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 […]
From the General Counsel: “Just Compensation” Could be “For the Taking”
House Bill 1496, if passed, could bring a new twist to the old workings of eminent domain. Most operators have probably come across that one local municipality that is such a pain to deal with, due to regulations and restrictions imposed upon drilling activities, that the better option seems to be avoidance of such an […]
On Being Accommodating
The accommodation doctrine could draw a further opinion from the Texas Supreme Court The Texas Supreme Court heard argument recently on an important case for both landowners and operators: Merriman v. XTO Energy. Although I wrote about this case several months ago, a revisit is prudent. To refresh memories, the Texas Supreme Court was asked […]
From the General Counsel: The Overriding Royalty Interest
Overriding royalty interests (“ORRIs”) and the way they are treated by both Lessees and case law have been a cause for some contention in Texas. As many are aware, ORRIs terminate when the lease terminates. This allows a calculating Lessee to choose to let a lease terminate, and take a new lease without the ORRI […]
From the General Counsel: NPRI Owners and Their Interests
The Non-Participating Royalty Interest Owner has been known to make things interesting for operators when the former has not fully been taken into account. Operators of oil and gas lands can potentially tread some dangerous water when it comes to the payment of royalties to all interest owners. Typically, operators have Drilling Title Opinions drafted […]