In Pa., 'Good Faith' Determines 'In Paying Quantities'
May 8, 2012, 1:25 PM EDT
Law360, New York (May 8, 2012, 1:25 PM EDT) -- On March 26, 2012, the Pennsylvania Supreme Court issued its long-awaited decision in the case of T.W. Phillips Gas & Oil Co. v. Jedlicka, reaffirming that Pennsylvania law from 1899 requires the determination of whether a well is producing "in paying quantities" to be made "with reference to an operator's good faith judgment." Jedlicka, No. 19 WAP 2009, p. 1 (majority opinion).
Importantly, the burden of proof and persuasion is on the lessor to establish a lack of good faith on the part of the lessee....