## Facts

- In 1968, the Morgans executed an oil and gas lease on their Campbell County ranch; production occurred and the lease continued by production.
- In 1974, the Morgans conveyed by warranty deed the surface estate and “all coal and minerals co-mingled with coal that may be mined or extracted in association therewith or in conjunction with coal mining operations.”
- The 1974 deeds expressly reserved “all oil, gas and other minerals except as set forth above” to the grantors.
- Coalbed methane (CBM) later became commercially viable; it is methane gas located within coal seams.
- A CBM operator (Hi-Pro) obtained leasehold rights (from the surface to 1,000 feet) and produced CBM.
- CBM royalties were paid to RAG, the coal owner, rather than to the successors to the Morgans’ reserved oil and gas interest (the Morgan Mineral Heirs).
- The Morgan Mineral Heirs sued for a declaration of ownership and recovery of royalties; the district court granted summary judgment to RAG and Hi-Pro, ruling the deeds conveyed CBM with the coal estate.

## Issues

1. Whether 1974 warranty deeds granting “coal and minerals co-mingled with coal” but reserving “all oil, gas and other minerals” conveyed ownership of coalbed methane to the coal grantee.
2. Whether summary judgment for the coal owner and CBM operator was proper as a matter of deed construction.

## Decision

- The Wyoming Supreme Court reversed the summary judgment for RAG and Hi-Pro.
- The court held CBM was not conveyed with the deed’s grant of coal and “minerals co-mingled with coal.”
- The court concluded CBM remained with the reserved “oil, gas and other minerals,” belonging to the Morgan Mineral Heirs.
- The case was remanded for further proceedings consistent with the ownership determination.

## Legal Principles

- Deed interpretation focuses on the parties’ intent as expressed by the deed’s language read as a whole.
- A grant limited to coal and minerals “co-mingled with coal” and extracted in connection with coal mining is construed to cover minerals incidentally removed through coal mining, not a separately produced gas resource obtained through oil-and-gas-type operations.
- Coalbed methane is treated as “gas” for purposes of mineral conveyances and reservations; absent clear language placing CBM in the coal estate, it follows the oil and gas estate.
- Summary judgment is reviewed de novo; where material facts are not disputed, mineral ownership may be resolved as a question of law through deed construction.

## Conclusion

The court determined that the 1974 deeds’ broad reservation of “oil, gas and other minerals” controlled CBM ownership, and that the coal conveyance—limited to coal and minerals co-mingled with coal in coal mining—did not transfer coalbed methane to the coal grantee.


Newman v. RAG Wyo. Land Co., 53 P.3d 540 (Wyo. 2002)