News & Analysis as of

TX Supreme Court Mineral Leases Energy Sector

Oliva Gibbs LLP

Muscled Out While “Muscling In”: The Role of Actual Drainage in MIPA

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In Ammonite Oil & Gas Corp. v. R.R. Comm’n of Tex., the Texas Supreme Court held that the Railroad Commission (the “RRC”) did not abuse its discretion in denying a “muscle in” application under the Texas Mineral Interest...more

McGuireWoods LLP

Producers May Subtract Gas Used to Power Post-Production Activities From “At-the-Well” Royalty Payments

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In Carl v. Hilcorp Energy Co., the Texas Supreme Court—addressing certified questions from the Fifth Circuit—held that producers may subtract the volume of gas powering post-production activities from “at-the-well” royalty...more

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

McDermott Will & Emery

Reasonably Prudent Operator or Good and Workmanlike Manner: Does Your Contract Have the Right Standard of Care?

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The standard of care is an important provision in any operating, management or services agreement because it sets forth the expectations of the parties as to how the contract should be carried out. It also functions as the...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

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

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

Porter Hedges LLP

Business Litigation Alert: "Texas Supreme Court Ruling Highlights the Importance of Heeding 'Red Flags' During Pre-Contract...

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Last month, the Texas Supreme Court upheld a lower court’s decision to toss a lawsuit by Orca Assets GP LLP against JP Morgan Chase over property in the Eagle Ford Shale. ...more

Gray Reed

NPRI Reservation Survives Rule Against Perpetuities

Gray Reed on

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

Fraud Claim Rejected for Unreasonable Reliance

Gray Reed on

The ruling from the Supreme Court of Texas in JP Morgan Chase Bank, N.A., et al v. Orca Assets, G.P., L.L.C. was foreseeable. Experienced energy professionals who pass on the opportunity to examine title for themselves are...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

Blank Rome LLP

Drill on Through to the Other Side: No Trespass When Drilling Through Mineral Estate with Surface Use Agreement

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Action Item: The Texas Supreme Court annunciated two critical points in Lightning Oil Co. v. Anadarko E&P Onshore: (1) unauthorized interference may be a trespass only when it impacts the mineral lessee’s ability to exercise...more

Gray Reed

Texas Subsurface Trespass Law Clarified

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We know that in Texas the mineral owner has the right to explore for and produce the minerals. What does that leave for the surface owner? In Lightning Oil Company v. Anadarko E&P Onshore, LLC the Texas Supreme Court tells us...more

Gray Reed

Option Contract Ruling Reversed by Texas Supreme Court.

Gray Reed on

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

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