The Times West Virginian

April 4, 2013

Court asked to rule on gas drilling question

By Vicki Smith
Associated Press

MORGANTOWN — A federal judge has asked the West Virginia Supreme Court to rule conclusively on whether state law allows a gas drilling company to use a Marion County farmer’s land to sink horizontal wells that would draw gas from neighboring tracts.

The 2011 case that Richard Cain originally filed in Marion County Circuit Court “could have far-reaching legal and economic implications for the state of West Virginia,” U.S. District Judge Keeley wrote in a recent ruling. “Such important and unsettled issues of state law should ... be decided by West Virginia’s highest court.”

Cain says Exxon Mobil subsidiary XTO Energy plans to use the best of his land for as many as 18 well pads, leaving him with mostly steep, unusable hillsides.

Cain concedes he doesn’t own the rights to oil, gas and minerals under his 105 acres. But he argues a 1907 deed at the center of his lawsuit never envisioned such extensive surface disruption.

XTO denies doing anything illegal and says it paid $63,000 for a pipeline right of way easement to transport oil, gas water and other substances across Cain’s property.

XTO calls its plan to use 36 acres of Cain’s land “reasonably necessary” for exercising its rights.

That, Keeley said, is the heart of the dispute.

Both sides have cited situations that are “arguably analogous” to the one at hand, Keeley said. But neither has identified a “clear controlling West Virginia precedent to guide the court’s decision.”

As Cain noted in one court filing, a recent issue of “West Virginia Law Review” was entirely devoted to the fact that past cases “do not provide enough clear answers for one to reliably predict” how the state Supreme Court would rule on a case like his.

Cain says the mineral rights under his land were sold in 1881 and have changed hands several times. But he claims ownership of those mineral rights doesn’t give a company the authority to drill multiple wells.

There’s no dispute that Cain bought the land in 1989, Keeley has previously ruled. “The ownership history of the oil and gas rights themselves, however, is somewhat more convoluted.”

XTO’s lease gives it the clear right to access adjoining property through pipelines, Keeley said in dismissing some defendants from the case last year. It does not, however, “otherwise provide the right to use the surface of the tract to explore for or produce oil and gas from neighboring oil and gas estates,” she wrote.

Cain is a member of the West Virginia Surface Owners’ Rights Organization, which has been monitoring his case closely.

Spokeswoman Julie Archer said her group believes that even if the driller had the right to access neighboring tracts, it cannot build the well pads on Cain’s land without his consent.

“We are not trying to stop the drilling by supporting this case,” Archer said. “We just don’t want to be treated like the renters in a company town.”

Keeley has given the parties until April 29 to submit case summaries and proposed language for the question the court would answer.