Monday, October 10, 2011

Recent Pennsylvania Intermediate Court Decision Not Cause For Panic In West Virginia

On September 7, 2011 the Superior Court of Pennsylvania issued an opinion, reversing and remanding a decision by the Court of Common Pleas of Susquehanna County Pennsylvania, styled Butler v. Charles Powers Estate et al. 2011 PA Super 198, which has caused consternation throughout the Marcellus Shale development community. In Butler, the Superior Court in Pennsylvania indicated that it was willing to entertain an argument that gas trapped within the Marcellus Shale formation was similar, for title purposes, to coal bed methane.

In Pennsylvania, West Virginia and a number of other jurisdictions with both coal and gas resources under development, courts have applied different rules of construction to the conveyance of coal bed methane, and the right to develop the same, than to so-called ‘conventional gas.’ As a result, the willingness of the Pennsylvania Superior Court to consider an alternate treatment for title to the gas trapped within the Marcellus Shale formation has sent developers scrambling.

West Virginia’s existing precedent on the key element of the Butler analysis is distinguishable and, in conjunction with the preliminary nature of the Butler decision, does not justify a panic among developers of the natural gas trapped within the shale in West Virginia.

Click to read an analysis prepared by Lewis Glasser Casey & Rollins PLLC.