August 30, 2016 Articles

After-Acquired Title in Oil and Gas Leases and Estoppel by Deed

The Pennsylvania Supreme Court applied estoppel by deed to an oil and gas lease where the owners had record notice of a reservation of mineral rights.

By Ryan van Steenis – August 30, 2016

The Pennsylvania Supreme Court, in Shedden v. Anadarko E. & P. Co., L.P., 136 A.3d 485 (Pa. 2016), unanimously affirmed a trial court’s grant of summary judgment in favor of Anadarko for the transfer of oil and gas rights to an entire 62-acre parcel of land. The plaintiffs lost under a doctrine called estoppel by deed.

In July 1990, the Sheddens purchased 62 acres of unimproved land from Colgate University. Colgate had previously purchased the property from Viola Beck, and public records show Beck paid $0 for the property, indicating she likely inherited it. Before Beck owned it, the Baxters owned the property. In 1894, in a properly recorded deed, the Baxters reserved one-half of the oil and gas rights in the property. So, when the Sheddens purchased the property, one-half of the oil and gas rights remained with the Baxters (or their estate) and the other half remained with the Sheddens. But the Sheddens were unaware that the Baxters had previously reserved one-half of the oil and gas rights.

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