amicus brief, Patrick D. Leggett, et al. v. EQT Production … · 2017. 3. 17. · production, consistent with established West Virginia law. Through this brief, Bounty will attempt

IN THE WEST VIRGINIA SUPREME COURT OF APPEALS

No. 16-0136

PATRICK D. LEGGETT; KATH~RINE F. ~EGGETT; t: I, L' ti:,'::GEORGE D. MCKAIN, by hIS attorney In fac~ r i' ~:.'

ANITA KATHRYN MCKAIN GREER; I ~.

and ADELE S. MCDOUGAL, \ 1 fEB 2 8 ~C: i Plaintiffs/Petitioners, 'I'

'---.,-/L-:P:-::'E'7;:

v. ..____~...J

EQT PRODUCTION COMPANY, a Pennsylvania corporation; EQT CORPORATION, a Pennsylvania corporation;

EQT ENERGY, LLC, a Delaware limited liability company; EQT INVESTMENTS HOLDINGS, LLC, a Delaware limited liability company;

EQT GATHERING, LLC, a Delaware limited liability company; EQT MIDSTREAM PARTNERS, LP, a Delaware limited partnership,

D~fendantslRespondents.

AMICUS CURIAE BRIEF ON BEHALF OF BOUNTY MINERALS, LLC IN SUPPORT OF PLAINTIFFSIPETITIONERS PATRICK D. LEGGETT, ET AL.

DODARO, MATTA & CAMBEST, P.C.

Michael J. Hammond, Esquire WV ID No. 12744

1900 Main Street, Suite 207 Canonsburg, Pa 15317 Tel: (412) 243-1600 Fax: (412) 243-1643

[email protected]

mailto:[email protected]

TABLE OF CONTENTS

I. Introduction ..................................................................................................................... 3

II. Factual and Procedural History ............................................................................ ···········14

III. Points and Authorities Relied On .................................................................................... 7

IV. Discussion of Law ........................................................................................................... 8

A. This Court was correct in holding that the language of "at the wellhead" in a lease as interpreted by the Court in Tawney v. Columbia Natural Resources, UC, 219 W.Va. 266, 633 S.E.2d 22 (2006) is also applicable to the language of "at the wellhead" of West Virginia Code §22-6-8( e), thereby prohibiting the deduction ofpost-production costs by lessees from royalty payments under leases -converted by the aforementioned statute ....................................................... 8

1. The Court's Opinion in Wellman v. Energy Resources, Inc., 210 W.Va. 200,557 S.E.2d 254 (2001), properly places the burden ofpost-production expenses on the lessee absent contrary language ............................................... 8

2. The Court's Opinion in Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) properly holds the language of "at the wellhead" in a lease is insufficient to alter the standard rule that lessees bear the burden of post-production expenses that was recognized in Wellman . ............................................................................................................ 10

3. The plain language of West Virginia Code § 22-6-8(e) prohibits the deduction ofpost-production costs from a lessor's royalty ............................... 12

4. To the extent there is any ambiguity found in the statutory language, it must be construed in favor of the lessees ........................................................... 13

V. Prayer for Relief .............................................................................................................. 15

2


No. 16-0136

PATRICK D. LEGGETT; KATHERINE F. LEGGETT; GEORGE D. MCKAIN, by his attorney in fact,

ANITA KATHRYN MCKAIN GREER; and ADELE S. MCDOUGAL,

PlaintiffslPetitioners,

v.




DefendantslRespondents.

AMICUS CURIAE BRIEF ON BEHALF OF BOUNTY MINERALS, LLC IN SUPPORT OF PLAINTIFFSIPETITIONERS PATRICK D. LEGGETT, ET AL.

To the Honorable, the Justices ofthe Supreme Court ofAppeals OfWest Virginia:

I. Introduction

Your amicus, Bounty Minerals, LLC ("Bounty") is a mineral and royalty acquisition

company headquartered in Fort Worth, Texas that maintains a vested interest in issues affecting

the ownership of mineral interests in West Virginia and in the continued development of

equitable precedent governing the relationship between mineral owner and developer.

