that a deed reserved a floating three-fourths NPRI rather than a fixed 3/32 interest, reasoning that the grantor did not use the “usual one-eighth royalty” in the numerical sense such that the Van Dyke presumption applies. Hoffman v. Thomson, --- S.W.3d ----, No. 04-19-00771-CV, 2026 WL 758737 (Tex. App.—San Antonio Mar. 18, 2026).
Fed. Ct. in D.C. Says BOEM’s Offshore Emissions Rule Is Not Arbitrary or Capricious. In a challenge to federal offshore oil and gas emissions regulations, a federal court in D.C. granted summary judgment for the Bureau of Ocean Energy Management, holding that environmental groups had standing to challenge a 2020 final rule that rolled back a regulatory overhaul in 2016 but failed to show that the agency’s 2020 rule violated the the APA. Healthy Gulf v. Bureau of Ocean Energy Mgmt., --- F. Supp. 3d ----, No. 1:24-CV-02175 (TNM), 2026 WL 799420 (D.D.C. Mar. 23, 2026).
Cal. Fed. Ct. Denies Fed’s Bid to Enjoin New Setbacks in Cali. on Fed Lands. In a case in which the federal government is challenging as preempted California’s SB 1137, which prohibits new oil and gas drilling within 3,200 feet of so-called “sensitive receptors,” a federal court in California denied a bid to enjoin the effect of the legislation on federal land, holding that the government failed to demonstrate a likelihood of success on its Supremacy Clause and Property Clause claims because the state law is an environmental regulation and not a land-use regulation for purposes of finding preemption. United States v. State of California, --- F. Supp. 3d ----, No. 2:26-CV-00107-DC-SCR, 2026 WL 878702 (E.D. Cal. Mar. 31, 2026).
N.M. Fed. Ct. Says Kinder Morgan Must Face Winter Storm Uri Claims. In a class action arising from Winter Storm Uri, a federal court in New Mexico green-lighted claims by natural gas consumers alleging that Kinder Morgan and its affiliate engaged in unfair trade practices, tortious conduct, and unjust enrichment by manipulating natural gas storage during the February 2021 winter storm. Woldman v. Kinder Morgan, Inc., --- F. Supp. 3d ----, No. 1:25-CV-00159 DHU/JHR, 2026 WL 884823 (D.N.M. Mar. 31, 2026).
Tex. Supremes Say “Free of Cost” Royalty Valued at the Well. In a royalty dispute, the Texas Supreme Court held that a 1960 deed reserving a nonparticipating royalty interest in minerals “produced from the above described acreage,” payable “free of cost forever,” establishes a royalty calculated at the wellhead — not at a downstream point of sale — because the deed’s plain language identifies production at the well as the valuation point and contains no language shifting valuation to processed gas sold downstream; the “free of cost forever” clause merely restates the default rule that royalties are free of exploration and production costs and does not, standing alone, transform the royalty into one on enhanced, downstream products. Fasken Oil & Ranch, Ltd. v. Puig, --- S.W.3d ----, No. 24-1033, 2026 WL 969268 (Tex. Apr. 10, 2026).
Tex. Biz Ct. Reduces $200M Award against Gathering Co. In a gathering contract dispute, the Texas Business Court held after its second ever bench trial that a shipper/production company did not suffer compensable damages when a gathering company entered agreements with a third-party shipper for use of a 67-mile gathering pipeline moving shale gas in West Virginia because the third party did not deliver gas under new contracts at the time of trial but ordered the gathering company to offer the production company any applicable service fee reduction. Antero Resources Corp. v. Stonewall Gas Gathering LLC, No. 24-BC11A-0027 (Tex. Bus. Ct., 3d Div., Apr. 2, 2026).
Ninth Circ. Tosses Kids’ Challenge to EPA's GHG Discounting. In a dispute brought by children challenging as discriminatory the EPA’s practice of “discounting” the future costs and benefits of GHG emissions in its cost-benefit analyses, the Ninth Circuit upheld the dismissal of that lawsuit and held that the children lacked standing because their alleged environmental injuries are not traceable to the government's discounting methodology, characterizing the plaintiffs’ theory as “sprawling and speculative” and noting that the plaintiffs’ legal theories had “deep, fundamental flaws” that did not meet strict requirements for bringing a claim in federal court; and dismissing the case without leave to amend. Genesis B. v. EPA, --- F.4th ----, No. 25-2473 (9th Cir. Apr. 10, 2026).
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