Linder v. Swepi, LP, 111813 FED3, 13-1674

Docket Nº:13-1674
Opinion Judge:HARDIMAN, Circuit Judge.
Party Name:GEORGE W. LINDER, SR., Trust; WILLIAM H. LINDER, II, Trustee v. SWEPI, LP, a/k/a Shell Western Exploration and Production, LP GEORGE W. LINDER, SR.; WILLIAM H. LINDER, II, Appellants
Judge Panel:Before: HARDIMAN, SHWARTZ and SCIRICA, Circuit Judges.
Case Date:November 18, 2013
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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GEORGE W. LINDER, SR., Trust; WILLIAM H. LINDER, II, Trustee

v.

SWEPI, LP, a/k/a Shell Western Exploration and Production, LP GEORGE W. LINDER, SR.; WILLIAM H. LINDER, II, Appellants

No. 13-1674

United States Court of Appeals, Third Circuit

November 18, 2013

NOT PRECEDENTIAL

Submitted Under Third Circuit LAR 34.1(a) November 14, 2013.

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. No. 11-cv-01579) District Judge: Honorable Sylvia H. Rambo.

Before: HARDIMAN, SHWARTZ and SCIRICA, Circuit Judges.

OPINION

HARDIMAN, Circuit Judge.

The George W. Linder, Sr., Trust and its trustee, William H. Linder II (collectively, the Trust), appeal the District Court's summary judgment on their claims for a declaratory judgment against Shell Western Exploration and Production, LP (SWEPI). We will affirm.

I

By written lease dated September 27, 2000 (the Lease), George and Phyllis Linder (the Trust's predecessor-in-interest) leased the oil and gas rights for 338 acres to SWEPI's predecessor-in-interest, Allegheny Energy Development Corporation. The initial Lease term was ten years with potential for extension pursuant to conditions typical in the industry. Before production began, the Lease required Allegheny Energy to make an annual delay payment of $3.00 per acre. Once production began, Allegheny Energy was to pay royalties instead of delay rentals. The Lease also provided that it would continue in effect past the initial term as long as productive activity continued. If Allegheny Energy was not engaged in productive activity when the initial ten-year term expired, the Lease authorized it to extend the Lease for ten more years by making an extension payment of $3.00 per acre prior to the expiration of the initial term in September 2010.

During the initial term of the Lease, Allegheny Energy sold its rights thereunder to East Resources Management, LLC, which unitized1 an area of 526.94 acres, 137.81 acres of which were part of the 338-acre Leasehold. Thus, 200.19 acres of the Leasehold were never unitized.

Before this litigation began, SWEPI acquired East Resources and its leases, and the Trust succeeded the Linders as lessor. The Trust and SWEPI agree that the Lease continued past the expiration of the initial term in September 2010 for the unitized acreage because SWEPI continued to engage in productive activity on the unit...

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