Argued December 9, 2015
Amended: February 8, 2016.
Appeal from the United States District Court for the Northern District of West Virginia, at Wheeling. (5:13-cv-00152-JPB). John Preston Bailey, District Judge.
Nicolle Renee Snyder Bagnell, REED SMITH LLP, Pittsburgh, Pennsylvania, for Appellants.
Stephen A. Wickland, Clarksburg, West Virginia, for Appellee.
Kevin C. Abbott, Lucas Liben, REED SMITH LLP, Pittsburgh, Pennsylvania; Michael W. Smith, R. Braxton Hill, IV, CHRISTIAN & BARTON LLP, Richmond, Virginia, for Appellants.
Before NIEMEYER, DUNCAN, and AGEE, Circuit Judges.
DUNCAN, Circuit Judge
This appeal concerns an oil and gas lease (the " Lease" ) between Defendants-Appellants Equitrans, L.P., and EQT Production Co. (collectively, " EQT" ), as lessees, and Plaintiff-Appellee K & D Holdings, L.L.C. (" K & D" ), as lessor. The district court concluded that the Lease was divisible into two separate segments--one for production and exploration, and one for gas storage and protection of gas storage--and found that the production and exploration segment of the Lease had terminated after the Lease's initial five-year term. On appeal, Appellants contend that the Lease is not divisible and that because they are actively engaged in one of the activities covered by the Lease--protection of stored gas--the entire Lease remains in effect.
For the reasons stated below, we conclude that the district court erred and, accordingly, we reverse and remand with instructions to enter judgment for EQT.
On December 2, 1989, Henry H. Wallace and Sylvia L. Wallace executed an oil and gas lease with Equitrans, Inc., covering 180 acres of land in Tyler County, West Virginia (the " Premises" ). K & D is the successor-in-interest to the lessors, the
Wallaces, and Equitrans, L.P., is the successor-in-interest to the lessee, Equitrans, Inc. Equitrans, L.P., subleased to EQT Production Co. the rights to produce and sell gas from the " premises and subsurface formations that are not used for the storage of gas or protection of stored gas." J.A. 254. ...