Bounty is in a unique position to have first-hand data of the effects of unrestricted

deductions for post-production costs across the Appalachian basin. Bounty presently owns

approximately 22,000 net mineral acres in West Virginia, 24,000 net mineral acres in Ohio and

3

10,000 net oil and gas acres in Pennsylvania. As illustrated on the attached and incorporated

"Exhibit A", Bounty's data reflects six-month gross royalty averages of $1.49/mcf in West

Virginia, $1.68/mcf in Ohio, and $1.64/mcf in Pennsylvania. The gross royalties are reduced

significantly by deductions for post-production costs, by averages of 34% in West Virginia, 25%

in Ohio, and 51 % in Pennsylvania.

Specifically in West Virginia, Bounty has tracked royalty payments from five operators

with which Bounty currently owns leased minerals, as outlined on the attached and incorporated

"Exhibit B." Stated again, the average amount of post-production costs is 34%, and as high as

48% from "Operator C" of the gross royalties attributable to Bounty's interest.

Bounty's position herein is that the plain language of West Virginia Code § 22-6-8

indicates a Legislative desire to address inherent inequities in the changing landscape of the oil

and gas industry, and that to uphold the Court's previous ruling in this matter is not to afford

royalty owners an unjustified windfall, but to properly allocate the burdens and costs of

production, consistent with established West Virginia law.

Through this brief, Bounty will attempt to add insight as to why this Court was correct in

holding that the lessee of an oil or gas well subject to West Virginia Code § 22-6-8( e) may not

deduct from the statutory one-eighth royalty any expenses that have been incurred in gathering,

transporting, or treating the oil or gas after it has been initially extracted, any sums attributable to

a loss or beneficial use of volume beyond that initially measured at the wellhead, or any other

costs that may be characterized as post-production.

Ultimately, Bounty believes that this Court was correct in detennining that the language

of "at the wellhead" in a lease as interpreted by the Court in Tawney v. Columbia Natural

Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006), applies to the language of "at the

4

wellhead" in West Virginia Code §22-6-8(e) and forbids the deduction of post-production costs

from the royalty amounts due to lessors, absent specific language granting authorization for such

deductions. Further, Bounty agrees with the Court that a lessor has an implied covenant to

market the oil or gas produced, meaning it has the duty and responsibility ofgetting the oil or gas

into marketable conditions as the Court found in Wellman v. Energy Resources, Inc., 210 W.Va.

200,557 S.E.2d 254 (2001).

II. FacfiJal and Procedural History

This action arises from a 1906 lease of mineral interests in Doddridge County between

defendant EQT Production Company (hereinafter "EQT"), as successor lessee, and plaintiffs

Patrick D. Leggett, Katherine F. Leggett, Anita Kathryn McKain Greer as attorney-in-fact on

behalf of George D. McKain, and Adele S. McDougal (hereinafter, "Plaintiffs"), as successor

lessors to the 1906 lease. Plaintiffs' collectively represent a seventy-five percent ownership of

the produced oil and gas. Plaintiffs brought suit against Defendant EQT and five related

entities, I alleging underpayments of Plaintiffs' royalties from the mineral interests explored and

produced by EQT. Some of the wells at issue were in place prior to 1982 and on these EQT pays

a flat-rate royalty of three hundred dollars per the original lease agreement. However, the

majority of the wells are subject to the controlled "flat rate statute" set forth in West Virginia

Code § 22-6-8 (1994). On those leases, EQT is to pay a one-eighth royalty notwithstanding the

royalty provision of the lease.

Upon motion for summary judgment, the district court granted judgment to the

related entities, ruling none of them were parties to the subject leases and therefore not liable,

and partial summary judgment to EQT, reserving its ruling on the remaining aspects of

I EQT Corporation; EQT Energy, LLC; EQT Investment Holdings, LLC; EQT Gathering, LLC, and EQT Midstream Partners, LP.

5

Plaintiffs' claims against EQT pending this Court's disposition of the questions certified to it.

