Posts Authored by Aaron M. Bruggeman

Ohio Supreme Court issues another major decision for surface and mineral owners in Ohio

On December 17, 2020, just days after its decision in West v. Bode, the Ohio Supreme Court issued another major decision for surface and mineral owners in Ohio. In Gerrity v. Chervenak, Slip Opinion No. 2020-Ohio-6705, the Court formally weighed in, for the first time, on the level of diligence required by a surface owner who is researching severed mineral interest holders in order to serve a notice of abandonment pursuant to the Ohio Dormant Mineral Act (DMA). R.C. 5301.56 et seq. Appealing a Fifth District decision that upheld the purported abandonment of oil and gas mineral interests created by a 1961 reservation, and attacking the due diligence performed by the surface owners, the mineral owner presented two propositions of law for acceptance by the Court. For more, read the full article

Ohio, Oil & Gas Litigation

Ohio Supreme Court holds that both the MTA and DMA apply to mineral interests in West v. Bode

Ohio oil and gas stakeholders received another landmark decision from the Ohio Supreme Court in West v. Bode. Specifically, the Court held that both the Marketable Title Act (MTA) and the Dormant Mineral Act (DMA) apply to severed mineral interests. Thus, surface owners may utilize either the MTA or DMA to extinguish or abandon previously severed mineral interests, depending on the circumstances. For more, read the full article.

Ohio, Oil & Gas Litigation

Marathon sells Speedway division to 7-Eleven in $21-billion transaction

Plans for Marathon Petroleum to spin off its Speedway division (see our November 12, 2019 blog post) have been realized. Company officials announced the sale of the division “to the parent company of 7-Eleven in a transaction worth $21 billion,” whio.com reports. In a media release, Michael J. Hennigan, president and chief executive officer, said, "[o]ur announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets.” The transaction “was approved unanimously by the boards of directors of both companies,” according to the article. For more, read the full article and full release

National

Pandemic hits oil and gas industry

Oil and gas has been greatly affected by the coronavirus, according to WTOV9. The industry was saved hardships when Governor DeWine considered it “essential” for the lockdown period. However, a drop in demand led to crude oil to trade at a negative price. Workers remained positive and compliant as new safety precautions were implemented for their well-being. However, oil and gas production is expected to rise steadily as the country reopens. For more, read the full article.

Ohio

One-two punch of warm weather, COVID-19 may lead to shale bankruptcies

Natural gas prices “bobbing not far from 25-year lows hit on March 23” as warmer spring weather and COVID-19 pandemic lockdown measures “have slashed commercial demand for heating” has led to major budget changes for exploration and production companies — and bankruptcies may be next, investing.com reports. Gas production in the lower 48 U.S. states averaged 92.92. billion cubic feet per day for the week ending March 27, slightly lower than the previous week. Bankruptcies “are expected to gain momentum in the second quarter, accelerating as some drillers are forced to shut in production amid reduced oil demand and low available storage capacity.” For more, read the full article.

National, Oil & Gas Litigation

Ohio’s natural gas producers shift focus from production to profits

A change is underway for Ohio’s natural gas producers; after focusing on boosting production the past few years, they are now looking at ways to increase profits, the Akron Beacon Journal reports. Jeff Fisher, CEO of Ascent Resources, told attendees at the annual Ohio Oil & Gas Association meeting, “[i]nvestors are demanding that we put growth aside and manage the business with the idea of making profit,” according to the article. Producers have been so successful at boosting production that demand growth “has been phenomenal,” but supply “has been a little more phenomenal,” Fisher said. Matt Hammond, the association’s president, said while he doesn’t expect double-digit production increases to continue, the mood among those at the meeting “remains good.” For more, read the full article.

Ohio

EQT may sell “small portion” of royalties from natural gas production

Pittsburgh-based EQT Corp., the largest independent natural gas producer, “is in talks to have an investor take a 1 percent royalty interest in revenue from natural gas production,” the Pittsburgh Business Times reports. The company’s new management team “has been working to cut drilling costs and improve the company’s financial picture” as the domestic shale industry is experiencing sharp declines, according to the article. EQT said during the third-quarter conference call “it was evaluating ways to monetize its interest in natural gas production.” Then-Interim CFO Kyle Derham said, “[w]e are confident this strategy could generate significant proceeds that can be used to de-lever without a significant impact on development returns.” For more, read the full article.

Pennsylvania