Central Natural Resources, Inc. v. Davis Operating Co.

A landowner conveyed "all coal" and the right to mine it to Central Natural Resources, Inc.'s (plaintiff) predecessor. The coalification process that forms coal also produces coalbed methane gas (CBM), some of which stayed trapped in the coal; at the time of the conveyance, everyone understood CBM to be a dangerous, worthless gas. Years later, Davis Operating Co. and other companies (defendants) leased oil-and-gas rights from the landowner and drilled and produced CBM from the same land. Central filed a quiet-title action, arguing that because CBM comes from the coalification process, it should belong to whoever holds the coal rights, and urged the court to adopt a rule that the first coal deed on a tract automatically carries everything in the coal formation with it. The trial court granted summary judgment for the defendants, and Central appealed.

Whether a coal deed that is the first conveyance to sever any mineral interest from the fee simple estate automatically gives the grantee ownership of everything contained within the coal formation, absent the parties' clear intent to convey it.