September 09, 2013 Articles

Trends Emerging from Domestic Unconventional Oil-and-Gas Resources

Recent data suggest that litigation activity will continue.

By Robert Lang and Rob Wentland – September 9, 2013

Unconventional oil-and-gas litigation continued to increase in the second half of 2012, especially in the area of hydraulic fracturing. Oil-and-gas companies involved in unconventional exploration continue to face not only the challenge of differing state laws but also a constantly evolving legal landscape. Industry observers have been closely watchingButler v. Charles Powers Estate in the Pennsylvania Supreme Court, which will determine whether Pennsylvania considers natural gas a mineral. On April 24, 2013, the court released its much-anticipated opinion and reversed the Pennsylvania Superior Court, upholding Pennsylvania’s unique Dunham Rule. For owners of Marcellus Shale gas, this decision closed the door on arguments that might have resulted in a reexamination of thousands of titles. See Butler v. Charles Powers Estate, 2013 WL 1749828, (Pa. Apr. 24, 2013).

The second half of 2012 observed a large uptick of litigations filed. Compared with an average of 67 cases filed during each of the four prior quarters, Q3 and Q4 observed 146 and 105 cases filed, respectively. The Q3 2012 spike in the volume of cases was driven by an elevated number of cases filed in Texas, Oklahoma, and Nebraska. Royalty disputes and cases and land-and-lease-rights disputes were the most common types of unconventional oil-and-gas litigation during 2012, with both types of litigation experiencing a notable increase in the second half of 2012.

Our study methodology started with an attempt to identify all cases filed in U.S. federal and state courts relating to unconventional oil-and-gas litigation. While Navigant’s list may not be exhaustive, we believe the case data present a comprehensive picture of the nature and volume of this specific type of litigation filed during 2012. Navigant used LexisNexis Courtlink, Law360, news articles, and other court-reporting services to identify relevant cases. We then reviewed and evaluated these cases for inclusion in our article.

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