Mountaineer Minerals, LLC v. Antero Resources Corporation
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT ANTERO RESOURCES' SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF MOUNTAINEER MINERALSSUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT. Defendant Antero ResourcesCorporation's supplemen tal motion for summary judgment (ECF No. 90 (titled Supplemental Brief in Support of Antero Resources Corporation's Motion for Summary Judgment) is GRANTED. Accordingly, plaintiff Mountaineer Minerals, LLC's supplemental motion for summar y judgment (ECF No. 91 - titled Supplemental Memorandum on Remand from the United States Court of Appeals for the Fourth Circuit) is DENIED. It is further ORDERED that this civil action be DISMISSED and STRICKEN from the active docket of this Court. Signed by Senior Judge Frederick P. Stamp, Jr on 11/5/2019. (wrr)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MOUNTAINEER MINERALS, LLC,
a West Virginia limited
Civil Action No. 1:16CV28
ANTERO RESOURCES CORPORATION,
a Delaware corporation formerly known as
Antero Resources Appalachian Corporation,
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANT ANTERO RESOURCES’
SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT
AND DENYING PLAINTIFF MOUNTAINEER MINERALS’
SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT
In this civil action, three oil and gas companies, Antero
Resources Corporation (“Antero Resources”), Mountaineer Minerals,
LLC (“Mountaineer Minerals”), and Perkins Oil and Gas (“Perkins”),
assert some interest in the rightful ownership of oil and gas
100-year-old lease (the “Collins Lease”).1
Perkins currently owns
and operates oil and gas wells that extract oil and gas from
Perkins is not a party to this action since Perkins and
plaintiff Mountaineer Minerals entered into a contract under which
the plaintiff would pay Perkins a sum in exchange for Perkins
assigning its Collins Lease rights to the plaintiff, after a
determination that the plaintiff is the rightful owner. In the
meantime, Perkins gave plaintiff Mountaineer Minerals access to its
mineral rights in exchange for $1.00 and Mountaineer Minerals’
assurance to defend, protect, indemnify, and hold harmless Perkins
from litigation, etc.
beneath the Collins Lease property. Defendant Antero Resources and
plaintiff Mountaineer Minerals both seek ownership of the Marcellus
Defendant Antero Resources purports to have purchased the
Marcellus Rights from Crude Oil and Gas Company (“Crude”).
to any of the parties having an interest, the Collins Lease mineral
rights were divided into what has been described in this civil
action as shallow rights and deep rights.
This Court will briefly outline the division of shallow rights
and deep rights under the Collins Lease. However, this Court notes
assignment of the rights under the Collins Lease was recorded in
Ritchie County, West Virginia.
The only one that was not recorded
in Ritchie County was Crude’s 1985 assignment to Monongahela
Leasing (“Monongahela”). That was improperly recorded in Doddridge
County, West Virginia.
Second, two assignments do not reference
the Collins Lease by name: (1) the 1985 assignment from Crude to
Monongahela; and (2) the 1986 assignment from Monongahela to Farr.
In 1984, P.D. Farr (“Farr”) was the owner of both the shallow
rights and deep rights under the Collins Lease. However, that same
year, Farr assigned his deep rights under the Collins Lease to
The following year, Crude assigned its deep rights to
back to Farr.
Then, in 1986, Monongahela assigned its deep rights
In 1991, Farr assigned his shallow rights to Key
Oil, which assigned those shallow rights back to Farr about one
Therefore, at the time of the Subject Assignment in
1996, Farr owned both the shallow rights and deep rights under the
On August 30, 1996, Farr assigned, in a document
titled “General Assignment and Bill of Sale” (hereinafter, the
“Subject Assignment”), two wells (API well numbers 47-85-03583 and
47-85-02520) (the “Assigned Wells”) and the associated leasehold
rights to operate those wells to Perkins.
No. 82 at 6.
ECF No. 90-1 at 1; ECF
The parties dispute whether the Subject Assignment
assigned both the shallow rights and deep rights, and whether the
Subject Assignment pertained only to the wells or included all
leasehold rights under the Collins Lease.
In 2010, defendant
Antero Resources became interested in purchasing the Marcellus
Rights as to those wells and it began negotiating with Perkins to
negotiations with Perkins, defendant Antero Resources obtained an
ownership report in November 2012 which was based on an examination
of only Ritchie County records.
