News

EQT Prod. Co. v. Crowder and its Effect in Pennsylvania

December 13, 2019

By Paul R. Yagelski, Esq.

In Pennsylvania, Can Surface Owners Prohibit An Oil And Gas Company From Coming Onto Their Land To Develop The Oil And Gas Under Other Properties?

In EQT Prod. Co. v. Crowder, No. 17-0968, 2019 WL 2414728 (W.Va. June 5, 2019), the West Virginia Supreme Court held that although a mineral owner or lessee has an implied right to use the surface of a tract in any way reasonable and necessary to the development of the minerals underlying the tract, a mineral owner or lessee does not have the right to use the surface to benefit mining or drilling operations on other lands in the absence of an express agreement with the surface owner permitting those operations or unless the right to do so has been expressly obtained, addressed or reserved in the parties’ deeds, leases or other writings.  In other words, if an oil and gas company has leased the oil and gas under a surface owner’s land, the oil and gas company cannot come onto the surface owner’s land and place a well on the surface owner’s land, which will be used to frack the Marcellus/Utica shale under surrounding properties, unless the oil and gas company has obtained an express agreement to do so.

The decision of the West Virginia Supreme Court in EQT Prod. Co.. v. Crowder will have a tremendous impact on surface owners in West Virginia as now an oil and gas company cannot simply show up one day and start drilling a well on the surface owner’s property for purposes of developing oil and gas under surrounding or adjoining properties.  Pursuant to EQT Prod. Co. v. Crowder, unless the right to do so is agreed to by the surface owner or the right is expressly obtained, addressed or reserved in the parties’ deeds, leases or other writings, the surface owner can now prohibit this type of drilling on the surface owner’s land.  This decision will give the surface owner the ability to stop such development and to obtain a surface use agreement from the oil and gas company to compensate the surface owner for the use of the surface owner’s property, should the surface owner consent to the use of its land for purposes of developing the oil and gas under the surrounding properties.

What effect will EQT Prod. Co. v. Crowder have in Pennsylvania?  At present, in Pennsylvania, there is no decision similar to EQT Prod. Co. v. Crowder[1].  An oil and gas company can simply show up one day and begin operations on a surface owner’s property with a view towards putting an unconventional well on the surface of the property for purposes of developing the oil and gas underneath the surrounding owners’ properties.  The surface owner has no right to prohibit the oil and gas company’s operations as long as the operations are reasonably necessary for the development of the underlying oil and gas.  The oil and gas companies do not have to enter into any type of surface use agreement with the surface owners, which would compensate the surface owner for the use of its property by the oil and gas company or that would restrict the oil and gas company’s operations on the property. The issue in EQT Prod. Co. v. Crowder has yet to be litigated in Pennsylvania; however, in light of the West Virginia decision, it should be expected that it will be litigated.

[1] In Porter v. Chevron Appalachia, LLC, 204 A.3d 411 (Pa. Super. 2019), the issue decided in EQT Prod. Co. v. Crowder was tangentially involved on the grant of a preliminary injunction in favor of Chevron Appalachia, LLC by the Court of Common Pleas of Fayette County.  The Superior court affirmed the grant of the preliminary injunction, but did not address on the merits the issue involved in EQT Prod. Co. v. Crowder.

If you have questions about your Surface Owner rights, contact us or call Paul Yagelski at (412) 338-1124.