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WEST VIRGINIA ENVIRONMENTAIJ QUALITYCHARLESTON, WEST VIRGINIA

DANNY WEBS CONSTRUCTION, lNC.,Appellant,

V.

DIRECTOR. DIVISION OFOIL AND GAS]DEPARTMENT OFENVIRONMENTAL PROTECTION

Appellee.

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iOB AUG 3 1 2017

i____A!.RLS!!A!REISaSna___.--gr-I

lS_Appeal No. _l7-@- EaLB

NOTICE OF APPEARANCE

Notice is hereby given ofthe entry ofthe undersigned as counsel for the Appellant, Danny Webbconstruction, Inc. in the above-entitled action. Pursuant to the requirements ofthe West Virginia Rules ofcivil procedure, all further notice and copies ofpleadings, papers and other material relevant to thisaction should be directed to and served upon:

John F, Leaberry (WV Bar 2168)The Leaberry Law Firm PLLCI 67 Patrick StreetLewisburg' WV 2490 iT: 304.645.2025F: 888.469.663 IemaiI: Ieabenylaw@leabeny-law.com

John F. LeabenyCounsel forAppellant

APPROVED:

08/30/20I 7

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A r|\hmST VIRGINIA ENVIRONMENTAL QUALITY BO

CIIARLESTON, lhEST \mGINIA

DANNY WEBB CONSTRUCTION INC.

APPELLANTIS NAME,

Appellant,V.

DIRECTOR, DIVISION OF

OILAND GAS

DEPARTMENT OFENVIRONMENTAL PROTECTION,

Appellee.

i.i; AuG 31 2017

&'dvT«b-Nffi'±RTr"AuThoifei_____AJ.aL.gu;A._LJREgAm_,,__,.__3..It_..!

Appeal No.

NOTICE OF APPEAL

Action Cormlained Of The appellant(s) named above respectfully represent(s) that it is aggrieved by (identify theorder, failure or refusal, or permit, and give date ofthe order ordelivered to A ellant b electronic mail dated Au ust 1, 2017.

ORDER NO. 2017-UIC-4 dated Juy 26, 2017 and

See Exhibit 1 and Exhibit 2 attached

ReliefReauested: The appellant therefore prays that this matter be reviewed and that the Board grant the following

i:l':ebfe(ydaenscceripbeenglnegrfi:iiaelfds£eu,gmltn):ellant re uests that the action of the Chiefofthe Office of Oil and Gas be sta ed and held

antls appeal to the Supreme Court o

SDeCifiC Obiectious: The specific objections to the action, includingquestions offact and law to be determined by theBoard, are setfo-rillindetail inseparate numberedparagraphs and attached hereto. The objections maybe factual or legal.

Amendment ofthis Notice ofAppeal may be had only by leave ofthe Board, and only for good cause shorn.

Dated this qu day of August

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AUG 31 2e'17

V.n.J i-\ --,.` -.-l' I,- -Envi(c"1 I,J.-.`, -.rl

)2017

(Address)167 Patrick Street Lewisburg \^IV 24901

3O4-645-2O25

(Telephone)

WEST VIRGINIA ENVIRONMENTAL QUALITY BOARD

CHARLESTON, WEST VIRGINIA ,

DANNY WEBB CONSTRUCTION, lNC.,

V.

DIRECTOR, DIVISION OF

OILAND GAS,

DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

Appellant,

Appellee.

Appeal No.

F3,ECE`.,/IDOffice of Oil anc! Gas

AUG 8EL 2Ci7

EnvYl"o/nPnecTl?f[T.fonie?ftion

SPECIFIC OBJECTIONS

Appellant appends the following specific objections to its Notice of Appeal of ORDER

NO. 2017-UIC-4 issued bythe Chiefofthe Division of Oil and Gas, WV Department OfEnvironmental Protection.

1. The Action of the Chief of the Division of Oil and Gas, WV Department Of Environmentalprotection is premature. on July 10, 2O17 Appellant herein submitted a Petition forRehearingto the West Virginia Supreme Court of Appeals. Such Petition is presently

pending before the Court.

2. The Appellant will be irreparably harmed if SuCh Order revok'lng Appellant's Perm'lt ulC

2DO190508 is allowed to take affect and Appellant ultimately preVa'llS in its argument

before the west virginia supreme Court of Appeals.

3. The potential harm to Appellant resultI.ng from the revocation OfAppellant,s permitbefore all judicial remedies have been exhausted is great; while there is little chance ofharm to any partytothis action by delayingthe revocation, since all activity at UIC2DO190508 has been stayed bythe aCtl.On Of the Fayette County WV Circuit Court.

4. WestVirginia Rule 47CSR13 relied upon byChiefofthe Division of Oil and Gas is

discretl.onary. The revocation of the permit iS not required by Such rule.

5..In fact the decision of the Chiefofthe Division of Oil and Gas to revoke UIC 2DO190508is an abuse of the discretion provided by west v'lrginia Rule 47CSR13 since it directly

impacts a property right asserted by Appellant that is currently Pending before and may

yet still be upheld by the west virginia Supreme Court of Appeals.

For the forgoing reasons Appellant, Danny Webb ConstructI'on, lnc respectfully requests

that ORDER NO. 2017-UIC-4 issued bythe Chiefofthe Division of Oil and Gas, WV Department

A r|of Environmental Protection held to be Stayed and held in abeyance Pend.lng final Outcome OfAppellant,s appeal before the West Virginia Supreme Court.

Appe"ant further requests that.ln the event it Prevails.ln its appeal before West Virginia

supreme court, that ORDER NO. 2017-UIC-4.Issued by the Ch.lef of the Divis.Ion of Oil and Gas,

be held to have been issued without cause or reason, thus leaving Permit UIC 2DO190508 in

good standing unaffected by the action of the chiefofthe Division of Oil and Gas.

Respectfully Submitted:

Danny Webb Construction, lnc.

