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residential property, but that is property used as the tenant’s residence; not for oil and gas leases on the lessor’s residence. Withholding is optional for payments of less than $5,000 a year, but the risk is on the payor. The payor is liable for the tax on all payments from which withholding should be made. For additional information including the timing of payment obligations see the Pennsylvania Department of Revenue’s Informal Notice Personal Income Tax 2017-01 Issued December 2017-01.
Glenn A.W. Thompson focuses his practice in the area of energy and oil and gas law, assisting clients in Pennsylvania and North Dakota with oil, gas and mineral title issues by overseeing the delivery of oil and gas [mineral] title opinions in most major
shale plays. Email: glenn.thompson@steptoe-johnson.com
North Dakota Legal Update
By: Kimberly A. Backman
North Dakota Supreme Court Determines Oil and Gas Leases Cover All of Lessors’ Mineral Interests
In Hallin v. Inland Oil & Gas Corp., 2017 ND 254, 903 N.W.2d 61, the North Dakota Supreme Court interpreted the provisions contained in certain oil gas leases and held that the leases covered all of the lessors’ interest in the oil and gas in the leased lands, regardless of the fact that they were only paid bonus consideration for a portion of their oil and gas interests in those lands. Joan Hallin, John Hallin and Susan Bradford (collectively, “Hallin”) executed oil and gas leases to Inland Oil & Gas Corporation (“Inland”) covering “all that certain tract of land situated in Mountrail County” which consisted of a 160 acre tract. At the time the leases were executed, Hallin only owned a portion of the minerals in the 160 acre tract, however, there was a question as to whether Hallin owned 60 net mineral acres or 80 net mineral acres. Upon execution of the leases, Hallin received payment drafts for a rental bonus showing that the parties owned 60 net mineral acres. Hallin subsequently sued to confirm ownership of their interest in the tract. In Hallin v. Lyngstad, 2013 ND 168, ¶19, 837 N.W.2d 888, the North Dakota Supreme
Court determined Hallin owned 80 net mineral acres in the tract. As a result of the suit, a dispute arose between Hallin and Inland regarding how many acres the leases covered. Hallin argued that the leases and the payment drafts should be read together to show they leased 60 net mineral acres, while Inland argued the leases were unambiguous and covered all of Hallin’s oil and gas interest. The district court agreed with Inland and determined the leases were unambiguous and Hallin leased whatever interest they owned in the property. Upon appeal to the North Dakota Supreme Court, the decision was affirmed. The Court reasoned that the leases specifically provided that “they include ‘all that certain tract of land’ within the entire 160-acre parcel. Nothing within the four corners of the leases suggests [Hallin] leased something other than all of the net mineral acres they owned.” The Court further noted that “the term ‘all’ is not ambiguous and it is unnecessary to go beyond the leases to discern the parties’ intent,” including the review of extrinsic evidence such as the payment drafts.
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G r o w t h T h r o u g h E d u c a t i o n - J a n u a r y / F e b r u a r y / M a r c h
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