Two companies operating in the Marcellus Shale said they do not believe a recent ruling by the Pennsylvania Supreme Court will have an impact on their substantial leaseholds in that state’s portion of the play.

On Sept. 7 the state’s highest court reversed and remanded a lower court decision in Butler v. Charles Powers Estate, ruling that plaintiffs in the case should be allowed to make the argument that Marcellus Shale meets the legal definition of a “mineral.” Under that scenario, shale gas would be considered a commodity in the same manner as coalbed methane is a commodity derived from coal. In Pennsylvania commodities must be specifically mentioned in lease agreements to be valid (see NGI, Sept. 19).

Cabot Oil & Gas Corp. announced last Monday that it has reviewed legal documents surrounding its leasehold in Susquehanna County, PA, and determined that the ruling will have little to no impact on the Houston-based company.

“The Butler case concerns language severing the minerals from the surface,” Cabot CEO Dan Dinges said. “Cabot’s leases have express language covering oil and gas; therefore we do not see an impact of the Butler case on Cabot’s leasehold.”

On Sept. 25, Range Resources Corp. said its largest leases in Lycoming County, PA, were acquired from owners who acquired their interest from mineral tax assessments created by reservations that specifically treat “minerals” and “gas” on the same basis. The company found that 85% of sampled leases in southwestern Pennsylvania were from owners with full ownership of oil, gas and minerals. On the remaining 15%, the company said it would have to analyze the specific language of the leases to see if any partial interests or rights were held by other parties.

According to the latest figures in NGI’s Shale Daily, Range has a position of 1.048 million net acres in the Marcellus, second only to Chesapeake Energy Corp. Meanwhile, Cabot has a position of 193,000 net acres in the Marcellus.

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