Appellant

BY COUNSEL

iiiE_167 Patrick Street

Lewisburg, WV 24901

Tel: 304.645.2O25

email: leaberrylaw@Ieaberry-law.com

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CERTIFICATE OF SERVICE

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I, John F. Leaberry' Counsel for the Appellant, Danny Webb Construction, lnC., hereby Certify

that a copy of the foregoing Appeal has been Served upon the follow.lng.Individuals On this 30th

day of August 2017 in the following manner:

vlA FIRST CLASS MAIL, POSTAGE PREPAID

Jackie Shultz, Clerk

Environmental Quality Board

601 57th Street, SECharleston, WV 25304

WVDEP - OFFICE OF LEGAL SERVICES

601 57th Street, SECharleston, WV 25304

DIRECTOR, DIVISION OF WATER AND WASTE MANAGEMENT

601 57th Street, SECharleston, WV 253O4

Counsel for Appellant

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Attached Message

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Nottingham Justin E <JusttmE.Nottingham@wv'gOV=Danny W®bb Construction <dannynebbCOnStmCtiOn@aOl.COm>: urban, TBny W <rferry.W.Urban@W.gOV>Maftinl James A <Jamg§.-am©AV.gOV>; Smitflt Seng a <Geng,a.Sfnm@WV.gOV>; Ha"ns, Melanie aa.Mg;aniS.S.iianteinS@Urv.gov>; Lock\AroOd' Andrew i <AndreurI,Lookwood@\^ngov>

u!c2DmgOgO8 "C Permit Revocation (Order# 2017-UfC4)The, i hug ZO17 19:57:10 +0000

nanny:

wel] 47-O19-OO508 is no longer authorized by -PEP COG for the injection Class " fluids. I have attached a Pdf COPYof the u!c permit Revocation (Order# ZO17-ulC-4) for UIC Permit number UIC2DO19O5a8.

please note that you have the right to appeal the terms and conditions of the order to the Environmental QualityBoard. The Notice of Appeal must be Submitted On the form Prescribed by the EQB Board. "5 Process iS inaccordance with the provisions of - tode chapter 22, Arficle ll, Section Z1. The Notice of App£al rnuSt besubmitted within thirty (30l claws after rece'lPt Of the Order.

[fysu have any questions therl PIease feel free to comtact me.

Thanks,Justin

Jusin E Nothaghur3westvirginia Depainlent of Endronmental ProtectionOffice of®it atldGas .Environmental Resources Analyst6O± 57¢h S*reat| a.a.charlesaonI WV 25304_&ir;i:-(-3-d4i--ir2f;in99 IEx¬. i65OI

Fax: (304]-926-8452iustin'E.t¢ottingham@WV.goo

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pursuREtto W, Va, EL App. P, Z5, P¢titioners Dauny Webb and Damny Webb

construction, Ino' respeafflly submit this Pdiition for Rcheedmg in response tO the

Mermrandun Decision ty thas Crmttalelivered on June 9, 2017. Under Rule 25, p©titious for

rdsaring 8i.a apProPriaife Where, inthe Opinion Ofds Petitioner, the Court has overlooked or

rmisappneheeded Qritieal POiutS oflaw and fact. As explaified in this Petifron, the majority

ndsappehaded1the following crfeical peiuts oflaw and fact:

I, The Court,s ifemorandum Decision mischaracteriZeS ire nature Ofthe Oil and

Gas Lease and infers an irfexpretatiOn inCenSisteut with the rfueut Ofthe PgutieS'

H, The Cout,g Menorandun Dectsicm £alls to properly apply West Virginia law

with respectto k:nowledge imputed to cerporatioas.

Ill+ The Court,s Memorandem DeGiSion iS fiat COn8isteut WithPriOr deCiSiOas.

regrding lease ¢onstI.uCtiOnOr Practices in the Oil and gas indutry_

A]li;a(=1EmffiRT_roR RIEEREARING

The thur#g Memoramflurm Dedsiom characterizes the Oil and Gas Lease in a

marmer inconsistentwith the record) inconsistentwith this ¬ourtls prior

hoREgngs} and inesmsistemt With the im-t¢mt OrfE]¢ p#l'ties_

The Court,s analysis ofire Oil and Gag Lease [§ ;nconsisteut withthe record in

this oasSl inconsistout with ire prior holdings ogthis Court imconSistentwiththe Oil and Gas

Lease) and froondstent Wthds understanding OftheParties. Inthe Courfs Memorandum

DeGistOn, ire Couife fimds that i,theprxpOSe Offro a-timg Olause is explicitly for fthe puxposS Of

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F3ECEl`./EDOffice of Oil anc! Gas

AUG31 2Ci7

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proapecting, exploring tip geopfuysi¢al and other mefrodS, drfuiing both VeriOally (sis) and

horiaeatally, mining' tiperating fo1.J prOdwhng and Storing Oil and/or natural gas and/Or coifeed

nefrog querdsfter along withnatwl3ral gas COlieCtivety Oau:a and induding in the ward ffgas"),

or all tliee ,....- quenorndun Deedsion, p. 9.) The Courtcoutfued ty saying that 6(Iw]ha

ire gralng clause references the ¢rigELto inject air, gas, watBF, Salt Water, brine, and Other fluids

from any souae,, it is not inaoxporftfing and exputing the iHjeCtiOn righi COutained in Paragrapfr

