Stephen A. Cozen, founder and chairman of Cozen O’Connor, is quoted in Law360 discussing the oil and gas lease matter Shedden v. Anadarko. The Pennsylvania Supreme Court’s decision Tuesday that oil and gas lease agreements remain valid despite the later discovery of deed restrictions decisively establishes that a longstanding principle of property law applies to the energy sector and suggests that the newly reconstituted court is inclined to follow precedent on title issues.
The court ruled in favor of Anadarko E&P Co. LLP finding that a lease granting the company access to oil and gas under a Tioga County couple’s 62-acre property remained intact as drafted, even after it was discovered that the land was subject to a previously unknown 19th century deed restriction reserving half the land's subsurface rights.
In affirming a 2014 Superior Court ruling, the court established that the doctrine of “estoppel by deed” — which mandates that lessees get the benefit of land that lessors did not originally possess at the time the lease was drafted but subsequently gained the rights to — applies to oil and gas leases.
“This has been the law of the commonwealth for 150 to 160 years, and it now applies to the Marcellus Shale boom and the ability of oil and gas companies to acquire property to take advantage of it,” said Steve.
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