The two certified questions were as follows:

1. Does Tawney v. Columbia Natural Resources, LLC., 219 W. Va. 266, 633 S.E.2d 22 (2006), which was decided after the enactment of West Virginia Code § 22-6-8, have any effect upon the Court's decision as to whether a lessee of a flat-rate lease, converted pursuant to West Virginia Code § 22-6-8, may deduct post-production expenses from his lessor's royalty, particularly with respect to the language of"118 at the wellhead" found in West Virginia Code § 22-6-8(e)?

2. Does West Virginia Code § 22-6-8 prohibit flat-rate royalties only for wells drilled or reworked after the statute's enactment and modify only royalties paid on a per-well basis where permits for new wells or to modify existing wells are sought, or do the provisions of West Virginia Code § 22-6-8 abrogate flat-rate leases in their entirety?

Upon deciding these questions the Court reformulated the first question in accordance to

its discretion under West Virginia Code § 51-1A-4 as follows:

Whenever the lessee-owner of a working interest in an oil or gas well must comply with West Virginia Code § 22-6-8(e) by tendering to the lessor-owner of the oil or gas in place a royalty not less than one-eighth of the total amount paid to or received by or allowed to the lessee, does the statute require in addition that the lessee not deduct from that amount any expenses that have been incurred in gathering, transporting, or treating of the oil or gas after it has been initially extracted, any sums attributable to a loss or beneficial use of volume beyond that initially measured, or any other costs that may be characterized as post-production?

The Court answered the refonnulated question in the affinnative thereby prohibiting a

lessee from deducting what is described as post-production costs from a lessor-owners one

eighth royalty. The Court declined to answer the second question, as it was not properly before

it.

After the Court's holding was rendered, EQT filed a petition for rehearing that was

granted with oral arguments before this Court scheduled for May 2, 2017.

6

III. Points and Authorities Relied Upon

Statutes

W.Va Code § 22-6-8 ....................................................................................... 4-6, 8, 10, 12, 14, 15

W.Va Code § 51-IA-4 ....................................................................................................................6

Appalachian Power Co. v. State Tax Dep't, 195 W.Va. 573,466 S.E.2d 424 (1995) ............ 13-14

Buda v. Town oJMasontown, 217 W.Va 284, 617 S.E.2d 831 (2005) .........................................14

Davis v. Hardman, 148 W.Va. 82, 133 S.E.2d 77 (1963) ......................................................... 9, 11

Farley v. Buckalew, 186 W.Va. 693,414 S.E.2d 454 (W.Va. 1992) ............................................14

Gilmore v. Superior Oil Company, 192 Kan. 388, 388 P.2d 602 (1964) ......................................10

Hanna Oil & Gas Co. v. Taylor, 297 Ark. 80, 759 S.W.2d 563 (1988) ........................................10

McGinnis v. Cayton, 174 W.Va. 102,312 S.E.2d 765 (1984) .......................................................14

Smith v. State Workmen's Compo Com'r, 159 W.Va. 108,219 S.E.2d 362 (1975) .......................13

State V. Snyder, 64 W.Va. 659, 63 S.E. 385 (W.Va. 1908) ...........................................................14

State ex rei. McGraw v. Scot Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516,523 (1995) ...........................................................................................................14

Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) .................................................................. : ................................ 4,6,8, 10-13

Wellman V. Energy Resources, Inc., 210 W.Va. 200, 557 S.E.2d 254 (2001) ...................... 5,8- 12

West v. Alpar Resources, Inc., 298 N.W.2d 484 (N.D. 1980) .......................................................10

Wood v. TXO Production Corp., 1992 Okla. 100,854 P.2d 880 (1992) .........................................9

Donley, The Law oJCoal, Oil and Gas in West Virginia and Virginia, 436 (1951) .......................8

7

IV. Discussion Of Law

A. This Court was correct in holding that the language of "at the wellhead" in a lease as interpreted by the Court in Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) is also applicable to the language of "at the wellhead" of West Virginia Code §22-6-8(e), thereby prohibiting the deduction of post-production costs by lessees from royalty payments under leases converted by the aforementioned statute.

1. The Court's Opinion in Wellman v. Energy Resources, Inc., 210 W.Va. 200, 557 S.E.2d 254 (2001), properly places the burden of post-production expenses on the lessee absent contrary language.

