MORGANTOWN, W.Va. -- A federal judge has dismissed Glenville-based Waco Oil and Gas from a lawsuit a Marion County man filed over plans to use his property for deep, horizontal wells that would drain natural gas from his neighbors' reserves.
Richard Cain initially sued Waco and Exxon Mobil subsidiary XTO Energy in circuit court last summer; the case was transferred to U.S. District Court in Clarksburg. In a recent ruling, Judge Irene Keeley said she'll retain jurisdiction, but she granted Waco's motion to dismiss claims against it.
The case illustrates the complexity and intertwined nature of mineral and surface rights in a region where companies are rushing to tap the vast deposits of the Marcellus Shale field.
Cain concedes that he doesn't own the mineral rights, which were sold in 1881 and have changed hands several times. But he argues that ownership of those mineral rights doesn't give a company the authority to drill multiple wells or disrupt 36 of his 105 acres to get oil and gas from neighboring estates.
Cain contends that the amount of gas to be recovered is too minute to justify such extensive surface disruption and insists he's the only party with the "legal right" to lease his surface.
There's no dispute that Cain bought the land in 1989, Keeley said. "The ownership history of the oil and gas rights themselves, however, is somewhat more convoluted."
Waco, which sold leases to Linn Energy Holdings LLC in 2003, argued it had done nothing wrong and that Cain's fight is with the current leaseholder, XTO. After Cain sued the two companies, Waco sold "the entirety of its interests in the oil and gas estate" under Cain's property to XTO.
XTO, meanwhile, has also denied doing anything illegal. It argues it paid $63,000 for a pipeline right-of-way easement to transport oil, gas, water and other substances across Cain's property.
The court ruled that XTO's lease gives it the clear right to access adjoining property through pipelines but said it "does not otherwise provide the right to use the surface of the tract to explore for or produce oil and gas from neighboring oil and gas estates."
Still, Keeley said, Cain lacks grounds for a dispute with Waco.
Cain and XTO have until Friday to submit a proposed plan for evidence in the case. A scheduling conference is set for April 20.