News & Analysis as of

Energy Sector Mineral Leases Contract Terms

Locke Lord LLP

The Texas Supreme Court Holds Interest Must Be Simple Absent an Express, Clear, and Specific Provision for Compounding

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The Texas Supreme Court has clarified Texas law concerning how to calculate interest that is being paid pursuant to an agreement or statute. Samson Exploration, LLC v. Bordages, No. 22-0215, 2024 WL 2869049 (Tex. June 7,...more

Dorsey & Whitney LLP

Alternatives For Managing Distress In The Oil Patch

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According to the U.S. Energy Information Administration (EIA), the United States (U.S.) regular gasoline retail price as of the Monday before Labor Day fell to $2.22 per gallon this year, the lowest level for this time of...more

McGuireWoods LLP

Texas Appellate Court Analyzes Purchase and Sale Agreement Drafting and Terms

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The 11th Court of Appeals in Texas recently issued an opinion analyzing provisions of purchase and sale agreements (PSAs) governing working interests in oil and gas leases. In the opinion in Apollo Exploration, LLC v. Apache...more

Skadden, Arps, Slate, Meagher & Flom LLP

Supreme Court of Texas Clarifies Allocation of Post-Production Costs in Oil and Gas Royalties in BlueStone Natural Resources II,...

On March 12, 2021, the Supreme Court of Texas issued a unanimous opinion that clarifies when a lessee is entitled to deduct post-production costs from royalties paid to the lessor under oil and gas leases. Construing a lease...more

Akin Gump Strauss Hauer & Feld LLP

Rundown of Recent Developments in Covenant Running with the Land Tension

Concerns Raised by Sabine - The seminal decisions in Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC provided guidance on whether midstream and transportation providers can rely on the contractual dedications...more

Womble Bond Dickinson

WIPEOUT!: Common Language in “Anti-Washout” Provision Violates the Rule Against Perpetuities

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In Yowell v. Granite Operating Co . 557 S.W.3d 794 (Tex. App.—Amarillo 2018, pet. granted), the Texas Court of Appeals for the Seventh District in Amarillo affirmed the trial court’s determination that an “anti-washout”...more

Bricker Graydon LLP

Judgment issued for oil and gas well operator

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On September 6, 2018, the Monroe County Court of Common Pleas issued a decision in Theresa Jacobs, et al. v. Dye Oil, LLC, et al., C.P. Monroe No. 2017-189 (September 6, 2018), granting summary judgment for the operator of an...more

Gray Reed

An Arbitration Ruling That’s About More Than Arbitration

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In 2016 Ridge contacted the McDaniels (Double Eagle’s predecessors) with an offer to “lease” their mineral interests in Winkler County. The McDaniels informed Ridge about a producing lease from 2004, and were assured that it...more

Gray Reed

Anti-Washout Clause Defeated by the Rule Against Perpetuities

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Is an overriding royalty interest lasting beyond the term of a lease-now-in-effect impossible to create? You saw the recent Texas Supreme Court opinion invalidating an anti-washout clause in TRO-X v. Anadarko Petroleum Corp....more

Bricker Graydon LLP

Ohio's Fifth District Court Of Appeals Issues A Decision On Unitization

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On August 13, 2018, the Ohio Fifth District Court of Appeals issued a decision in Am. Energy-Utica, LLC v. Fuller, 2018-Ohio-3250, holding that an order unitizing the landowner’s parcel under R.C. 1509.28 after the landowner...more

Gray Reed

Original Louisiana Lessee Can’t Escape Liability

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Louisiana practitioners and their clients tend to know this particular point of Louisiana law, but it could surprise out-of-staters (known in their native habitat as “Texans”), so it’s worth a reminder...more

Gray Reed

Texas Supreme Court Decides Another Fixed-or-Floating Royalty Case

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Coke or Pepsi? Elvis or the Beatles? Left Twix or Right Twix? Fixed or floating royalty? Among the great debates of recent decades, few have proven quite as frustrating as the great “Fixed v. Floating” royalty debate in Texas...more

Gray Reed

Foreclosure Included the Minerals Because the Documents Say So

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In XTO Energy v. EOG Resources, a title dispute over the mineral estate in 1,653 acres in Atascosa and McMullen counties, Texas, the loser tried both, to no avail....more

Gray Reed

NPRI Reservation Survives Rule Against Perpetuities

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Recall the Battle of the Bastards: The heroic Lady Sansa and the duplicitous Lord Baelish gallop over the hill to save the foolish Jon Snow from the heinous Ramsey Bolton. In similar fashion, but without the malnourished...more

Gray Reed

Opinions to Expect From the Texas Supreme Court

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The Texas Supreme Court recently heard oral argument in three intriguing oil and gas cases. Here’s what you need to know about two of them (We’ll address the third case soon)....more

Gray Reed

Ohio Takes a Position on Market-Value-at-the-Well Royalty Clauses*

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In Ohio, in calculating royalties in a market-value-at-the-well lease (as distinguished from a “proceeds” lease), post-production costs are to be shared proportionately by the working interest and royalty owners. ...more

Gray Reed

An “Appendage” Determines a Louisiana Royalty Dispute

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In Glassell Producing Company v. Naquin, the question was: Did a conveyance among siblings create a real right in property, or was it an appendage of a lease that ceased to burden the property once that lease was...more

Gray Reed

An Unusual Way To Hold an Oil and Gas Lease

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Here is what we believe is an unusual situation: A gas unit is formed. The gas well ceases to produce. Another gas well produces from an oil unit, but the lease at issue is not included in the oil unit. Is the lease...more

Gray Reed

The Parol Evidence Rule at Work in a Mineral Transaction

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A phrase currently in common usage begins with “‘cluster” and ends with a vulgarity that has been around for centuries. Saheid v. Kennedy presents facts that pretty much exemplify the meaning of the phrase...more

Gray Reed

Mineral Lease Prevails in Louisiana Royalty Dispute

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Prevails over what, you ask? In Gladney v. Anglo-Dutch Energy, LLC, a conditional allowable from the Office of Conservation didn’t supersede lease royalty obligations....more

Gray Reed

Have You Reviewed Your Lease Maintenance Processes Lately?

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You might conclude that the but-for-the-grace-of-God-that-could-be-me nightmare presented in In re: RPH Capital Partners is instructive only for lawyers. If so, you would be mistaken. The lesson: If you want to win the...more

Gray Reed

TXO v. Vela Remembered in a Gas Royalty Case

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Westport Oil & Gas Company, L.P. v. Mecom et al. presented this question: Was the lease royalty based on a gas purchase agreement formula or on the royalty clauses’s market value at the well provision? Spoiler alert:...more

Gray Reed

Option Contract Ruling Reversed by Texas Supreme Court.

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North Shore Energy v. Harkins interpreted an Option Agreement between landowners and a producer over a 400 acre tract. In football they would say the Texas Supreme Court pancaked the plaintiff. In the law, some would call it...more

Gray Reed

Louisiana Partition Agreement: You Can’t Trade What You Don’t Own

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Square Mile Energy LLC v. Pommier considered this language in a Louisiana partition agreement: “N.B: Included in this transfer are any and all mineral rights, when available, to Roxanne and all surface rights.” Did this...more

McGuireWoods LLP

Pennsylvania Superior Court: Separate Consideration for Operated and Unoperated Acres Does Not Render an Oil and Gas Lease...

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The recent boom in natural gas production in the Appalachian Basin has led to a concomitant boom in litigation, as landowners who are lessors in long-standing oil and gas leases seek declarations that the leases are no longer...more

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