Oil and Gas Leases: Assignments; Wellbore Versus Lease Assignments: Ambiguity

摘要

In August 1998, Powder River purchases from Forcenergy Onshore, Inc., certain interests in Wyoming. One of the designated interests relates to a federal oil and gas lease and a well located thereon, In January 2005, Comet contacts Powder River about purchasing a number of interests that were the subject of the 1998 Assignment. In conducting a due diligence review, Comet determines that as to the well and lease in question Forcenergy only conveyed an interest in the well and the unit surrounding the well and not the full 760-acre federal leasehold interest Comet has Forcenergy execute a quitclaim assignment to the interest outside of the well unit in the 760-acre tract. In August 2005, Comet records this assignment with BLM, which leads to this declaratory judgment action being filed by Powder River. Powder River asserts that it is the owner of all of the leasehold interests in the 760-acre tract covered by the federal oil and gas lease. The trial court issues a summary judgment order in favor of Powder River and Comet appeals. Held: reversed and remanded. Under Wyoming law, assignments are treated as contracts and thus subject to the canons of construction and rules of interpretation mat generally apply to contracts. Wyoming follows a hierarchy of canons of construction, first applying a plain meaning approach to ascertain the intent of the parties as expressed in the written instrument.