In Wellman v. Energy Resources, Inc., 210 W.Va. 200, 557 S.E.2d 245 (2001) the Court

had the opportunity to review and decide the issue of who is to bear the burden of post

production expenses and found that burden was properly placed upon the lessee ofan oil and gas

lease. The language ofthe lease in Wellman provided for a royalty of "lISth of the proceeds from

the sale of gas as such at the mouth of the well," with no other language regarding expenses

incurred after it reaches the wellhead.

In Wellman, Energy Resources, Inc., as lessee, paid the Wellmans, as lessors, a total

royalty of one-eighth of $0.87 per thousand cubic feet ofgas produced. In calculating the royalty

payment to the Wellmans, Energy Resources deducted certain expenses from the $2.22 per

thousand cubic feet of gas it actually received upon sale at the market. The Court found that by

taking these deductions from the one-eighth royalty, Energy Resources violated the implied

covenant to market the produced gas.

In opining that post-production expenses were correctly borne by the lessee, the Court

explained:

In Robert Donley, The Law ofCoal, Oil, and Gas in West Virginia and Virginia § 104 (1951), it is stated: "From the very beginning of the oil and gas industry it has been the practice to compensate the landowner by selling the oil by running it to a common carrier and paying him [the landowner] one-eighth of the sale price received. This practice has, in recent years, been extended to the situations where

8

gas is found ... " The one-eighth received is commonly referred to as the landowner's royalty. In Davis v. Hardman, 148 W.Va. 82, 133 S.E.2d 77 (1963), this Court stated that a distinguishing characteristic of such a royalty interest is that it is not chargeable with any of the costs of discovery and production (emphasis added). The Court believes that such a view has been widely adopted in the United States ... In spite of this there has been an attempt on the part oil and gas producers in recent years to charge the landowner with a pro rata share of various expenses connected with the operation of an oil and gas lease such as the expense of transporting oil and gas to a point of sale, and the expense of treating or altering the oil and gas so as to put it in a marketable condition. To escape that the lessee must pay the costs of discovery and production, these expenses have been referred to as "post-production expenses."

Wellman, 210 W.Va. 200,209-10,557 S.E. 2d 254, 263-64 (2001).

The Court noted that two states, Texas and Louisiana, have acknowledged that a lessee

may rightfully charge a lessor with a pro rata share of such post-production costs. [d. However,

a handful of states rejected this position where a lease, such as the one in Wellman, calls for

payments of the royalties on the basis of what the lessee receives from the sale of oil or gas. [d.

The rationale in holding that a lessee may not charge the lessor for post-production costs is

predicated on the idea that the lessee not only has a right under an oil and gas lease to produce oil

or gas, but they also have a duty, either express or under an implied covenant, to market said oil

or gas. [d. This rationale reasonably holds the duty to market includes the responsibility to get

the oil or gas in marketable condition and to bring it to market. [d. Ultimately, the Court held

where a lease provided for royalties based on a percentage of proceeds received by the lessor and

the lease is silent as to post-production costs, the lessor is responsible for all costs of bringing the

product to market. [d.

In addition to the holding in Wellman, several other jurisdictions have provided authority

and insight on this issue. Oklahoma has developed a rule based on a lessee's implied duty to

produce an oil and gas lease that it is implied to get the product to the place of sale in marketable

form. Wood v. TXO Production Corp., 1992 Okla. 100, 854 P.2d 880 (1992). Kansas has not

9

only found that there is a duty to produce under an oil and gas lease, but also that there is a duty

to find a market for the production. Gilmore v. Superior Oil Company, 192 Kan. 388, 388 P.2d

602 (1964). Arkansas finds that in a lease that states the lessor is to receive proceeds "at the well

for all gas" means gross proceeds, provided the lease is silent as to post-production costs. Hanna

Oil & Gas Co. v. Taylor, 297 Ark. 80, 759 S.W.2d 563 (1988). North Dakota finds when a lease

does not state otherwise, lessors are entitled to royalty payments based on a percentage of total

proceeds received by the lessee without the deduction of post-production costs. West v. Alpar

Resources, Inc., 298 N.W.2d 484 (N.D. 1980).

