Pa. Court Affirms Validity of Lease Despite Post-Production Deductions

HARRISBURG, Pa. - An oil and gas lease that commits the drilling company to the terms of the commonwealth's Guaranteed Minimum Royalty Act is valid even if it provides for the deduction of post-production expenses from those minimum royalties, a Pennsylvania appellate panel has affirmed. Katzin v. Central Appalachia Petroleum, et al., No. 135 MDA 2011 (Pa. Super. Ct.).

The Pennsylvania Superior Court Jan. 19 affirmed an order of the Bradford County (Pa.) Court of Common Pleas granting judgment in favor of Central Appalachia Petroleum and Chesapeake Appalachia LLC.

Plaintiff landowner Arthur Katzin sued Central Appalachia Petroleum and Chesapeake …