14' Rffither, ire granting olause is stdeftylindtedto fro plxpose ofexplorfro ¢Perating for,

prodrchg9 and storingall and gas.i, (Menerandrm Decision, p. 9.) Surprisingly, the 'Cout

ackflowledges that ¢clit] is the grfest and best mode OfeOnStrmCtiOn to give wards, frge from

anbigufty thirplain nd ordhary meaning." sy1. Pt. 3, Ee#ffe# v. I)avG, 166 W Va. 772, 277

s,E2d 617 (1981), qurmorandunDe¢ision,p. 9.) Howeverg the Memorandum Deoisiongoes

on to Saythat"[w]g ¢onsiderire grantingchase withacknowhdgment ofthe oil and gas

exploration and production industry practices using geoptrysical and frorizoutal drilling

techniques, inlufling fraoturingl whichuse inje¢tion ofwhous fluids to explore and, ideally,

prodrct oil and gas.., (Menorarfum Dgofsion, p, g.) Ths resort bythe Court to frotors beyond

the text orthe c)il arld Gas Leas to arive at the iutexpretatiOnOfire Eease edvan#ed in tis

Mermrmdumnecisiom iS inconsistent with ire Prior inOIdimgs ofthis Court and practices in the

industryI

Here, the Court ifeund that the grandng Clause on fro first page ofthe Oil and Gas

Leasg mBanS SOENthing Offer than what it Says, yakthe Court offered no basis for its

iuterprctgrtiomt vlite the oral argument held in this case did givoive some discussion about tfro

contemporay practices used inthe oil and gas irfustry to drill and complete oil and natnd gas

waligJ nO guch tegtixpOny Was Offend before the tower COuft, ed nO eddenCe On which this

F]ECEi`./EDOffice of Oil anc! Gas

AUG31 2Ci7

VIV De-r)aliment' QfEnvircnmenlal I_tot,act.i_iC)n

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cout could rely to reach such an interpretafron was part ofthe reoord before the Cout, Such

rdianeg oft extl.insic evitience was improper. :fthe cout actually believed th© 1#nguage of'the Oil

and Gas IJgasg to be Clear and unanhiguds,I Hovever} ifthe Court found the langrrage Ofthe

granting olause onire fir.st Page Offroail and Gas Lease to be less than aystal Clear, then the

court should have rerfuned from inxposing an iutexp1.etatiOm bas6d on iusuffioientfacts amd

remanded fro case back to the Gil.Cult Cowl ofFayette County for additional rmdingS Offact'

ifeg cJ¢rfy4porfErae#fE ¢# ref. jFood v, FpraZerRTZy#, 213 W. V&, 369, 582 S,E.2d 816 (2003) tear

oriam), The Cout,s reference to industrial practices in the O51 and nat+n.al gas industry as a basis

for fomutndpn ofthg cout.g interpetation ofth® oil and Gas Lease was impropel. under this

court.a preeeden{g, the west vi1.gi#ia Rules ofCivil Prooedrlre, general oil and gas leasing

p1.C)toCO1, and gene1.al practices IIt the Oil. and gas industry.

w, va. R, ¬iv. Pro. 52(a) provides, in part, that (l[i]n all actionsfried uponthe

facts without ajny or with an ndviso1.yjury, fro Court Shall find the facts specially at State

separately its GonOlusions oflaw thereon, andjndgneut Sball be entered pusuantt6 Rule 58., and

in grating or refusing preliminary injunctions the court sndl simrigrly set forth the fmdifigS Of

fact and gondusioEN Oflaw which ¢Gnstitute ire grOlndS OfitS action," In the Court's

MemormdunDecisiolt, the Cort Had to resostto additional facts Outside the record, and Outside

ire order gutered bythe cirowit court ofFayette Corlfty tO upholdthelower cout's order. "S

is incottgisfeutwith ireprior froldingsofthis couct, whichrequhe that a case be remanded for

ftddiiond findings offret ifl oases where additional factual fmdings are neoessary. In Sy1. Pt. I,

l ha ftyl. EL I, Berkeley C:ourty Public Seryice Distr!ci _v` V#ro Fore_. oif_A.i:=_i=: :_Sl y:X=:a£#\>_____. __ _ _.-__43_~ ^J?t^

i h] Syl' Pt. It Bgr#g/ey C;otf#ty r3fDfJC D`GJrylGG JJfarrJC'J y' W"a LLUj^ lJJ /WO9HVt+I.|V~ H I I " -- --_

g.E.2g 189 (1968), tirds Court hand that t.Itlhe question as to Whether E COutract i8 ambiguous lS ft question Of law tObe det-ked ty the EOnd.,. SImilariy, in SyI. Pt. 1, ¬ctI'gr I)¢v¢Zoj,ne¢#f ¬o. v. U###dF#edS Gff Cb'. 147 W. Va.484 128 S.E.2s 626 (1962), ttliS Courf said 'lla] valid written inStruneni whieh expresses the intent offro Parties inplal" RTd unatrfeiguou§ language ig nat Subject to judiClat COnStruCtiOn or interpretation but Will be applied and;T]forged according to S"ch i"teut'W

162

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AUG 3E 2Ci7

\1,ry Denarimerlt ofEnvircmrict,iai ['-rc)tc,ction

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carmw#oJowggr## Tire co, v. ZIW_#r¢fe Tgre Co,, 156 W. Va, S;1, 193 S,E,2d 544 (1972), this

courttiald that ,'[r]ule 5Z® mandatothy requir.eS the trial COut, in all actions tried upon the

facts withoutajuryg to find ire facts specially and state separately its oonelusions ofhaw thereon

boferS ire entry ofjndgment. The faihae to do so oonsffiuteS neglect ofarty on ire pat ofthe

tr.th Sonkt,rend ifit appeus on lapPeal that the rwlg llas not been ¢omPlied Wilde, the Case nquy

ag rgJ###de#OP ¢Oap#¢#ce.., (enPhaSiS added) HSrg, ifthis Coutwas unable to conclude

thatfro findings offact and conclusions oflow made by the CirGult Cout ofFay3tte ¬Ounty

apvided a,Suffident basis on whichto affirm that cothss order, dun ire court should have

I.emendedthis case back to the cktewh court for additionalproceedings to estat]listi a more

Complete frotualre#ord. Brgvf#£ v. A4¢yg 158 W. Va, 53 1, 212 S.Et2s 85 (1975) (''When the

record in an aedon or sut is such that an appelhate oolrfu ¢an matinjustice determine ire

judgmedthatshould be rndly rendered, the case should b¢remandedto thetrial courtfor

furtha. developrneut.., Syl' in. 2, g¢of# SjdeI;;nebgr co. V' gfo#G deffist"O#Ore Ch, 151 W.Va.

