Legal
Federal Court Upholds Fixed-Rate Post- Production Deduction Provision in West Virginia Updates These materials reflect only the personal views of the author and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the author and their law firm cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the author or their law firm. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.
About the Authors:
On August 24, 2017, the United States District Court for the Northern District of West Virginia entered an Order in a royalty deduction class action granting Defendants CNX Gas Company LLC and Noble Energy Inc.’s Motions for Summary Judgment. The Court examined a 2009 oil and gas lease that expressly excluded all implied warranties and covenants and contained a royalty provision permitting the operator to deduct $1.20 per MMBtu for certain identified post-production costs, which the parties “agreed will be presumed to be actually incurred and reasonable.” The Court held that this lease was unambiguous and also complied with the requirements enumerated in Wellman and Tawney for post-production deductions. In short, the Court upheld the parties’ right to unambiguously contract for post-production deductions and to “freely contract that the flat-rate deductions are ‘actually incurred and reasonable’”.
Charles Johns concentrates his practice in trial work with a focus on professional liability and energy litigation. He has extensive trial experience in both state and federal courts. Email: charles.johns@steptoe-johnson.com Denielle Stritch focuses her practice in the areas of energy litigation and labor and employment law, counseling clients in various aspects of their operations and employment matters. Email: denielle.stritch@steptoe-johnson.com Jamie Chapman focuses her practice on energy litigation, mineral title, and energy transactions. jamie.chapman@steptoe-johnson.com
WV Supreme Court Rules NPRI Owners Need Not Consent to Pool
Today, the West Virginia Supreme Court reversed a ruling of the Circuit Court of Marshall County to hold that nonparticipating royalty interest owners need not consent
to pooling or unitization. In an opinion issued this afternoon, the Supreme Court held in Syllabus Point Two of its opinion: “Where a lessee designates tracts of land
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