QEP Prevails in Lease Cancellation Appeal

http://www.prnewswire.com/news-releases/qep-prevails-in-lease-cance...

 

Specifically, the mineral lessors filed suit less than a year after discovery of the play seeking cancellation of a longstanding mineral lease on the ground that QEP had failed to explore and develop the property as a reasonably prudent operator by failing to commence a Haynesville Shale well. The trial court granted lease cancellation, finding essentially that the Haynesville Shale was so special and prolific that QEP should have begun drilling by the date of trial.

However, the Second Circuit reversed the lease cancellation, holding that the evidence fell "far short" of establishing that QEP had breached its duty as a reasonably prudent operator.

 

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on July 19, 2011 at 11:28
The Ferrara case has been remanded to the full court under an application for rehearing.  The application lists a number of factual and legal errors relied upon in the appellate opinion.

landownerPermalink Reply by LesterG on July 23, 2011 at 1:00
Thank you very much for the update Skip
Permalink Reply by Zydeco on July 20, 2011 at 5:20
In what kind of time frame will this occur ?  "Remanded" ?  I lost my O & G law degree...  this sounds like a good thing...   yes ?

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on July 20, 2011 at 7:38
Likely 30 to 60 days.  "To order or send back", Funk & Wagnalls.  I can be a good thing.  It will cause all the justices of the Second Circuit Court of Appeals to weigh in on the verdict.  Including those that actually are elected from districts in the HA/BO Play.  It may also be seen as a step on the road to a request for the LA. State Supreme Court to take the case on final appeal.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 9, 2011 at 9:21
The Second Circuit Court of Appeals declined the request for a rehearing.  The five judge panel that upheld the verdict consisted of the three that heard the original appeal and two additional.  All five affirmed the verdict however the two who did not hear the original appeal stated that  the legal reasons cited in the ruling were incorrect.  Plaintiff will now file a writ requesting that the case be heard by the LA. Supreme Court.

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