The lease between EQT and Plaintiffs is subject to West Virginia Code § 22-6-8 and

therefore provides for royalties to be paid based upon the proceeds EQT receives for the product

at market. It follows that EQT must bear the responsibility of bringing the product to market and

is prohibited from deducting such costs from Plaintiffs' royalty.

2. The Court's Opinion in Tawney v. Columbia Natural Resources, LLC, 219 W.Va. 266, 633 S.E.2d 22 (2006) properly holds the language of "at the wellhead" in a lease is insufficient to alter the standard rule that lessees bear the burden of postproduction expenses that was recognized in Wellman.

The Court in Tawney v. Columbia Natural Resources, LLC expanded upon the holding of

Wellman. In Tawney the Court concluded that the language of, or similar to, "at the wellhead"

was not sufficient to alter the general rule from Wellman that the lessee must bear all costs of

marketing and transporting the product to market. Tawney, 633 S.E.2d at 28. Columbia Natural

Resources (hereinafter "CNR") argued that while gas or oil is to be valued "at the wellhead" it

cannot be sold until the lessor takes additional steps to add value to the production and, because

of this, they should be permitted to deduct from the royalty the costs incurred in getting the

production to market. Id. at 26. The Court disagreed.

10

The Court noted a split of authority in other jurisdictions as to the effect of "at the

wellhead language" as the term relates to post-production costs. Rather than relying on authority

or argument solely from another jurisdiction, the Court looked to well-settled West Virginia

precedent in reaching its conclusion. Id. at 27. The Court reiterated the holding of Davis v.

Hardman, 148 W.Va. 82, 133 S.E.2d 77 (1963) that a distinguishing characteristic of a lessor's

royalty is that such interest is not subject to the cost of discovery of production. Id. The Court

also reiterated the holding in Wellman that this duty to produce oil or gas under a lease was

extended to bring the product to market. Id.

The Tawney Court found the language of "at the wellhead" in a lease was ambiguous

because it is not clear or precise as to how the royalty was to be calculated at the well. Id. at 28.

There were not specific sections regarding the marketing, transporting, or processing of the gas.

Id. Taking the well-established rule that the lessor bears the burden ofpost production costs and

the lack of any language stating a departure from this rule, the language of "at the wellhead" in a

lease is not enough to indicate that parties intended otherwise. Id. The Court further found that

even when the general language at issue was read with accompanying language such as "gross

proceeds," "market price," and "net of all costs" it still provides no certainty the parties intended

to change the general rule. Id. at 28-29. The Court found such language actually creates an

inherent conflict resulting in further ambiguity. Id.

In Wellman, CNR attempted to rely on language that stated, ''the "proceeds" shall be

from the "sale of gas as such at the mouth of the well where gas .. .is found" might be language

indicating that the parties intended that the Wellmans, as lessors, would bear part of the costs of

transporting the gas from the wellhead to the point of sale." Id. at 29. The Tawney Court

quickly dismissed this argument finding this language was in dicta and not essential to the

11

decision in Wellman. [d. The Court stated that such a new point of law is required by the West

Virginia Constitution to be made through syllabus points. [d. Further, Wellman did not decide

whether the language of "at the wellhead" was ambiguous. [d.

Ultimately, the Court found if the drafter of the leases intended for the lessee to bear any

cost of producing, marketing, transporting, or processing the gas or oil then they could have

written it into the contract with specific language that identifies exactly how the lessor's royalty

was to be calculated and what specific deductions for post-production costs would be made. [d.

29-30. Any language similar to "at the wellhead," "at the well," or that the royalty is calculated

at "1/8 of the price, net all costs beyond the wellhead," or "less all taxes, assessments, and

adjustments," is ambiguous and ineffective to penn it cost to be deducted from the lessor's

royalty. [d. at 30.

3. The plain language of West Virginia Code § 22-6-8(e) prohibits the deduction of post-production costs from a lessor's royalty.

