1880s Land Deal Has Potential To Upend Present-Day Drilling Leases

More on that Susquehanna County court case that could have major ramifications for natural gas extraction leases across Pennsylvania.
The Post-Gazette took a look at the issue this morning:

The parties involved are arguing over a 130-year-old Susquehanna County transaction, which reserved “half the minerals and petroleum oils” for those selling the land.
The current owners now say they should be the sole owners of any Marcellus gas produced because that agreement did not mention gas rights.

Legal observers caution that the resulting court decision could have ramifications for shale leases throughout the state.
The lawsuit raises questions about whether there are separate legal rights to the shale rock itself compared to the gas trapped inside, and if so, who can claim which when the paperwork is unclear.
“The practical impact is that right now, a company is not going to know who to deal with,” said Ross Pifer, director of Agricultural Law Resource and Reference Center at Penn State University’s Dickinson School of Law.
The main issue: surface and mineral rights are sold separately in Pennsylvania. If a person owns the mineral rights under his property, he can enter into a lease agreement with a gas driller.

If, all of the sudden, natural gas isn’t a mineral, that could creates a major legal problem.

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