The state Supreme Court has validated the royalty terms of leases between gas companies and landowner-lessors in the Marcellus Shale in a ruling that marks a win for natural gas drillers in Pennsylvania and could affect more than 70 suits pending in state and federal courts.
The six-justice panel — former Justice Jane Cutler Greenspan did not participate — upheld a Susquehanna County trial court’s ruling that the landowner royalty calculation in the leases, which subtracts one-eighth of the post-production costs of the gas from one-eighth of the sale price, does not violate the Guaranteed Minimum Royalty Act.
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