T.W. Phillips Gas and Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. Sup. Ct. 2012)

(lessor brought declaratory judgment to declare oil and gas lease terminated because prior lessee failed to maintain production “in paying quantities” when loss of $40 occurred one year in 1950s; suit filed after new lessee made plans to drill additional wells on property; appellate court relying on Young v. Forest Oil Co., 45 A. 121 (Pa. 1899), held that when production on 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 operator's good faith judgment; lower court judgment affirmed on consideration of operator's good faith judgment and conclusion oil and gas lease at issue produced in paying quantities; dissent disagreed with court’s interpretation of Young and called for two-part test for determining paying quantities: profits must exceed operating expenses and if profits exceed operating expenses, then lessee's good faith judgment is considered).