Kilmer v. Elexco Land Services, Inc.

OPINION

Justice BAER.

The case at bar concerns the proper construction of the term “royalty” as it is used in the Guaranteed Minimum Royalty Act (“GMRA”), 58 P.S. § 33, which governs, inter alia, leases between Pennsylvania landowners and gas companies seeking to drill natural gas wells into Pennsylvania’s Marcellus Shale deposits. As developed below, the GMRA requires that leases guarantee the landowner-lessor “at least one-eighth royalty of all oil, natural gas or gas of other designations removed or recovered from the subject real property.” 58 P.S. § 33. 1 Although the critical term…