Ownership of Coalbed Methane Gas Linked to the Ownership of the Coal

In Kennedy v. Consol Energy Inc., 116 A.3d 626 (Pa. Super. Ct. 2015), Earl Kennedy and other interest holders (the "Kennedys") brought an action to quiet title to coalbed methane gas and for trespass and conversion against the owner and operator of the coal, Consol Energy Inc. and CNX Gas Co. ("Consol"). The first issue involved the ownership rights to coalbed methane gas.[1] The Kennedys owned the gas rights under a 790-acre tract of land, and contended that such rights also included the rights to the coalbed methane gas. Consol owned the Pittsburgh or River coal seam and had been drilling wells…

Top Leases Can Survive the Rule Against Perpetuities

In BP Am. Prod. Co. v. Laddex, Ltd., 07-13-00392-CV, 458 S.W.3d 683, Tex. App. LEXIS 1521 (February 17, 2015), the Amarillo Court of Appeals upheld the validity of a top lease and remanded the case to determine whether there was a cessation of production in paying quantities which potentially terminated the underlying lease. In Laddex, the lessors executed a lease on January 13, 1971 ("Arrington Lease"), which was eventually assigned to BP. Id. at 684. The Arrington Lease provided for a primary term of five years and so long thereafter as oil or gas is produced from the land. Id. The Mahler D-2 Well…