Therefore, that report did not
include the 1985 assignment from Crude to Monongahela which was
recorded in Doddridge County, as stated above.
Moreover, in 2015, Perkins assigned its rights to
plaintiff Mountaineer Minerals.
This Court entered a memorandum opinion and order that granted
plaintiff Mountaineer Minerals’ motion for summary judgment and
denied defendant Antero Resources’ motion for summary judgment.
ECF No. 76.
This Court, at that time, concluded that defendant
Antero Resources had notice of Perkins’ ownership interest in the
determine whether Perkins owned such rights.
Id. at 10, 15.
Court concluded that defendant Antero Resources was not a bona fide
purchaser and did not purchase its interest in the Collins Lease in
Id. at 16.
Therefore, this Court declared that
Perkins’ ownership interest was not void and plaintiff Mountaineer
Minerals was the rightful owner of the Marcellus Rights.
The United States Court of Appeals for the Fourth Circuit
vacated and remanded the judgment of this Court in order to resolve
a genuine issue of material fact — which rights in the Subject
Assignment did Farr assign to Ritchie.
According to the Fourth
Circuit, the main issue is whether Ritchie, and thereby Perkins,
and thereby plaintiff Mountaineer Minerals, obtained the Marcellus
Rights under the terms of the Subject Assignment.
ECF No. 82 at
Prior to remand, it was unclear based on the record whether
Ritchie obtained the Marcellus Rights.
If Ritchie obtained the
Marcellus Rights then plaintiff Mountaineer Minerals would be the
rightful owner of such rights.
Following the remand from the Fourth Circuit, this Court set
a briefing schedule and oral argument on September 12, 2019 to
address the issue remaining following remand – namely, which rights
Farr assigned to Ritchie in 1996, as those rights pertain to API
ECF No. 87.
Defendant Antero Resources
indicated at oral argument in this Court following the remand,
without objection by plaintiff Mountaineer Minerals, that the
Fourth Circuit “was satisfied that the depth of the other well
[(API Number 47-85-02520)] was shallow under anyone’s definition of
ECF No. 97 at 6.
Currently pending before this Court are the following briefs
together with responses and replies: (1) a supplemental brief by
Antero Resources in support of summary judgment (ECF No. 90); and
(2) a supplemental brief by Mountaineer Minerals in support of
summary judgment (ECF No. 91).
The Court will summarize the
contentions of the parties in turn.
Plaintiff Mountaineer Minerals contends that the Marcellus
Rights were assigned to Ritchie.
ECF No. 91 at 12.
plaintiff Mountaineer Minerals states that in 1986, Monongahela
assigned to Farr the Marcellus Rights and that in 1991, Farr owned
all shallow rights as well.
ECF No. 92 at 5.
plaintiff Mountaineer Minerals, pursuant to the legal doctrine of
merger, there is no longer a division of leasehold depths at the
bottom of the fifth sand formation, but all leasehold rights and
depths merged together and were owned by Farr in 1991.
Therefore, plaintiff Mountaineer Minerals concludes that, at the
time of the Subject Assignment, Farr owned any and all leasehold
rights and he assigned those rights to Ritchie without exceptions
Plaintiff Mountaineer Minerals further
maintains that a strict interpretation of the language in the
Subject Assignment and lack of words of limitation leads to the
conclusion that the Marcellus Rights, and not just the wells, were
assigned to Ritchie, and thereby to the plaintiff.
ECF No. 91 at
Plaintiff Mountaineer Minerals then contends that even if
this Court were to find the Subject Assignment’s terms to be
ambiguous, Ritchie would still receive the leasehold acreage and
not just the wells based on the principle that all ambiguities are
to be construed strictly against the assignor and in favor of the
Id. at 17.
In support, plaintiff Mountaineer Minerals
states that it hired Tom O’Neill to provide a third-party title
opinion (hereinafter “Title of Perkins”) on the Collins leasehold
ownership, and he found that Perkins was the owner only insofar as
that oil and gas leasehold extends below the bottom of the fifth
Mountaineer Minerals refers to defendant Antero Resources’ November
30, 2012 Revised Limited Ownership Report and the October 29, 2012
Limited Ownership Report, stating that those reports serve as
further evidence that Perkins acquired any and all leasehold rights
and not just the wells.
Id. at 19-20.