439, 152 a.E'2d 721 (1967)).

II. The CourI's Memu"ridum De¢isiom fails tO Properly aPPlyWest

virginia law with Feapeet tO knowledge imputed to COrPOm±iOnS.

under this court.a cstoppeljurispndence, North mug Group should have been

Sstopped from asserting that ire oil and Gas Lane was t¢rminatea, A8 the Cout observed* sines

i)wffbcay jfogrsjngJ4ayffegrty vrrvgJi##rfe, 184 W. Va, 288, 400 S,E.2d 296 (1990) was decided over

twerty years ago} this coutha held th;iwSgtvirginia mows the general ru18 that ale88Or

wgiveShis orher right to ferfeit a leR§e for abeach Ofa covenant Or Condition when.

subgeqneftyhe or she accepts rSutat Pay-utS (¢withknowledge Orfull notiee ofsuchbeach.9

J#, at 2g1, 40O S,E,2d at 2g9, The Menqrarfum DedSion froonectry charaeteriEeS the record in

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b+a./ Dera.riment ofEnvirQnmerI:al I.,,rOtectien

this cage, hawever} wfron it says that ¢¢the record is also abundanfty Clear thatNorth Hius Group

had ne haow]edge that anything ofrorifian salt water or brfue was bBing rtyeCted hid ire 508/1A

well util ieaming information at a Fayette County Cormlig§iOn meeting inNoverfeer, 2O14,

which prenpted aninquiry into the ngfur8 OfWebb ¬onStREtionOP¢ratiOnS On the pemiseS.'t

(Memorandum Decisiofi at p, 1 1,)

The only witmess calledto testify on behalfofNorthHms GTOuP Was Patrieia

Harilten, Mg' ffirmthton festifrod ireifefifetbecame aware Of'Webb Consti.uedon's operations

ou the lSasefi preniges at thSNovSmber ZOI4, FayStt® Courty Commission meeting. (I.A. at

271-75.) Howeverl it iS a signifiCat dapautue from this Court,a prior holdings tO now OOnehade

that beGREgg nds, RTalrdlton was previoudy unaware OfWet)b Construction9a ongoing operations

on ffig leasedpremises, then the coapo[ate entity ofNorfu f#1is ffioupI In¢' was also u"wiare.

such a oonelusio# is not Duly usupporfedt)y de re£Ord in this ¢aSS, but also at tiddS with this

cotist*s prlerholdings with.respeGt te krmwhdge imputed to a OapOratiOn. unat Patrieia

HREiiton haow and When gke hew it iS inelevant ifi any analysis Ofthe apPli¢ife#ity ofestOPPel

to the aENfty ofNorfu Hfl[s Group to terminate the Oil and Gis Lease.

Fur pxpQSeg ¢gduterrfuing ire apPliSabilfty QfestOPPed to this OaSS, What

matters, and all that-tterg) is what the officers anddirectors ofNorth Hills Group, hac. haew

whenthe oil ed G#s Legrge wag enteredinto and thaughautthe term Ofds Oil and GasLease.

The eecord iS clearthat Ms. ELanitton did not negotiate the Oil end Gas L8ase. TheNorthHills

Group offiSers and dhecterS who did negO#at3ike Oil and Gas Leftse were nat called as

witnesses, Howevera the rapreseutative§ OfNorthffius Groapj lnc, who negotiated the C)il and

Gas Lease kflew that ire Purposes Ofthe lease induded injection ofWater from Other SoueeS

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vrv Deftartrneut ofEnvircrlmen,:al r.,rctect'lOn

besides vellg drilled on the leased penises and accepted I.eutal Payments whilS these injections

oocured'

±ncenmercitil Banking &Trust Co, v. Doddridge C:ourty Band, ±±9 W.V&. 449,

1g4 S.a. 61.g (1g37)i this coulf reoogulzed that ¢<[t]he law Will also imPrfe to a OOapOratian

knowhdge offiats which its directors ougfro to fuow, in the exercise ofordinary dffigenee in the

discharge ofthedr official duties, when the imprfution ofSuch inOwledg¢ to the COTPOratiOn iS

neoessayto prctect the rights ofthird persons, The dirgGtors are presumed to know that which it

is ifeir artyto keow and whichthey havethe means ofknowing." 3 ZlfooJ#PryOre Ojl carPOrer#Ous,

354, § 1783. fit CbmxperaJofBfl;#feJng & rrgr# Cb" "g C¢urfewent on to Say that {'[t]he manner

in,whch a ooaporalonlg bugfrosS is oendrcted may be guch as tO inprte ta the board ofdi,eOtorS

ed ire coxporatonknowledge ofbesinegs trmgaed'ous entered into by a representative ofthe

coaporndon." Jd (citing Bggr# Th ri4org##towre #grdK!#g"/oo#Rerg,frond Co,, 1I8 -a, Z89, 190

s,E. 333 (l937),) The prindple is nut unique tO West Virginia. indeed) the tJndted States

supeme court has noted that corporate officers and directors haave EL duty tO renftin informed

ifeout ire ooxporatiens they gQVerfl and may not SinPly hide ifeir hePdS in the Sand in Order tO

preelnde Sstopped. Inar#pr## v. prega, the United States SuprBmg Court noted that ''[knewledge]

whifethey oughi} by pxp®r diligence, to have keo\m as tO the general Course OfbuSkeSS in the

[gQxpOrgfron]' they may be peSuned tO riave known in any Contest bctWegn the COxpOratiOfl and

frose wh aejustified by the ctroumstanoes in dealing with its office1.a upon thebasis Ofthat

cause ofSuginess." 1 10 uS' 7 (18g4) (overmled on otha grounds,J4ffe#rr¢# v' F"C, 519 U.S.

