In January of last year, the Court of Appeals for the First District of Texas issued an opinion that centered on surface use by an oil and gas operator. The Court of Appeals affirmed the lower court’s judgment, which found in favor of the surface owners, Will and Loree Hegar. The operator, Key Operating & […]
Subsurface Trespass Considered
In a previous issue, we discussed the question of subsurface trespass, which was before the Texas Supreme Court in the case styled FPL Farming Ltd. v. Environmental Processing Systems, L.C. In that case, the Ninth Circuit Court of Appeals in Beaumont held that the operator, Environmental Processing Systems, L.C., (“EPS”) was immune from subsurface trespass […]
The Horizontal Severance Question
As many know, Pioneer Natural Resources USA, Inc., (“Pioneer”), recently requested that the Texas Railroad Commission amend the field rules for the Spraberry (Trend Area) Field in Districts 7C and 8 to allow for duplicate assignment of acreage when mineral rights were horizontally severed. Statewide Rule 40(d) prohibits the duplicate assignment of acreage. The Spraberry […]
From the General Counsel: A Matter of Balance
The Eleventh Court of Appeals, located in Eastland, Texas, recently dealt with an issue I tend to avoid, if I can, in these articles: the seemingly never-ending dispute between the respective rights of surface owners and oil and gas operators. In this unique case, the operator, Southwest Royalties, Inc. (SRI), sued the surface owner, Mr. […]
Allocation Revisited
A few months ago I wrote on the Texas Railroad Commission’s issuance of permits for “Allocation Wells.” Specifically, I noted that EOG Resources, Inc., in 2012, applied for a permit to drill an Allocation Well that crossed leases in which it did not have the right to pool. The mineral owners protested the issuance of […]
Getting Technical
The devil is in the details, where some deals are concerned. Recently, a Petition for Review was filed in the Texas Supreme Court centering on an assignment terminating due to non-payment of overriding royalty interests. Specifically, the Court of Appeals for the Sixth Appellate District of Texas, Texarkana, looked at the issue of “strict compliance” […]
From the General Counsel: The “Wash-Out” Debate
Lessees who pay overriding royalty interests are obliged to continue honoring those ORIs with every lease renewal or extension, without exception. Or are they? That’s now a question for the state’s Supreme Court. Do pesky overrides give you issues? The Supreme Court may soon provide a solution to that particular problem. The high Court has […]
“Accommodation” Revisited
An important doctrine comes in for clarification at the hands of the Texas Supreme Court On June 21, 2013, the Texas Supreme Court issued its opinion on a case I have written about before, Merriman v. XTO Energy, Inc. The case, centering on the accommodation doctrine, involved a cattle rancher complaining that the location of […]
When Production gets “Allocated”
The advent of the “Allocation Well” comes with a fresh legal challenge, where horizontal well royalties are concerned. A new Railroad Commission phenomena has developed recently, despite obvious rulings to the contrary. The name? Allocation Wells. Operators that are diving into horizontal drilling may already know all they need to know, but for the rest, […]
From the General Counsel: The Point of Valuation
In New Mexico, a challenge to a lower court’s decision has caused the state’s Supreme Court to take a longer look at what it means to pay a lessor an established portion of the “net proceeds” from the sale of gas. More than a few months ago I wrote about the Commissioner of Public Lands […]