Defendant Antero Resources asserts that the Subject Assignment
did not include the Marcellus Rights because neither assigned well
reached the depth of the Marcellus Shale Formation.
ECF No. 90
at 6. Defendant Antero Resources cites the following in support of
that conclusion: (1) the terms of the Subject Assignment; (2)
plaintiff Mountaineer Minerals, and (4) various public documents.
Id. at 7-12. Defendant Antero Resources stresses the importance of
the Fourth Circuit’s finding that Farr assigned to Ritchie his
interest in only two wells.
ECF No. 95 at 8-9; see ECF No. 82 at 6
(“In 1996, Farr assigned to [Ritchie] all [Farr’s] right, title,
and interest in and to two specific oil and/or gas wells.”)
(internal quotation marks omitted).
Therefore, defendant Antero
Resources claims that while the Collins Lease applied to all depths
and formations, the Collins Lease does not shed light on the depths
and formations covered by later assignments. Id. at 10. Moreover,
conveying the Assigned Wells, along with the leasehold interests
necessary to operate them, from his larger interest in the Collins
Id. at 10-11.
Therefore, defendant Antero Resources
concludes that words of limitation were not necessary.
Id. at 11.
Further, defendant Antero Resources indicates that the Title of
Perkins which was prepared by Tom O’Neill & Associates, is unsworn,
not previously admitted, has not been authenticated, and that Mr.
O’Neill was never disclosed as an expert; therefore, it should not
ECF No. 93 at 19-20.
Even if the Court considers
the Title of Perkins, defendant Antero Resources notes that the
Title of Perkins does not specifically address the Marcellus Shale
Formation or delineate depths.
Under Rule 56(c) of the Federal Rules of Civil Procedure,
A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in the
record, including depositions, documents, electronically
stipulations . . . admissions, interrogatory answers, or
other materials; or
(B) showing that the materials cited do not
establish the absence or presence of a genuine dispute,
or that an adverse party cannot produce admissible
evidence to support the fact.
Fed. R. Civ. P. 56(c).
The party seeking summary judgment bears
the initial burden of showing the absence of any genuine issues of
See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
“The burden then shifts to the nonmoving party to come
forward with facts sufficient to create a triable issue of fact.”
Temkin v. Frederick County Comm’rs, 945 F.2d 716, 718 (4th Cir.
1991), cert. denied, 502 U.S. 1095 (1992) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). However, as the
United States Supreme Court noted in Anderson, “Rule 56(e) itself
provides that a party opposing a properly supported motion for
summary judgment may not rest upon the mere allegations or denials
of his pleading, but . . . must set forth specific facts showing
that there is a genuine issue for trial.”
Anderson, 477 U.S. at
256. “The inquiry performed is the threshold inquiry of determining
whether there is the need for a trial — whether, in other words,
there are any genuine factual issues that properly can be resolved
only by a finder of fact because they may reasonably be resolved in
favor of either party.”
Id. at 250; see also Charbonnages de
France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979) (“Summary
judgment ‘should be granted only in those cases where it is
perfectly clear that no issue of fact is involved and inquiry into
the facts is not desirable to clarify the application of the law.’”
(citing Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th
In Celotex, the Supreme Court stated that “the plain language
of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who
fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party
will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322.
In reviewing the supported underlying facts, all inferences must be
viewed in the light most favorable to the party opposing the
motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986).
Following its review of the parties’ supplemental motions,
consideration of the parties’ contentions at oral argument on
September 12, 2019, and for the reasons set forth below, this Court
finds that plaintiff Mountaineer Minerals cannot prevail on its
claims against defendant Antero Resources because: (1)the Subject
Assignment only pertained to two particular wells (API Numbers
47-85-03583 and 47-85-02520) and the leasehold interests that
relate to those wells; and (2) the two subject wells, particularly
API Number 47-85-03583, do not reach the Marcellus Shale Formation.
The Court will address each issue in turn.
A. Farr only assigned Ritchie the interest in two wells and only
the leasehold interests that relate to those wells
The parties disagree as to whether the Fourth Circuit’s
mandate, in Case No. 17-2058 vacating this Court’s earlier judgment
and remanding this case to this Court, should be interpreted
narrowly or broadly.
Specifically, defendant Antero Resources
contends that this Court should adopt a narrow construction of the
Fourth Circuit’s holding, indicating at oral argument that the
issue pertains to which rights Farr assigned to Ritchie in the
See ECF No. 97 at 3-4.