213 (1gg7)), NorthREls Group, inc, accepted in excess OfEighiy Thousand Dollars

($80,000,00) from Wchb Construedon dring the term Ofthe Oil and Gas IJeaSe. The

coxpondon,s offioers and directors knew that none ofthe money they received was derived from

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royalty paymerfes from aprodrcing oil ornrfural gas uell. North Hius Groxp] inG. twiG8

received copies ofwets donstruetion,+s injection permits, once in SeptemberZOOS, (JA' at 797-

9g,) antl ngrfu in DScunber 2O14, and ire re¢ord EOrfung nO evidence Ofany Objectionty North

RIi[1s Group, On the very fret Page ofwifro Construetiou's permits, ire Permit States that Webb

Cousthctien is

"anthndzBd ty this PSrmltfo inject Class II ffids that arG brought

to tiro gurfrog in gormedrion with ocaveHtiOnal Oil Or natural gasproduction and may be Com:mingledwithwaste waters from grSplants whch are anintegral pat of.produotion operations, ulessth¢se waters are classifrod as afaasardeus w#ste at tha time ofinj¢SSion. ,. ," -(JA at800.)

The officers and dhectors ofNGrth Hms GroupJ Inc. riave Changed Sines the Oil

and Gas Lease was exSouted, and While Ms. EIanilton_may nothave.known that froidS frau

other welig won.e rieing injected, de OOrPOratiOn} Noth Hills Groups ino. did know long before

Ms, HamihabScanle ch Officer, (I,A. at7g7-9g.) More-over, the officers and direCto#S OfNorth

ELlls Groups mg. ¢ouid itave at anytimg made thctr Our independent inquiries into thenature Of

wedb construckori,s operations on theleasedprenises. They did not'

HI. The Court'g Memorantlum D.ecisiou is not consiS¬®nt With Prior deCiS±OmS

regardfng lease comstruetiom or paractices in the oEl amd gas industry.

The Court,s Memorandum Decision rkotes that #[!]h!S ease iS reSulVed uased upon

the p]aiH fuguage Sfthe Lease, and ireevideuegthat Substan¢eS Other than Salt Water O# arine

was injeded imo the 50g/IA vellt which wag notproventO be tREProduCtiVe," (Memoranrfum

DeciSiou, p, 11.) First, the gtatengut that Well 5Og/1A hadnot provento be unprdrCtive iS

totally ineonsisteut wThfro reGOrdS inctnding the MSmorandrm Decision.

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VIV I)erartment ofEnvircnr.I !L.r!lall F,rofection

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ds the Memorandum Decision indiCatsSSNorth Hills Group sold Webb Coast-tion a

tract ofland on which a plugged, butunproducfro uell was located, (J.A, at231.) In ¬ontrast to

the wall on the heeded propedyp the well on the leased praptry was so unproductive that it had

been phagged with oermeut red abandoned, (I.A. at 182.) The Cout's statement that

t4[m]oreoverj thefluids were injeoted imtO aWell that Was notproven tO be unPrOdrqtive9 is

ineondstint withds facts. well 508 wag, as notedinthe REmorandunDecision, drilled and

complefelybypeedke petroleum Company in 1982, prorfuced for several years, became non-

productheS and wagplugged as a nan-produetive wsllby the year I986 tJ.A,a #t 83.)S which is 25

years priortods timethe lease in issue here wias executed, The well irnd beenproven so

unproduetive it was plugged and the prior lSas¢ guneedgFed, The paties knew the totally

unprodrctivephaggedusu was onthe lease premises, and that isWtry Paragraph 14 ofife Lease

provides thatire lessee is grarifed ire righi to inject in any whl ¬',,.drilled or loBa¢ed upr ire

leaseprendses whichmayprve unproduotive ofofl and or gas,.,," [expkasis added]. will

50g was i¢¢grtgd on the ieaSSd PremiSSS, PrOduOed, but beCane SO unprOduCtive that it had been

plugged by pumping ceneut inthe well (J'A, at g3.). When Webb Construction drilled out the

cement plugs, its irfeutionwas fo oouverf well 508 into an injectionwall aS COntexplated by ire

Lease, butthere was a Sligtit chance the Wall ndgrthavebeenproductive because Webb

cousrfuction had inje¢ted into the deeded well. webb comstruGtion did give Well 508 the chance

to be productive; it did not produeSJ and Was rgCOmPlgted as an injection Well. There is flo

then evidence inire record onthatpoint. TheMe-randum Decision refersto the fostimOny Of

webb construction,s representative on that poirlt, tut ignores it.

The ifemo¥andem Dgcigiom relies on fro Operation ¢fthe haabendrm Clause in the

granting language ofthe opedng pa£agrapfaS ofthe Oil nd Gag Leaseto conclude the lease

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tifermiREted en its own accord at the COnCluSionOfthe Secondary term. No party needed to take

any aofien withreapgSgto termination." quemOrandun De¢i;ion, P. 10.) ELowever, ire,Couct

also plalrdy states that +t[w]e acceptthe Contention ofthe webb Pethioners that the IJeaSe iS not a

standard lease, de;Fife#g title,but, rther, itis a ldual prPOgelease."I (Memorand- Decision,

p. g.) Asthe Coutagreed, the Lease was neverneatte operas aS a run.Of.the.millprodetion

lease, Pck, rd itwas eror to OOndudethat fro Lease ¢otild be termimated like such a lease. The

court,a Memorandum Deci§iou implies an obifegaton onire,lesSSe Ofthe lease to prodrce oil

and gasS who it is edear that the Lease i§ huld by the injeCtirm al storage Ofgas Or brine, which

ooGured'

rfuS hat)endrm deusg ofparagraph 14 ofthe Lease provides that Wedb

gon§fro¢tiomcouid malutainife Lease ¬¬..,inire event such Saltbriife injeedOn.., OontinueS

