In July 2013, a new law went into effect in Pennsylvania allowing drillers to pool leased properties into one unit for horizontal wells, as long as the oil and gas contracts in effect did not prohibit these combinations.
Shortly thereafter, using the new statute, EQT Corporation sued more than 60 Allegheny County individuals, accusing them of blocking the company from conducting surveys on their land to determine where to drill for shale gas. See prior blog dated August 2, 2013, Pennsylvania Landowners Sued Under New Pooling Law.
The defendants have now answered EQT’s Complaint, alleging that the pooling law “constitutes an unconstitutional taking of…private property for non-public use and without just compensation…” and deprives them of “rights to acquire, possess, and protect property in violation of” the U.S. Constitution and the state’s constitution.
Defendants argue that the new law should not be applied retroactively to their leases, the majority of which do not contain pooling provisions, and that the leases are invalid to the extent that EQT has not made the required payments under the leases to store natural gas on their property.
In addition, defendants argue that EQT “does not have the right to enter…[their] property to conduct operations, including but not limited to seismic testing, because Plaintiff has not complied with local, state, and/or federal laws and regulations to obtain the necessary permit(s)…”
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.
