PA Superior Court Overturns “Rule of Capture” for Marcellus Well

Susquehanna County family can proceed with a lawsuit against an energy company that extracted natural gas from beneath their land using wells on an adjacent property, the state Superior Court ruled in a potentially precedent-setting decision.

The ruling in the suit Adam Briggs and his two siblings filed against Southwestern Energy Production Co. is important because it negates a legal principle in oil and gas law that allows companies to siphon natural resources from beneatland 

Briggs filed suit in 2015 against Southwestern relating to an 11-acre property he, his brother, Joshua Briggs, and his sister, Sarah Briggs, own in Harford Township.
Now it’s crystal clear Pennsylvania law will not apply the rule of capture to fracking fissures that migrate under unleased acres.— Robert Burnett, a Pittsburgh attorney who represents landowners in oil and gas disputes.

The suit alleges Southwestern operated two wells to extract natural gas from a Marcellus Shale formation under the Briggs’ property since 2011. The Briggs were never compensated for the gas, however, because the wells are on a neighbor’s land. Southwestern has a lease with the neighbor but not the Briggs family.

A Susquehanna County judge dismissed the lawsuit in August, after finding Southwestern was not required to pay the Briggs family based on a legal principle known as the “rule of capture.” The rule allows companies to drain a natural resource, including oil, gas or water, from beneath property they do not own as long as they do not trespass on the land.

In its ruling, the Superior Court noted the rule is based on the idea that ownership of underground pools of gas or oil cannot be determined because the resource naturally migrates between property lines.

Multiple appellate courts have found the rule means one property owner can drill a well a short distance from a neighbor and use it to extract oil or gas from the neighbor’s property without paying them. If that neighbor objects, the only recourse would be to “go and do likewise” by drilling their own well to siphon off the other person’s land.

In his appeal, the Briggs’ attorney, Laurence Kelly, of Montrose, argued the rule should not apply to natural gas extracted through hydraulic fracturing because the gas contained in Marcellus Shale does not freely migrate. It is only freed by the fracking process.

The Superior Court agreed.

“Traditionally the rule of capture assumes that oil and gas originate in subsurface reservoirs or pools and can migrate freely within the reservoir and across property lines,” the court said. “Unlike oil and gas originating in a common reservoir, natural gas, when trapped in a shale formation, is nonmigratory in nature.”

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It's huge--so huge an appeal seems likely. So huge that a lot of O&G attorneys are going to be extremely busy if ruling stands.
My understanding is trespass damages are for the entire value of the previous gas in place/extracted. Not just a royalty. (Gas was at >$6/mcf back when a lot of this activity occurred.)

BIG! Are you listening WV?

Yes we are..

about time the land owner gets a ruling in our favor.  

Interesting. How do can you prove that gas has been extracted below my property if I am not  in the adjacent unit that is extracting gas??? 

There may soon be enough of a payday to this determination that some sharp tort attorney will establish the distance a frac propagates, either through discovery, or an expert witness (or even a series of test wells?). PA Superior Court just dropped a number of 3,000'

The evidentiary standard for a civil case is not proof beyond a reasonable doubt, but a preponderance of evidence. "Where the weight of a feather can tip the scales of justice"

Your optimism is appreciated and the court ruling favorable but in the end, I feel these gas companies will drag this out and rebuttal any resistance to the contrary. We waste time and money and ultimatley loose again. 

The ODNR is trying to determine the spacing limits between well bores. the distance of the drainage between wells seems to fall between 500' and 1000'. They must not think that they are draining the minerals any farther out than that,or they could space the wells 3000' apart. according to that, if your unleased oil&gas is farther than 1000', from the neighbors well lateral,then you would not be getting drained. There is going to have to be a standard distance established in these cases,sooner or later. I like the 500' limit, but I'm not an attorney; but I did stay at a Holiday Inn Express last night.

The 500'-1500' pitchfork lateral spacing evolved in the Marcellus play out of what was most efficient drainage, not what maximum distance shale was shattered or the limits of trespass. It will be interesting to see how this unfolds

Not sure,but it seems the fractures from the fracking must not reach out much further than 500' or they would never drill so many laterals that close to each other?

The distance between radial spokes in the earlier wagon wheel design fracs in other tight shale plays (TX) is likely where the 3000' number originated. These designs might have left a lot of gas in the ground. But the E&P companies must have had reason to believe they could break up the shale at these distances.


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