Seyond the primary er secondary term ogthis leasel then the ieaSe Shall COnd-e in full force and

effect so long a§ [Wchb gonstruetion] rfeali OOrfuue Paying lessor a-ally thereafer the sum Of

Three Tfrousand Six ELndied Tuerty-Thus ($3;624,OO) for such privilege so long as such

aedvftycorfurmeS,,.) (JA. at 52.) There is no dispute that Wgbb Constructionhas made an

payments gnguhed nder the Lgasg, nd there iS rm dispute ffiat Webb Construction has injected

salt water rmd I)rfue into fro leasedpremises. salt brine imjeofron has eonthued, and with the salt

brine, inje¢tion of¢¢,..otheff fluids.,." from oil and gas produtiou has also COntinued aS

aufroriaed inTighig g-tingParagraph ofthe lease. h edditlonto Paragraph 14, Paragraph2 of

the lease provides that de lease cond"es '¬[so long as o# or gasE is prodea... OF aS long aS

gas or brinS is stored therein.,, Brine is bchg stand inthe leasepenises. and aS authorized

by ire grant ofire ridr]tto inject other fluids, offer ENds are being injected as Well. -e oife

fluids ado condn hiEle. The next question ig what compensation the lessor,skould receive

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w,/ TILjerarment OiEnviror(i:lt;ntal i.I.,r6teCtion

beoause the lease ¢outinued? That questionis answered byPar.agrapha 14, whch provides the

amount Qfrent, Which Was Paid'

Fen pngos®g of.maintainingthe Oil and Gas Lease under Paragraph i4, Webb

constructionhad to nestonly tw rgquirenents: (1) paymed oFife required armualfee Of

$3,6Z¢,00, al (a) condnuous imjeedOn OrSalt rmter or brine. It is undisputed Webb

cofistructiorlmssboth rgqukenents, wgbb cousfrotion's injection ofotherfluids was net a

brewh orthe Lease because other fluids where SPeGiffiCally authorized, Brine and odor fluids

withinflowbackfrom oil and grs fi.arfuring operations, kave been injected sin¢¢ Wall 508 was

®onverted to an injection well in 2008 as asifeorizedby the Lease. The Lease lunainS effeetha

uter paragraptl a and pRTELgraph l4 So long a§ the #entat paymeutg a1.e -d¢, which ndndttedly

they have Seen, Thg Couat alleges that Wrfeb Coastrmctionveuld 6¢comflate" the IJeaSeg but this

Courthas ignored the grmtingwards OfParagraph 2, nd the plain language ofife Oil and Gas

Lease. The Courtwould reed Paragrapin 14 as ifthe lease oontalned m other language, when the

copy ofthe leftso intha JointAppendix is 13 pages long.

Termhatien ofthe Lease wcks a forfeiture, and iS ahiashremedy' IELSr, £!fke '#

uulted Mwhodist C:hachv_ Cue Develapmehi Co,S%22W. Va. L85, 663 S.B`2.a de9 (ZflOE)'

this court explored the applicabilfty ofapuitable and legal remedies in the COnteXt Ofdisputes

a1.iging Out OfOfl and-gas lea§e #greements. ThefS, this Couitnoted that an alleged failure ty a

lessee fohonor a oovenant in an o# and gag lease agregmeatis ordinarily redressed in en aedOn

for thagrs, nottaninatiom og re§ctgsiQn Ofthg undeftying iease agreement, See I)odir!edg¢

cp#ngfty a)# ### Gun Co, v, £ne#fe, 154 F, 970 qu.D'-a. 1907) (recognizing that a lessee,a

faiha to honor chligattong to iesSor.eiS ordunrily tredr8SSed] by action at law for damages, and

ndi by way offerfeiture ofthe teg§ee¢s [Qtharigtit§ uter the leaseL''); ¢c¢ord Syl. Pt. 3, Coye v,

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officrJ) Or' O'Il anC! Gas

AUG 31 28i,7

wi/ Depa.rtmrJrl.I OfEnvirGmlSr..lai r'J.rCltC;ctiOn

jvgw yorgpgfrodeam cb., 52 W. Va. 276I 43 S,E12g (lgO3) (({, , , the remedy for a breach ofan

implied covenar±is ordinarily net byvey`offorfeithre ofthe lease imwhole o# in part, but by ap

actionfurdannges caused by suchbreaoh."), Ifire Northffitls GroupS fro,, waned

cenrfuifento driii aflowwdi1, day chouid haire' in GOmPliance with Sf, I,tide '£ V77#ed

ri#erfeofrtrf c#grro#, mede a demnd to driu, thus giving ifee lessee the oppormnity tO drill or

sulfenderde ail and gag drilliflg and Operating pan.tS Ofifee le#Seg instSad OfSeeking terminatton

ou forfeiture'

NQrth EIiug Groupp inG, CarmutS nd hag ndi, denied that Wsth Construction has

fbThfufty mede allpaymsutg requiredunderth Lease to keep the frgreement in full force and

REect, hikewlsg, Nurthal]ilts a-p} InG, Carol deny thatWgth Consfroction has cOutrfuOuSly

utilized the leased preniseg for injection ofSalt Water ndbrine. These are tho outy two factors

nece§ggrry for wchb const"ction to maiutain fro IJcaSe Agreemat under the habendun ClauS¢

ofparagraph 14'

