Wyoming Supreme Court: Pennaco Natural Gas, LLC, liable for surface damage recovery to local landowner

(Cheyenne, Wyo.) — The Wyoming Supreme Court has ruled in favor of a local rancher who sought damages of over $1 million from Pennaco Natural Gas, LLC. According to court documents, the case arose from Pennaco Energy Inc.’s refusal to perform obligations under a surface damage and use agreement. Pennaco acquired mineral leases beneath a surface estate owned by Brett Sorenson, Trustee of the Brett L. Sorenson Trust. Pennaco and Sorenson negotiated a contract concerning damage to and use of the surface estate. It granted Pennaco access to and use of the land during exploration for and production of minerals it had leased. In return, Pennaco agreed to pay for damage to and use of the surface estate, and to reclaim the land once operations ended, according to Wyoming State Supreme court documents. Pennaco began drilling and production operations on Sorenson’s land. It continued operations and made the requisite payments to Sorenson for a number of years, but then decided to sell its oil and gas interest to CEP-M Purchase, LLC. As part of the sale, Pennaco assigned its interest in the operations and agreements to CEP-M, which reassigned those interests to another company, High Plains Gas, Inc. Since then, neither Pennaco nor the assignees have made any of the payments required by the surface damage and use agreement and have not reclaimed Sorenson’s land. Sorenson brought this lawsuit against Pennaco, CEP-M and High Plains Gas to recover the unpaid surface damage and use payments, and for damages resulting from the failure to reclaim lands and repair water wells. Pennaco answered and unsuccessfully moved for summary judgment, after which the case made its way to a jury trial. The jury rendered a verdict finding that Sorenson suffered $1,055,982.62 in damages. The district court entered judgment on the jury’s verdict, and also awarded Sorenson costs and attorney fees, as provided for in the contract, in the amount of $332,662.97. Pennaco appealed the case, but on March 11, the Wyoming Supreme Court ruled that the district court "did not err" in determining that Pennaco continued to remain liable after assignment for the obligations under the surface damage and use agreement. See the full opinion here . #dally #news