The practice of oil and gas companies paying landowners a royalty of 1/8th or 12.5% of

the proceeds the oil and gas companies receive from sales is well established. The plain language

ofWest Virginia Code § 22-6-8(e) states that the lessee shall:

...tender to the owner of the oil or gas in place not less than one eighth of the total amount paid to or received by or allowed to the owner of the working interest at the wellhead for the oil or gas so extracted, produced or marketed before deducting the amount to be paid to or set aside for the owner of the oil or gas in place, on all such oil or gas to be extracted, produced or marketed from the well. If such affidavit is filed with such application, then such application for permit shall be treated as if such lease or leases or other continuing contract or contracts comply with the provisions ofthis section.

The statute clearly states that the lessee must pay the lessor a royalty of 1I8th of the total

received by the lessee "on all such oil or gas to be extracted, produced or marketed from the

well." Further, it is also clear from the plain and unambiguous language of the statute that this

12

royalty is to be paid on all oil or gas which was extracted, produced or marketed from the well

and placed into marketable fonn by the lessee and not on the volume used by the lessee after

losing various amounts in processing, compression and in transmission from the wellhead to the

market.

In interpreting a statute, the Court will look to the statute's plain language when

determining its meaning. Smith v. State Workmen '8 Compo Com'r, 159 W.Va. 108, 219 S.E.2d

362, Syl. pt. 1 (1975)(quoting Appalachian Power CO. V. State Tax Dep't, 195 W.Va 573, 466

S.E.2d 4424 (1995). The courts will not interpret a statute when the plain language is clear and

unambiguous and it fully expresses the intent of the legislature. State v. Epperly, 65 S.E.2d 488

(W.Va 1951). There is no language in the statue to pennit any deduction of post-production

costs from the one eighth royalty owed to lessors under the statute. The plain language expressly

prohibits deductions prior to payment of the royalty to landowners. Applying the plain language

of the statute, EQT is prohibited from deducting any post production costs from Plaintiffs'

royalty.

4. To the extent there is any ambiguity found in the statutory language, it must be construed in favor of the lessees.

At issue before this Court is the general language of "at the wellhead," as it applies in the

statute, not a lease. Assuming arguendo that the language is ambiguous, the Court correctly

observed that the language of "at the wellhead" used in the same industry context is as

ambiguous in the statute as it is in a lease. Leggett, et al. v. EQT Production Company, et al., _

W.Va. _, _ S.E.2d _,2016 WL 6835732, No. 16-0136 (W.Va Nov. 17,2016). The flat-rate

statute at issue provides no more specific guidance than the leases in Tawney relating to

13

valuation, royalty calculation, or the allocation of costs. As such, it is necessary to discern the

intent of the Legislature. Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (JI.Va. 1992).

The Legislature is presumed to know the current state of West Virginia law and that it

intends to enact statutes in harmony with existing law. State v. Snyder, 64 W.Va. 659, 63 S.E.

385 (1908). A statute should be read and applied to harmonize with the idea, purpose, and object

,; of the general law with which it is intended to be a part of Buda v. Town 0/Masontown, 217 9

W.Va. 284,617 S.E.2d 831, Syi. pt. 3 (2005). West Virginia courts have stated where a statute

is intended to fix an issue or concern; it should be construed liberally as to bring about the most

benefit. State ex reI. McGraw v. Scot Runyan Pontiac-Buick, Inc., 194 W.Va. 770,461 S.E.2d

516, 523 (1995).

It is quite obvious that West Virginia Code § 22-6-8 is a statute intended to correct a

concern of the Legislature that lessors were not receiving equitable royalty payments for the

lease of mineral rights. The "flat-rate statute" was enacted to correct inherent inequities created

by leases that became oppressive over time as the industry for natural gas evolved. When these

leases were originally written and entered into the market for nature gas was minimal and

production of natural gas was not worth much so the lease provided for a flat-rate of a minimal

amount. McGinnis v. Cayton, 174 W.Va. 102,312 S.E.2d 765 (1984). Now, however, there is a

substantial market for natural gas, and to apply the flat rate lease terms would produce

insurmountable inequities. Id. This is exactly what the Legislature intended to correct. "If the

intention of the Legislature is clear, that is the end of the matter." Appalachian, 195 W.Va. at

582, (quoting Chevron US.A., Inc. v. Nat. Res. Defense Council, Inc., 467 U.S. 837, 843 (1984».