Menorandrm Deoision states that the Purpose ofthe granting diauSe Ofthe lease is

{f. I.explicitry fur lthe puap¢sg ofprospegifeg, exploring dy geopftygioal and other matriods,

drdifegbchverically (sic) andhorizoutalty, mining, OPerating for, producing and Storing Oil

andfof "tural gas and/or ¢¢albgd methane (herei"fter along With"tural gas COue¢tiVely cdi1¢d

ndinctrfed inthe -a.¢gag..)J Or all three,... CgTtalnly, those Purposes Were granted, btit those

were nut the Sfily prposgs granted. rig grantingciRESe Oftri8 lcaS8 Cnd"8S, ,¬.,.nd the

further excinsi;a r:gEN to fiutect airS gftS, Water, Salt Water, bl.!me and Offier fluids from any

sotlrcg into the srfesurELce strata and ay and atl other rights and Privileges necessary, ineidSni

to, or conveni8ut futhe S¢QnendCal Operation Ofgaid land, edona orjOindy With neighboring

lREtd[ forthe ProdeutiOn, Saving, stol+ing nd taking Can OfOil and gas and the iute¢tiOn Of airl

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AUG 31 2C1'7

\w Depa!iment ofEr'vircrlm¬rhal i')rof6CtiOn

gas] water} brine and other fluids into the substlrface Strata...", The Lease gl.ated the

right to inject Other #uidS ape®iffiCally two times, and it also granted srfu otheI.righiS aS vere

neoesgary for that purpose. Th Mono-dun Decision states: ¬¬.-,.the granting OlauSe iS Sthctly

linitedto ire prrpese ofexploring, OPeratiOn forS prOdueing, and Storing Oil and gas". That

statement is chgolutgly} totally, Clearly w1-g, Surelyjustice requires at least COnSiaeration Of

thelagresueatofife'paties'

Thg C¢urt ssens to believe that the Lease language regardin# 'tOife1` fluids"

contemplated fracturing ¢perafrons in cormection withprotection. Nothing could be firfeer

fren thepredcgg ofanirfustry that is crfeioally impor-tto our state, Very few oil and grs

lefls®g coutain REV injeetiOn ]angungS whatSQSVer.- Fracturing is absolutely necessary to produs8

eel and gris fromthe valuable Marcelhas andunca ghalesS andhas been used in almost every well

drilisd in westvlgini& s;mQe the lg5Ss, WatSr, other fluids, and Sand are injected, a practise

even pre§ideut obana.s Eavironmeutal Prctectiofl Ageney re¢endy found Sife.2

Ag fracfurfug ig necessary tO Oil and gas peduC[[¢n, the right to fracture iS

ixpligd in every lease, ha West Virgifiiaj it is well,established that won an estate iS granted' thl

the neanS to de{atn the esta;e and ire frets ofit are also granted. sg#!rea v. £o#erty, 95 W.Va.

307, 121 SIE. 90 (1924); Porfgr v+ tledflc& A4/a+ Col, 65 W.Va. 636, 64 S'E' 853 (l909)S SFacfro#,

#apr¢, tl#ife# v. ctoz#.## #¢J#gny Co., 46 -a, 625, 33 S,E 765 Gg99). Ths right extends to

all add reasonably necessary for the minerals exPloratiom, prodetiOn, removal and marketing.

Bttffilo REwhng Co, xp, Martini 165 ngV. xpifu lO. ZS] gEi.2a, " (W. VEL. 198Orty. Adkins v. Untied

2 see.E:E>A: a Stmdy offtydroulie` ft1:qrt_rri_n_a_for Pit

w7crfer JZes¢#r¢#, Ff+mgIJrf£ueus#e#g _20f6, released i2/12#Ol 6]2017)'

12

end cias and ltd poieutial Impact orl Drinding(last acoessed "y 10l

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AIJG 31 284,7

vA/ Der\artm.-+I,,I. ofEnviromTlj"tal I.,rctectiOrl

Fergf G#g gg., 134 W'Va. 719, gl g'El.2d 633, (195O), 54 AmJur.2d A4froe£ ##¢ ul4;#er#J£ §2iO,

sg a.I.a. REneS end rmneralg §\S9, PL. T}otREky' Coal Mining RigivS ed Privileges in West

prlngjrefo, 52 W,Va. hRev. 32 (1g4g). Therg was ne need for the Lease to separately state the

righi to inject as part of ire oil and gas production Purposes Of the Lease. ire injection and

storage righiS were saparatchy stated in the granting ckRESe because this iS a multiple prxpose

Lease. The right to injSct fresh and Salt Water. iS even implied in every produotiOEL lease,3 As the

i.ighi ig implied in ¢ormctiom wh oil and gas prorfuction, the Only reason to SPeCiflcally gran

the right is beaRESe the injection rigiv Was SePaete, and Substances Offer than ifeSh Or Salt Water

would be injected.

FFachwing O¢¢urg eventhough Oil and gas leases do net Contain injection rights beOauSe it

is ngceSsay fen prodrction) and beneritg the rmnyfrougands ofrayalty owners, producer

employseg} ed and gas gSFViCe companies, layers nd their enxpiOyeeS, title abStractOrS, COut

hougB uekerS, SngineerS, rig hndS, offlCg enPloyBes, inVBgtol.a, bankers, hotel OPeratorS, truck

Sales peQPle± Squlpeent manufacturers and xpairmen, adetiiSas, and Others involved in the Oil

g S## a# de. v' pr%de"} 4$3 S'W'Zd 808, 81i (Ten, l97i) (('The ixplled grant ofre&sondl8 use