Resources asserts that Farr only assigned Ritchie the interest in
two wells and only the leasehold interests that relate to those
See id. at 4.
Defendant Antero Resources cites the Fourth
Circuit’s opinion where it stated “if the well does not reach the
Marcellus Rights, the record leaves no reason to conclude that
Ritchie obtained the Marcellus Rights in 1996.”
See id. at 5; see
also ECF No. 82 at 10.
Conversely, plaintiff Mountaineer Minerals contends that the
mandate directs this Court to determine what rights were assigned
in the Subject Assignment.
See id. at 16.
Minerals asserts that the Subject Assignment not only assigned the
interests in the two subject wells, but also any and all leasehold
leasehold under the Collins Lease.
See id. at 18-19.
After review of the parties’ briefs and contentions at oral
argument, this Court believes that the Fourth Circuit’s mandate
requires a narrow construction.
Specifically, this Court finds
that “Farr assigned to Ritchie his interest in two wells.” ECF No.
82 at 10; see also id. at 6 (“In 1996, Farr assigned to Ritchie
Petroleum Corporation (“Ritchie”) all [Farr’s] right, title, and
interest in and to two specific oil and/or gas wells.”) (internal
[T]he first part does hereby grant, convey,
transfer, assign, sell and set over unto the said party
of the second part, all of its right, title and interest
in and to the following oil and/or gas wells and any and
all leasehold rights associated therewith:
That certain oil and/or gas well, known
as the Hughes Group #1 Well, bearing API Well
No. 47-85-03583, and that certain oil and/or
gas well known as the B & W Producers #1, API
47-85-02520, both being situate upon that
certain tract or parcel of land, containing
578 acres, in Clay District, Ritchie County,
West Virginia, and drilled under a lease from
William J. Collins and Sarah Collins, his
wife, to B. D. Willis, and dates June 11,
1919, of record in Oil and Gas Lease Book 42,
For the consideration aforesaid, the said parties of
the first part does further grant, convey, transfer,
assign sell and set over unto the party of the second
part, all of its right, title and interest, if any, in
and to any and all casing in the well herein assigned,
tanks and surface equipment used in connection with the
same. It is the intention of the parties of the first
part by this Assignment to assign and convey unto the
said party of the second part, said well and the casing
forming a part thereof and all of its interests in the
drilling, producing and operating rights for the same,
which were assigned to the parties of the first part in
the chain of title.
The party of the second part, by executing this
Agreement, expressly covenants, warrants, and agrees to
assume and perform any and all obligations and
responsibilities of the parties of the first part herein,
of any kind or character whatsoever, for plugging said
. . . .
The Assignee expressly covenants and warrants that
it will perform, abide by and comply with all the terms
and conditions of any such instruments insofar as such
terms, conditions and obligations are applicable to the
rights herein assigned, including, but not limited to,
payment of all lease rentals and royalties, if
applicable, and the providing of free gas to any parties
having the right to receive the same under the terms of
the lease under which the well herein assigned was
drilled . . .
ECF No. 90-1 at 1-2 (emphasis added).
Based on the plain and unambiguous language of the Subject
Assignment, this Court finds that Farr transferred to Ritchie and
therefore to Perkins only the two Assigned Wells and leasehold
rights only insofar as those rights pertained to those specific
This conclusion is supported by references within
the Subject Assignment pertaining to certain details regarding the
casing of the wells, royalty obligations, and the assignee’s
interest in the drilling, producing, and operating rights as they
relate to the Assigned Wells. This conclusion is further bolstered
by the October 29, 2012 Limited Ownership Report which states in
the index section that, with respect to the Subject Assignment,
“[p]arties of the first part does hereby grant, convey, transfer,
assign, sett and set over unto the party of the second part, all of
its RTI in and to oil and gas wells and any and all leasehold
rights associated therewith.”
ECF No. 53-22 at 31.
This Court notes that while it is true that in 1991 when Key
Oil assigned its shallow rights back to Farr, Farr was the owner of
both the shallow rights and the deep rights under the Collins
Lease, defendant Antero Resources is correct in stating that Farr
is fully capable of conveying a limited estate from his larger
interest in the Collins Lease.
See ECF No. 93 at 17.
