Pa. Appeals Court Weighs Meaning Of 'On' In Gas Leases - Law360

Matthew Burger, shareholder and chair of the firm's Energy section, comments on the debated definition of the word "on" as it pertains to his client's case, in which a landowner argues he is entitled to extra payments from his gas lease because of work occurring "on" his property. Read more in Law360's article "Pa. Appeals Court Weighs Meaning Of 'On' In Gas Leases."

Mitch had leased his property to XTO for an unconventional well, and the horizontal drilling already done under his land had landed him lease payments, bonuses and royalties worth about $170,000, said Matthew F. Burger of Buchanan Ingersoll & Rooney PC, representing XTO.

Burger said the provision of the lease Mitch was invoking for more money was a holdover from when homeowners could run a service line from a well head on their property to get gas directly from the source. If surface disruptions or liability factors prevented that connection, the owners could claim a payment in lieu of the gas in kind.

Burger said the contract didn't intend to be so ambiguous, since other parts of the contract used clearer language to distinguish between what was happening above the ground and below it.

"They say 'on' doesn't mean 'on' in this case … But subsurface activities are described as 'under,' 'beneath,' 'below,' 'underneath' — not 'on,'" he said. "The lease says pipelines can be 'on' or 'under' the leased property; it wouldn't distinguish between the two if 'on' means everything."