class actions,oil and gas leases,and royalties
Monday, April 12, 2010 by Underdog Lawyer
Our firm believes that there may be many occasions in this expanding oil and gas market in southwestern Pa , when the gas company (producer) either unintentionally or otherwise takes unfair advantage of land owners tied to older gas leases. Many of the old leases were standard and may not stand up to legal scrutiny today.
One recent example of this was noted by the Pennsylvania Supreme Court in a recent decision which examined the minimum royalty statute in Pennsylvania. That law requires a minimum 1/8 "royalty". But in some old leases the company was deducting from the minimum 1/8 royalty the costs for transportation of the gas after it left the ground. By calculating the royalty this way the company reduced the amount the landowner received to below 1/8. Unfortunately the Supreme Court in its interpretation of the term "royalty" allowed those leases to remain in effect and keep numerous landowners bound to some leases that are 20 to 30 years old.
However, we think those older uniform leases may be invalidated in a class action on other bases. So if you have an older lease, let us look at it. We can tell you if we think you are being treated unfairly by the the gas companies.
One recent example of this was noted by the Pennsylvania Supreme Court in a recent decision which examined the minimum royalty statute in Pennsylvania. That law requires a minimum 1/8 "royalty". But in some old leases the company was deducting from the minimum 1/8 royalty the costs for transportation of the gas after it left the ground. By calculating the royalty this way the company reduced the amount the landowner received to below 1/8. Unfortunately the Supreme Court in its interpretation of the term "royalty" allowed those leases to remain in effect and keep numerous landowners bound to some leases that are 20 to 30 years old.
However, we think those older uniform leases may be invalidated in a class action on other bases. So if you have an older lease, let us look at it. We can tell you if we think you are being treated unfairly by the the gas companies.