Lastly, contrary to plaintiff Mountaineer Minerals’ contention
Assignment the leasehold rights extend to any and all leasehold
rights, this Court finds that because the Subject Assignment was
limited to the Assigned Wells, no reservation language was needed
to restrict the leasehold rights.
In other words, because the
leasehold rights necessary to operate those Assigned Wells, Farr
owned the rest of the leasehold rights in the Collins Lease.
Faith United Methodist Church and Cemetery of Terra Alta v. Morgan,
231 W. Va. 423, 431 (W. Va. 2013) (“When [a] fee severance is
completed, separate and distinct estates are created, each being a
fee simple estate in land, having all the incidents and attributes
of such an estate . . .
Each estate may be conveyed and dealt with
as any other fee simple, and estates therein of less quality may be
created . . .”).
B. API Number 47-85-03583 did not include the Marcellus Rights
As the Fourth Circuit has noted, the record indicates that:
(1) the deep rights begin where the shallow rights end; (2) the
shallow rights extend through the fifth sand formation; (3) the
deep rights begin after the fifth sand formation; (4) the fifth
sand formation is thousands of feet above the Marcellus Shale
Formation; and (5) the deep rights include the Marcellus Rights.
ECF No. 82 at 4.
The record further indicates that the fifth sand
formation is thousands of feet above the Marcellus Shale Formation,
but the record does not indicate the exact depth at which the fifth
sand formation ends or the exact depth at which the deep rights
Id. at 10.
Therefore, prior to the Fourth Circuit’s
remand, it was unclear whether API Number 47-85-03583 reaches the
Marcellus Shale Formation.
The Fourth Circuit made it clear
that “if the well does not reach the Marcellus Rights, the record
leaves no reason to conclude that Ritchie obtained the Marcellus
Rights in 1996.”
After review of the supplemental briefs, responses, replies,
and after considering the arguments presented at oral argument
pertaining to the supplemental briefs, this Court finds that
Perkins did not own the Marcellus Rights it claims to have conveyed
to plaintiff Mountaineer Minerals.
discussed in detail at oral argument, the fifth sand formation lies
in the Upper Devonian region and extends down to near what is
labeled as “Hamilton Group” in the Middle Devonian region. See ECF
Based on the record, API Number 47-85-03583 did
not reach the Marcellus Shale Formation.
As indicated by the
Fourth Circuit, API Number 47-85-03583 extends to a depth of about
ECF No. 82 at 6.
The November 30, 2012 Limited
Ownership Report states that after API Number 47-85-03583 was
recompleted to a producing depth of about 6,000 feet, the well was
considered to be within the “Alexander” formation.
ECF No. 90-2
Based on the stratigraphic chart (ECF No. 90-4), the
Alexander region lies within the fifth sand formation, in the Upper
Devonian region, above the Marcellus Shale Formation.2
Indeed, plaintiff Mountaineer Minerals stated at oral argument
that “Perkins did not drill the well down into the Marcellus but
right above it.”
See ECF No. 97 at 36.
Rather than disputing
defendant Antero Resources’ evidence, throughout oral argument,
plaintiff Mountaineer Minerals focused on how the division of deep
rights versus shallow rights is irrelevant since all leasehold
rights under the Collins Lease were transferred to Perkins.
id. at 17.
Based on the material presented in the supplemental briefs and
the statements at oral argument, this Court finds that API Number
Similarly, the November 30, 2012 Limited Ownership Report
states that API Number 47-85-02520 is located within the Injun
region, above the Marcellus Shale Formation. ECF No. 90-2 at 8.
47-85-03583 does not reach the Marcellus Rights, and accordingly
Therefore, after considering all the evidence indicating that the
Assigned Wells, particularly API Number 47-85-03583, lies within
the fifth sand formation in the Upper Devonian region, “the record
leaves no reason to conclude that Ritchie obtained the Marcellus
Rights in 1996.”
ECF No. 82 at 10.
Because Ritchie never obtained
the Marcellus Rights in 1996, Perkins was never assigned those
Therefore, plaintiff Mountaineer Minerals could not have
received those rights by assignment.
For the reasons set forth above, defendant Antero Resources
Corporation’s supplemental motion for summary judgment (ECF No. 90)
Accordingly, plaintiff Mountaineer Minerals, LLC’s
supplemental motion for summary judgment (ECF No. 91) is DENIED.
It is further ORDERED that this civil action be DISMISSED and
STRICKEN from the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
on this matter.
November 5, 2019
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?