United States: Pennsylvania Supreme Court Holds Estoppel By Deed Applies To Oil And Gas Leases

Executive Summary In the Court's first decision on oil and gas issues since three new justices were elected, the Pennsylvania Supreme Court recently held that the doctrine of estoppel by deed applies to oil and gas leases.

In Shedden v. Anadarko E. & P. Co., No. 103-MAP-2014 (Pa. Mar. 29, 2016), the Pennsylvania Supreme Court recently affirmed a Superior Court decision holding that estoppel by deed applies to oil and gas leases. The Supreme Court opinion, authored by Justice Todd, is the Court's first opinion addressing issues concerning oil and gas law since the composition of the Court changed. Specifically, three new justices, David Wecht, Kevin Doughtery, and Christine Donohue, were recently elected to the Supreme Court in November 2015, and Justice Michael Eakin recently resigned from his position in March 2016. Justices Wecht and Doughtery both joined the majority decision, along with Chief Justice Saylor and Justice Baer. Justice Donohue did not participate in the decision because she was a judge on the Superior Court panel that decided the case below.

The Sheddens are the owners of 62 acres of land in Tioga County (the "Property"). At the time the Sheddens purchased the Property, they were unaware that their predecessors in interest had reserved a one-half interest of the oil and gas rights to the Property in a recorded deed in 1894 (the "1894 Reservation").1 The Sheddens leased their oil and gas rights to Anadarko in May 2006 for a term of five years (the "Lease"). Prior to making payment, Anadarko discovered the 1894 Reservation, and subsequently revised the order of payment for a bonus payment on 31 acres, half of the 62 gross acres leased. The Sheddens accepted the order of payment. Two years after executing the Lease, the Sheddens quieted title on the reserved one-half interest.

In 2011, Anadarko invoked the extension clause in the Lease by sending the Sheddens a check representing an extension payment of $70 per acre for 62 acres. The Sheddens did not cash the check, and proceeded to file a declaratory judgment action seeking a declaration that the Lease was only for a one-half interest. Anadarko filed a motion for summary judgment, arguing that the doctrine of estoppel by deed precluded the Sheddens from arguing that the Lease granted Anadarko only a one-half interest. The trial court granted Anadarko's motion for summary judgment.

The Superior Court affirmed the trial court's ruling in a unanimous published opinion. It noted that estoppel by deed is a well-established doctrine in Pennsylvania, and that it barred the Sheddens from arguing that the Lease only conveyed a one-half interest in the oil and gas rights to the Property. The court also rejected the Sheddens' argument that because the Sheddens had only received a bonus payment for one-half of the acreage, the Lease was only for a one-half interest of the oil and gas in the Property. The court noted that the language in the Lease specifically provided that the Sheddens were only entitled to the share of rentals and royalties equivalent to the proportion of gas that they actually owned.

In the Supreme Court, the Sheddens did not dispute that the doctrine of estoppel by deed applied to oil and gas conveyances, but instead argued that the Superior Court erred because: 1) the bonus payment for one-half of the acreage was a modification of the consideration and scope of the Lease, and 2) the doctrine of estoppel by deed is not justifiable in this case because Anadarko was not prejudiced by the Sheddens' misrepresentation that they owned 100 percent of the oil and gas rights to the Property.

The Supreme Court first addressed the Sheddens' modification argument, and held that the Lease was not modified by the initial payment for one-half of the acreage. The express language in the Lease provided that the Sheddens were only entitled to payment in proportion to the oil and gas rights they actually owned. Because the bonus payment was in conformity with the express terms of the Lease, the payment could not be considered evidence of an intent to modify the Lease.

Second, the Sheddens argued that because estoppel by deed is an equitable doctrine, there must be a finding of detrimental reliance by Anadarko. Anadarko argued that the Sheddens were attempting to conflate equitable estoppel, which does require detrimental reliance, and estoppel by deed, which does not.

The Court agreed with Anadarko that estoppel by deed does not require detrimental reliance, noting that equitable estoppel is an equitable doctrine that "recognizes that an informal promise implied by one's words, deeds or representations which lead another to rely justifiably thereon to his own injury or detriment, may be enforced in equity." Novelty Knitting Mills, Inc. v. Siskind, 457 A.2d 502 (Pa. 1983). In contrast, the doctrine of estoppel by deed precludes a landowner who leases property which he does not own, but of which he later acquires ownership, from denying the lease based on the argument that the landowner did not own the property at the time the lease was executed. Estoppel by deed, while rooted in equity, has broader considerations, namely ensuring that certain formal documents are final and conclusive evidence of their contents. Accordingly, the Court held that the Sheddens were estopped from arguing that Anadarko only had a one-half interest to the oil and gas on their Property, upholding the Superior Court's decision that the property concept of estoppel by deed applies to oil and gas leases.


1. The Court notes in its opinion that, although the Sheddens claimed they lacked notice of the reservation, they arguably had record notice given that the reservation was properly recorded.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.