Court Ruling Could Upend Drilling Leases Across Pennsylvania

A legal case underway in Susquehanna County Common Pleas Court could have major financial implications, when it comes to Marcellus Shale drilling in Pennsylvania.
At issue: whether or not gas is a mineral, and should be included in landowners’ mineral rights. Up until now, gas has been treated as a mineral, but a recent state Superior Court ruling put that designation into question.
The Tribune-Review examines the implications:

If the Marcellus shale is not a mineral, it could change everything drillers have assumed about the state’s oil and gas laws. Valuable mineral deeds — especially older deeds with imprecise language — and the validity of Marcellus contracts based on them could be in jeopardy all over Pennsylvania. The uncertainty alone could lead drillers scrambling to write “cover leases” or hesitating to drill on land where mineral rights have been sold or partially sold in separate deals, said Pifer.
Ruling the shale is a mineral “would upset 110 years of oil and gas law, which the courts don’t want to do,” said Gregg M. Rosen, who represents several drilling companies for McGuireWoods LLP, Downtown. “And it would turn a billion-dollar industry on its head, subjecting oil and gas drillers to many lawsuits.”

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