It would be incongruous to construe the allegedly ambiguous language of "at the

wellhead" to allow a lessee to deduct post-production costs from the lessor's royalty given the

14

intent of the Legislature explained above. The statute was designed to benefit landowners and

any contrary reading would provide for inequitable results. This Court's Opinion filed November

17, 2016 is correct in holding that lessees are prohibited from deducting post-production

expenses from a royalty paid to a lessorllandowner for a flat-rate gas lease that converted to a

royalty lease under West Virginia Code § 22-6-8.

V. Prayer for Relief

Your amicus, Bounty Minerals, LLC respectfully requests that this Honorable Court

affinn its decision and order ofLeggett, et al. v. EQT Production Company. et al., _W. Va._,

_ S.E.2d _, 2016, and prohibit the deduction ofpost-production cost from Plaintiffs' statutorily

demanded one-eighth royalty.

Respectfully submitted,

DODARO, MATTA & CAMBEST, P.C.

15

$1.80

$1.60

$1.68

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$-

Ohio

BOUNTY MINERALS

Gas Royalty Deductions by State - 6 Month Average Bounty Minerals Horizontal Portfolio

$1.64

$1.49

« ii :E )(

w

25%

51%

34%

Pennsylvania _ Deductions _ Net Price

West Virginia

329 wells

...

Gas Royalty Deductions -West Virginia 6 Month Average Bounty Minerals Horizontal Portfolio a:l

:0$2.00 :2 x $1.80 w

$1.80 $1.67

$1.62 $1.57 $1.60

$1.40 $1.29

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00

OPERATOR A OPERATOR 8 OPERATORC OPERATORD OPERATOR E

_ DEDUCTIONS _NET PRICE -AVERAGE 67 wells

BOUNTY MINERALS


No. 16-0136

PATRICK D. LEGGETT; KATHERINE F. LEGGETT; GEORGE D. MCKAIN, by his attorney in fact,

ANITA KATHRYN MCKAIN GREER; and ADELE S. MCDOUGAL,

PlaintiffslPetitioners,

v.




DefendantslRespondents.

CERTIFICATE OF SERVICE

I, Michael J. Hammond, counsel for Bounty Minerals, LLC, do hereby certify that I have served the Rule 30 Notice ofIntent to File Amicus Curiae Briefon the following parties by mail at the addresses and by facsimile at the numbers set forth below or email:

Marvin W. Masters, Esquire The Masters Law Firm LC

181 Summers Street Charleston, West Virginia 25301

Fax: 1-304-343-3189

Richard A. Monohan, Esquire The Masters Law Firm LC


Fax: 1-304-343-3189

April D. Ferrebee, Esquire The Masters Law Firm LC


Fax: 1-304-343-3189

16

David K. Hendrickson, Esquire Hendrickson & Long, PLLC

214 Capitol Street Charleston, West Virginia 25301

Fax: 304-346-5515 Email: [email protected]

Carl L. Fletcher, Jr., Esquire Hendrickson & Long, PLLC


Fax: 304-346-5515 Email: [email protected]

Michael W. Carey, Esquire Carey, Scott, Douglas & Kessler, PLLC

901 Chase Tower 707 Virginia Street, East (25301)

P.o. Box 913 Charleston, West Virginia, 25323

Timothy M. Miller, Esquire Babst, Calland, Clements & Zimnir, P.e.

Suite 1000 300 Summer Street

Charleston, West Virginia 25301 Email: [email protected]

Howard M. Persinger III, Esquire Persinger & Persinger, L.C.


Fax: 304-346-9337

DODARO, MATTA & CAMBEST, PC 1900 Main Street, Suite 207 Canonsburg, P A 15317 Tel: (412) 243-1600 Fax: (412) 243-1643 Email: [email protected]

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amicus brief, Patrick D. Leggett, et al. v. EQT Production … · 2017. 3. 17. · production, consistent with established West Virginia law. Through this brief, Bounty will attempt