Wednesday, November 20, 2013

Pooling, Lease Integration Discussion Reveals Sharp Contrasts During Legislative Interim Meeting

During a legislative interim meeting this week, industry presenters from the state’s two natural gas trade associations touted the need for follow-up legislation to the state’s 2011 Horizontal Drilling Act.  The trade executives encouraged lawmakers to develop legislation related to pooling and lease integration.  They cited statutes from other states and noted that West Virginia’s industry needs to have lease integration provisions that will help to attract further investment, economic development and employment. The association leaders told lawmakers that the two groups have been meeting regularly to work out the internal industry differences on the issue. 

Several other groups -- surface owners, mineral owners and farmers – also were in attendance at the meeting, and representatives of several of them offered significantly different viewpoints on the matter, including outright opposition to any lease integration bill.  Among their comments were ones to do a significant rewrite to property law, negate existing leases, and beef up surface owners’ rights to block or impede development and production.

Lewis Glasser and its government relations affiliate, LGCR Government Solutions, will continue to monitor this issue and further legislative interim meetings.  To learn more, please call (304) 345-2000.

Thursday, November 7, 2013

Report: Natural Gas Counties In West Virginia Reaping Property Tax Gains

The West Virginia Center on Budget & Policy has released a new report that highlights how increased natural gas activities are resulting in increased property taxes for several counties in the Mountain State. 

"Natural Gas Counties Reaping Property Tax Gains"

Monday, November 4, 2013

Recent W.Va. Supreme Court Decision Continues To Define Surface Owner Rights

The ongoing development of natural gas resources in West Virginia, particularly from Marcellus production, continues to give rise to potentially tumultuous relationships between surface owners and the producer/mineral estate owners whose operations substantially impact the surface estate. However, a recent and important decision decided by the Supreme Court of Appeals of West Virginia better defines surface owner rights and, thereby, lessens risk to producers and mineral owners.

In Faith United Methodist Church v. Morgan, decided June 13, 2013, The Supreme Court of Appeals of West Virginia overruled its previous holding in Ramage v. South Penn Oil Co.  Ramage held that the word “surface,” when used in a deed, is ambiguous on its face, thereby opening the door to interpretation from extrinsic evidence as proof of the Grantor’s original intent.  However, the Court in Faith United Methodist Church overturned its prior decision, holding that a deed using the words “surface only” as the language of conveyance does express the clear and unambiguous intent of the Grantor. Moreover, the Court held the word surface, when used in a conveyance “generally means the exposed area of land, improvements on the land, and any part of the underground actually used by a surface owner as an adjunct to surface use.”

The high court in Faith United Methodist Church, based its decision, at least in part, upon the unpredictable results which occur when leaving seemingly unambiguous terms open to interpretation. This new interpretation adds uniformity and certainty to words of conveyance for both the practitioners drafting deeds and title opinions, as well as the West Virginia Courts interpreting the sometimes archaic language encountered in land titles.  

For West Virginia surface owners, mineral owners and oil and gas operators, the Faith United Methodist Church decision eliminates an undeniable business risk. The court noted however, as new technologies and drilling techniques develop, conflicts between surface owners and mineral owners will continue.

For more information, please contact Mark Sadd or Richard Gottlieb.