In Mary v. QEP Energy Company, the Western District of Louisiana rejected, for the second time in this case, Plaintiffs’ claims seeking a disgorgement of QEP’s profits. QEP was the lessee of a mineral lease covering Plaintiffs’ property, but because it wanted to transport off-site gas across their property, QEP also obtained a pipeline
While the long-term fallout from the recent decline in oil prices and the COVID-19 pandemic remains unclear, it is clear that drilling activity has already started to decline. During this downturn in activity, mineral rights owners must remain cognizant of the maintenance activities necessary to preserve their mineral rights. Cannisnia Plantation, LLC v. Cecil Blount Farms, LLC,[1] is the most recent decision that provides the industry with a real-life application of the rules under Louisiana law for maintaining mineral servitudes.
Continue Reading Louisiana Second Circuit Provides Guidance as to Good Faith Required When Conducting Operations Necessary to Interrupt Prescription of Mineral Servitude
A July 3, 2017 ruling from the 17th Judicial District establishes that a mineral servitude owner’s obligation under Mineral Code article 22 “to restore the surface to its original condition” means the condition of the property at the creation of the servitude—and not the property’s pristine, pre-operation condition. The court’s commonsense ruling in Sterling Sugars v. Amerada Hess Corporation, No. 100091 (17th JDC) appears to be the first time a state court has directly interpreted the meaning of the phrase “original condition” in the Article 22 context.
Continue Reading Trial Court Rules that Article 22’s “Original Condition” Refers to Property’s Condition at the Creation of a Mineral Servitude
In Petro-Chem Operating Co., Inc. v. Flat River Farms, L.L.C., the Louisiana Second Circuit addressed issues affecting the creation and preservation of mineral servitudes and payment of court costs in a concursus action.[1] In the case, an operator initiated a concursus action seeking to resolve ownership interest in minerals underlying property on which it was operating. The dispute as to ownership arose because of questions as to: (1) whether or not a notarial act of correction could be used to perfect a mineral reservation in agreements that did not initially include language effecting such a reservation[2] and (2) whether or not inclement weather or the failure to timely obtain a permit could serve as obstacles sufficient to suspend the prescription of nonuse from running against a mineral servitude under Louisiana Mineral Code article 59.[3]
Continue Reading Louisiana Second Circuit Addresses: (1) Creation of Mineral Servitudes Via Notarial Acts of Correction; (2) Obstacles Suspending the Prescription of Nonuse from Running Against Mineral Servitudes; and (3) Payment of Court Costs in Concursus Actions
In the watershed Corbello[1] decision, the Louisiana Supreme Court affirmed a $33 million award—the cost to restore property valued at $108,000 to its “original condition” after it was damaged by oil and gas operations. If Corbello pressed the accelerator on “legacy” litigation, Eagle Pipe tapped the brakes.
Continue Reading Tightening the Timeline for Original Condition: the First Circuit Denies Writ from Ruling Applying Subsequent Purchaser Doctrine to Dismiss Claims Against a Mineral Servitude Owner