UPCOMING EVENTS

SEMINARS FOR SEPTEMBER 2017

MONROEVILLE
Tuesday, September 12, 2017
2:00PM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

MURRYSVLLE / DELMONT
Tuesday, September 12, 2017
7:00 PM
Holiday Inn Express
Delmont/Murrysville
6552 Route 22
Delmont, PA 15626
Behind Lamplighter Restaurant on Rt. 22

MURRYSVLLE / DELMONT
Thursday, September 14, 2017
2:00 PM
Holiday Inn Express
Delmont/Murrysville
6552 Route 22
Delmont, PA 15626
Behind Lamplighter Restaurant on Rt. 22

MONROEVILLE
Thursday, September 14, 2017
7:00 PM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

MONROEVILLE
Saturday, September 16, 2017
9:30 AM
The Estate Planning Centers
3824 Northern Pike, Suite 801B
One Monroeville Center
Monroeville, PA 15146
Just west of Red Lobster on Rt. 22

 
 

 
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Proudly serving clients throughout Allegheny, Westmoreland, Butler, Fayette, and Washington Counties; including Pittsburgh, Monroeville, Greensburg, Latrobe, Cranberry, Wexford, Sewickley and YOUR community.

Marcellus Shale: Recent Cases Effecting Landowners

As the importance of the Marcellus Shale formation in the development of our region’s economic recovery becomes evident, it is not surprising that unanticipated questions about how the money from these natural gas deposits is handled are arising. Two cases with unanticipated results, and potentially wide ranging impact, have emerged in recent months from the Pennsylvania appellate courts.
 
In the most recent case, Butler v. Powers Estate, 2011 Pa.Super. 198 (Pa.Super.Ct., Sept. 7, 2011), the PA Superior Court held that gas in the Marcellus Shale might actually be a part of the mineral rights to property, rather than part of the typical gas rights. The outcome of this case could have significant impact for those property owners who own some, but not all, rights to the land.  This issue comes down to whether or not the gas obtained by the process of fracking shale is a release of gas trapped inside a mineral deposit.  The Court didn’t have enough information to make a final ruling on the issue, and sent the case back to the trial court to develop expert testimony on the issue. We will likely have to wait more than a year to see the outcome of this matter.
 
The second case presents the PA Supreme Court’s effort to side with property owners against gas developers who don’t move forward with gas production.   In Hite v. Falcon Partners, 197 WDA 2010 (Pa., Jan. 4, 2011), the court was faced with the question of whether a gas company can keep a property owner’s gas rights locked up for years by paying an annual delay-in-production payment. Relying heavily on “public policy” grounds (legal speak for “this is how we want this case to turn out”), the Supreme Court of Pennsylvania held that the delay-in-production payment was only valid for the initial term of the lease (one year), and because Falcon didn’t commence production, the lease agreement expired.  The result in this case may have been different if the lease explicitly stated that gas wells need not be drilled, which the Supreme Court has indicated may be sufficient to demonstrate the parties’ contemplation that development of the gas may not occur. (Jacobs v. CNG Transmission, 772 A.2d 445 (Pa. 2001)). The lesson from Hite is that the gas companies may not be able to sit on their lease rights without production for extended periods merely by paying delay-in-production amounts under the lease.
 
Marcellus Shale leases can bring enormous economic gain, but landowner’s must recognize that they have important legal and financial rights and obligations which are being handled far too frequently by non-lawyers using “fill in the blanks” documents.  The gas companies have a team of lawyers on their side. Who is on yours?