The Pennsylvania Superior Court found that the provisions in a lease were ambiguous in this oil and gas lease/breach of contract case. The Dresslers entered into an Oil and Gas Lease with the defendant. The Lease permitted the defendant to engage in oil and gas exploration and production operations on the Dresslers’ property in return for an annual payment and monthly royalties for oil and gas extracted. The Dresslers filed a complaint alleging breach of contract and unjust enrichment and seeking a declaratory judgment. The parties filed cross-motions for summary judgment, and the trial court granted the defendant’s motion. The Dresslers appealed, and the Superior Court reversed. The Court held that it appreciated the complexity of the issues presented but disagreed with the trial court’s finding that the royalty provision terms are plain and unambiguous concerning whether the defendant may deduct post-production costs from royalties.
