Court upholds Pennsylvania’s forced pooling statute as constitutional

On April 8, 2014, a Pennsylvania Court of Common Pleas judge upheld the state’s controversial forced pooling statute (section 34.1 of the Oil and Gas Lease Act) as constitutional. This pooling statute, which was signed into law on July 9, 2013, gives drillers the ability to pool leased properties into one unit for horizontal wells, as long as the oil and gas contracts in effect do not prohibit these combinations.

In her order, the judge stated that “so long as the lessors’ rights granted by lease and law are not impinged upon, the lessee has broad powers to develop the oil and gas estate as it sees fit, including crossing property lines between contiguous leases while engaging in horizontal drilling.” Finding that the “statute does not abridge any existing rights or create any new ones, but merely clarifies existing rights, it does not impair the obligations of contracts” the judge concluded that the statute was not unconstitutional. “[W]here [the lessee] has the right to develop multiple contiguous oil and gas leases separately, it may develop those leases jointly by horizontal drilling unless expressly prohibited by a lease.”

Shortly after the new statute was signed, this lawsuit was filed by an oil and gas operator against a number of landowners, who hold old oil and gas contracts without pooling provisions, accusing them of blocking the company from conducting surveys on their land to determine where to drill for shale gas. The operator requested a declaratory judgment granting it access to the properties and to engage in horizontal drilling on the pooled properties. On December 26, 2013, with the memorandum opinion issued on January 8, 2014, the judge ordered the landowners to allow the operator “reasonable ingress, egress, access to and use of the…properties…for the purpose of performing seismic testing.”.

For additional information on this lawsuit, click here and here.

This post was written by Barclay Nicholson ( or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group.