extondg to and inCfudeg the rigife tO inject froth Water from the leased promises in Such anOut as may b8 reasontotyneoesgap to cSny out the less8elS apentioug under the le8§e."): ifeffer V. I)e#baery Re#" Jtto.+ I 12 F. Sure. 3d 9061913 (D,N,D. 2015) (I"ing tug subsurfro¢ for disposal Of Salt Water WOuld bS an inPlied right under the 1eft§egiven it ig a necessfflry ¬¢nsequencG Of Oil nd grS PrOdrchon and the nBed to di8POSi Of it.")i Co/b'lr# v, Packer &pert,'try Dgy. cop 17 Kan. App, 2d 638, 646 (l992) (Jha oil rmd gas leaSC includes an lmPIiGd COVenatfo diapO3B Ofthe salt water pedraed durfuB apeetionS by utiliZife8 a SndtWater dl8POSal Weu drilled on fro tossed PremiS88without edditioRE1 S®xpgnsattoH to the keSOr and Such a righat !S requked in order for the Prochction of Oil and gasto be acoony!ichedr); £gg¬r " pGfrofeacm Engdreerfr Jirc.. 499 So. 2d 953., 956 (L&. C!. Ape, 1986) (DiSpas@l ofSaltwater rfualned dring produtEou ®f oil was imal!edfy granted under mm®ral lease where Salt Water diapoufti Was:'_-_=.i_'-_??.--f'-i'i--'=i\'=? ii.i' : __ :.::-'-i_i-:'- =i:i='.i.i -:-i,-+i ---.-i.i.i:, -\¬.--i.-i_--:-ii?iii_i--.i:_ =-i:. _-- _-_--__i:: -.-__:i --_----:_..-._,.: - -==..=i-\i_-.,T-i_if_-ii__-_:i= i_._?:-.,:-i

srfesarfac8.* gtePbg"g Th Ffrty Res., J#¢., 20% WL 768877l at *1 grew. App. Mar. 27. 2006) (A less8B hfl8 anixplied rigiv to digPO§e OfREIt w@er grnduced in OOnj"ctton With Perfuming its COfltrftCtual chlfgedens and tnaydo go try frojecting it into an oil and gas Welt on The ieased premises.); Braw# v. lee"de". 162 "*. 84. 344 S.W,2d863, 869 (Hex,1961) (A le§8ee has the rigiv to usSe SO much Ofthe land aS iS refl8rmifely neCes8ny in the ProdutiOflop oil, nd §incg the prodndou of6il ne¢eggndfy involves its Saparatiou from the Salh Water, the 1®93ce itas the fightunder the implledte- ofthe lease tOuse the land forthatPurpose.)

13

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and gas indstry Fraofurfug brings high-Value Wells which are taxed a8 Property, and a

officepT:,foF!YaFIDd GasI:

Aura o® 1 2O¢,7

v,n.../ Per.armgnt ofEnvirCnrtlCr,..al LrdiGCliOn :

`

ie^'&

I subs"ial por¬ion oftkat prapgrty fax 1.evenug goes to O"t SrfuQls, F1.acfuring things mimOflS Of

diallas ofseve-oe taxrevenue - for. example, $186,800?214 in 2014, $156,8dO,000 in 2015,

and $72,SOS,goo in 2016 _ and more inthe frore. Afterfractwhga the fin¢ fluid, whch £Outalus

twine but is mostry watSr, mug¢havS some piace to go. west virginfa's solution to the question

ofwhae fo put fran fluid is to injectit deep into the g-nd, way belowthe surface Water,-and

way below §ubgrfecg aquifers whCqCOntainfresh Watel., back into the deeper brine Producing

subENFFasg formations thatforfflerlypedrGed all and gas and already COmtain brfue and

frachndngffutd] using injeation whls like ire one inissue has.

IELjection i§ Sq imPchant to fro O# and gas irfutry andde Stets ofWest Vinghiathat

senatdigM3lifehin and Capito haveiaingd tOggtHer to Spousorfederat 1¢glslationto a-te an

injection nd storap hrfe fu oil and gas liquids in West VirginiEL REd RTrounding States.4

Injgctien rigfafg n"Stbe-upheld for the oil and gas industry to brfug West Virginia the enunouS

benefits it offers, webb constr.uetioH firs nO deuPt that the etnerfe generation OfO`rmers Of

North ffiug G"pa fro. does net life ffactrdng, nd does mct Wan Oil and gas produeti¢n. But

that ig not grrmds to ganc81 an injeedon lease the Prior OWner§ OfNorth Hills Grong, Inc.

anfrorized nd proHted from, Ignoring rights diearly grantedi®OPardiZeS ire indrStry White

digife proviso employment and revenue to keepwegt virginiafihicedly star)le.

GflNffiUSION

The Cou#s Menorandun Decision alffirming the Order by the Circuit Court of

ftyctfe county dgofaring ire oil ed Gas Lease bgiv®en Wchb Congtrmcfron andNorthHills

4 seesSKrrfeB" +onSSttAppala¢hian EEhaneStorage Hub StudyAct;7

14

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introduced May 9+ 2017.

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AuG 31 28I'7

wv D¬--.c]rtment ofEnviium=1.+;,-a! [tQtQCtiOn

Groupa ho+ to be terminated iS a Signifroant dePrfu:e frommanyPriorPrecedents OfthiS Co+ut'

SasSd onirefrets redted andth; law appliedinthe ManqredunDecision, itis apparentthat

the Court laded ft sut#cierfu frothat record on which to base a complete decision in ffiS matter.

rmreover, this factual defroienay apparedly caused the Court to migtak6ndyb8li8V6 that the

<cirndcourtwag peper when itenter.ed apermanent injunction against Wsbb Construetion.

Additional factual derdOPmerfein this Case WOrddPrOVS thatthe Oil and Gas Leas8 ftgreenent

never terminated by its a- 1erus, and that any injuntinn ®nte1.®d in this Case Should have been.

at most] atenpornyinjunedon to permftproperdis¢overy and factual developrffitunder the

west virginia Rules ofCivil Procedure.

WRE Cthstruction resPeCtfifty asks that this Court either (1) grant a rehearing Of

ffig mgifer, or (2) enter an Order remanding ttriS Caseback to the Circui,i Cout ofFayedt8 County

for moss complete frofual aevelapmed throughthe Process OfCivil litigation.

REspeedirfty subeifed+his loth d#y ¢fREyg 2O17'

DANNY WEBS CCENSTHUCTIOEN, ENC,, andDANNY REBB

EOWLES RICELip600 QuarierStreetpost office Box 1386cfaarleston3 WestVirginia 25325(3q4) 347-ll 18Facsinike: (334) 343-2g67gREifeREfl_

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