TW Phillips Gas and Oil Co. v. Jedlicka

*203 OPINION

Justice TODD.

This Court granted allowance of appeal in the instant case to determine the proper test for evaluating whether an oil or gas lease has produced “in paying quantities,” as first discussed by this Court in Young v. Forest Oil Co., 194 Pa. 243, 45 A. 121 (1899). After careful consideration, we hold that, where, as here, production on a well has been marginal or sporadic, such that for some period profits did not exceed operating costs, the phrase “in paying quantities” must be construed with reference to an operator’s good faith judgment. Furthermore, as we find the lower…