Articles Posted in Energy, Oil & Gas Law

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The Wyoming Oil and Gas Conservation Commission approved Cimarex Energy Company's plan to reinject waste carbon dioxide and hydrogen sulfide into a producing natural gas formation in southwest Wyoming over the objection of Exxon Mobil Corporation. Exxon appealed. The district court affirmed the Commission's decision. The Supreme Court affirmed in part and reversed and remanded in part, holding (1) the Commission properly denied Exxon's petition for a rehearing; but (2) the Commission failed to provide sufficient findings of fact as to whether Cimarex's plan to reinject carbon dioxide and hydrogen sulfide would result in waste of natural gas and improperly interfere with Exxon's correlative rights. Remanded to the Commission to make appropriate findings of both basic and ultimate facts. View "Exxon Mobil Corp. v. Wyo. Oil & Gas Conservation Comm'n" on Justia Law

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Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG's wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan's successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party's sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed suit asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. Upon review, the Supreme Court affirmed. The Court found no breach of contract in the successor's removal of the pipelines connecting BOG to the gas gathering system and that the Gas Purchase Contract was properly terminated for economic cause. Furthermore, the Court found no clear error in the district court's rejection of BOG's claim for breach of the implied covenant and fair dealing. View "Bowers Oil & Gas, Inc. v. DCP Douglas, LLC" on Justia Law

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John and Minerva Sutherland entered into a mining lease granting Meridian Granite Company the right to conduct mining operations on the Sutherlands' property. A dispute developed between the Sutherlands and Meridian regarding the Sutherlands' obligation to pay taxes relating to the mineral production. The dispute led to litigation. The district court granted Meridian's motion for summary judgment, ruling that the Sutherlands were obligated to pay the disputed taxes. The Supreme Court affirmed, holding that the district court did not err in allowing Meridian to deduct ad valorem and severance taxes from payments to the Sutherlands when such tax payments were not required by the State, as the Sutherlands and Meridian agreed in the mining lease that the Sutherlands would pay the taxes. View "Sutherland v. Meridian Granite Co." on Justia Law

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Appellant, Whitney Holding Corporation, challenged a decision of the district court quieting title in a certain mineral estate in favor of Appellees, Clarence and Peggy Terry. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the parties intended, and the limited warranty deed conveying the property from Whitney to the Terrys reflected, that Whitney did not reserve a mineral interest in the property; (2) the district court properly determined that the deed was ambiguous and did not err in considering extrinsic evidence to interpret the deed; and (3) the Terrys' quiet title action was not barred by the statute of limitations. View "Whitney Holding Corp. v. Terry" on Justia Law

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This case arose from a decision rendered by the State Board of Equalization (Board) concerning the valuation point for tax purposes of the natural gas production from the LaBarge Field. The Supreme Court remanded the issue to the Board of whether the meters located at the LaBarge Field well sites were "custody transfer meters" as defined by Wyo. Stat. Ann. 39-14-203(b)(iv) or volume meters for Exxon's share of gas production. The Board held (1) the meters were not custody transfer meters for Exxon's share of gas production, and (2) the same meters were custody transfer meters for the gas produced by two other working interest owners, petroleum companies, who were not parties to the action. The Supreme Court (1) affirmed the Board's determination that the meters were not custody transfer meters for Exxon's gas where the Board's determination harmonized with precedent established in Amoco Prod. Co. v. Dep't of Revenue; but (2) reversed the Board's determination that the meters were custody transfer meters for the petroleum companies' gas because the Board did not have the authority to determine the valuation point for "non-party" persons or entities that do not appeal their tax assessments. View "Exxon Mobil Corp. v. Wyo. Dep't of Revenue" on Justia Law

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Celeste Grynberg and her husband were co-owners of Grynberg Petroleum. Celeste filed a complaint for declaratory relief, breach of contract, unjust enrichment, and conversion against L&R Exploration Venture and numerous individuals and entities having an interest in the venture (collectively L&R), claiming that L&R owed her compensation for services Grynberg Petroleum provided to L&R and that she was entitled to payment of those amounts. The district court granted summary judgment for L&R and dismissed the complaint on the basis of res judicata, finding that Celeste was in privity with parties involved in prior litigation in Colorado and New York and her complaint involved the same subject matter and issues resolved in those proceedings. The Supreme Court affirmed, holding that Celeste was in privity with her husband, who was a party in the New York proceedings, as the assignee of his interest in L&R and with Grynberg Petroleum as the co-owner of the company and was bound by the prior rulings. View "Grynberg v. L&R Exploration Venture" on Justia Law