Oil + Gas Update | PUC ALJ Rules on Mariner East; TX Supremes Enforce Stipulation in Lessee Boundary Fight.
Natural gas spot prices in Appalachia climbed slightly largely due to colder temperatures and export demands while the rig count jumped up a few units alongside rising oil prices. In pipeline news, an administrative law judge said Sunoco does not have to shut down Mariner East as requested by homeowners along the pipeline route but should pay a fine and communicate better with the public about safety. In Appalachia court news, a federal judge denied a summary judgment bid in a pooling dispute. In other regions, a federal judge in Arkansas officially asked the state supremes for guidance on whether royalty claims should be time-barred if filed after a statutory limitations period while the Texas Supreme Court addressed a lease boundary dispute between adjacent lessees.
Here's your week in review:
Rig Counts, Spot Prices + Oil Prices
Rigs: National (439); Marcellus (29); Utica/Point Pleasant (10)
Brent Crude: $66.80/bbl
West Texas Intermediate: $63.17/bbl
NYMEX: May 2021 @ $2.618/MMBtu
Spot Prices: Henry Hub ($2.60/MMBtu); Dominion South ($2.05/MMBtu); Tenn. Zone 4 ($1.97/MMBtu)
WOPL - Appalachia
Mariner East. An administrative law judge says Sunoco didn’t communicate well with the public and should do so in the future along with taking other additional safety precautions but denied the main request to stop Mariner East construction. Access the lengthy decision here.
Headlines & Holdings - Appalachia
Federal Court in WV Punts on Summary Judgment in O+G Pooling Dispute. A federal court in West Virginia denied a lessee's bid for summary judgment in a case in which lessors claim that the lessee had no express or implied pooling authority to include the leased premises in a unit and therefore owed royalties on a lease rather than unit (pro rata) basis, holding that royalty payments accepted by the lessors did not necessarily operate as a ratification or waiver of lessor's rights to complain without further development of the record. Wells v. Antero Resources Corp., --- F. Supp. 3d ---, No. 1:20CV9, 2021 WL 1520000 (N.D.W. Va. Apr. 16, 2021).
Headlines & Holdings - Beyond Appalachia
Ark. Fed. Court Asks State Supremes for Guidance on SOL for O+G Royalty Claims. As promised in a previous opinion noted last week, a federal court in Arkansas issued its order certifying the following question to the Arkansas Supreme Court in an oil + gas royalty dispute: "In the oil and gas leases at issue in this case, does the five-year statute of limitations set forth in Arkansas Code section 16-56-111(a) bar Plaintiffs from bringing a breach of contract lawsuit for alleged underpayments of monthly royalties that occurred within the statute of limitations period because similar underpayments of monthly royalties took place outside of the limitations period?" Pennington v. BHP Hilliton Petroleum (Fayetteville) LLC, --- F. Supp. 3d ---, No. 4:20-CV-00178-LPR, 2021 WL 1396299 (E.D. Ark. Apr. 12, 2021).
Bankr. Court in TX Says Compression for Production is Operator's Burden under Election Agreement. A bankruptcy court in Texas held that a debtor/non-operator did not bear the burden of downstream compression charges incurred by the operator to increase production, rejecting the operator's arguments that the non-operator/debtor had the obligation to cure the JOA it assumed in bankruptcy by making those payments and holding instead that a separate production election and marketing agreement only burdened the non-operator/debtor with flat fee charges for gathering, not compression. In re: Legacy Reserves Operating, --- B.R. ---, No. 9-33401, 2021 WL 1395880 (Bankr. S.D. Tex. Apr. 12, 2021).
TX Supremes Say Stipulation Governs O+G Leasehold Boundary Dispute. The Texas Supreme Court concluded that a boundary stipulation between mineral owners is valid and enforceable against their respective lessees and therefore precludes claims that one lessee/defendant drilled wells on the other lessee/plaintiff's side of the line, rejecting the plaintiff's claim that the well locations violated Railroad Commission rules and holding that the plaintiff/lessee ratified the boundary stipulation. Concho Res., Inc. v. Ellison, --- S.W.3d ---, No. 19-0233, 2021 WL 1432222 (Tex. Apr. 16, 2021).
* * *
Add experienced industry counsel to the legal team
without breaking the budget.
Learn more about +lawyer | (oil+gas) services @ GA BIBIKOS LLC,
designed with in-house counsel in mind.