Last month the Railroad Commission published proposed revisions to its rules governing the handling of oilfield waste. This is a comprehensive rewrite of its rules that had not been revised since 1984. The Commission has been working on these revisions for a year.  The published proposed rules can be found here. A good article summarizing ..read more

Unitex WI, LLC v. CT Land and Cattle Co., decided by the Amarillo Court of Appeals, petition for review pending in Texas Supreme Court. CT Land and Cattle owns the surface estate of 4,000 acres in Scurry and Kent Counties. The land is subject to an oil and gas lease signed in 1948 to Humble ..read more

Graves Dougherty Celebrates the Life of Ben F. Vaughan, III Rembrance here. My law partner for 45 years ..read more

Three scientists with the Department of Earth Sciences at Southern Methodist University have published the results of a study of blowouts of old wells in the Permian Basin caused by injection of produced water. The summary from the study: Wastewater, a byproduct during oil extraction, is generally injected back into the ground. Permian Basin has ..read more

Last week the Texas Supreme Court handed down its decision in Ammonite v. Railroad Commission, upholding the Commission’s denial of Ammonite’s MIPA application. Justice Young filed a dissenting opinion, joined by Justice Busby. The case has little implication for most mineral owners in Texas but is an important loss for the State of Texas and an important decision for future MIPA applications. The State of Texas owns the lands within the beds of navigable rivers and waterways, some 80,000 miles of rivers and streams. Where oil and gas development occurs adjacent to rivers, operators often leas ..read more

Last December a federal court in Oklahoma issued an order in a long-continuing suit between the United States and the Osage Nation, as plaintiffs, and Enel Green Power North America. United States v. Osage Wind, LLC, et al., No. 4:14-cv-00704-JCG-JFJ (US Dist. Ct. N.D. Okla., Dec. 20, 2023)  Enel’s subsidiary operates a wind farm on 8,400 acres of land in Osage County, with 84 wind turbines. The Osage Nation and the US government are seeking to enjoin Enel from operating its wind farm. The court’s order holds that the plaintiffs are entitled to an injunction requiring Enel to remove ..read more

In Hamilton v. ConocoPhillips, the Corpus Christi Court of Appeals construed a Production Sharing Agreement – to my knowledge the first appellate court to do so. A Production Sharing Agreement is an agreement between mineral owners and an operator to allow the operator to drill a horizontal well whose lateral will be located partly on the leased premises and partly on other lands. Generally, such agreements provide that the allocation will be based on the number of productive lateral feet of the well on each tract crossed by the well. If a well crosses Tract A and Tract B, and 60% of the produ ..read more

Today the Texas Supreme Court decided Carl v. Hilcorp Energy Co, No. 24-0036. Its opinion addresses certified questions submitted to it by the US Fifth Circuit Court of Appeals concerning a class action suit pending in that court. The Carls’ lease provided for payment of gas royalty based on its “market value at the well.” The lease also provided that royalty must be paid on gas “sold or used off the premises.” Hilcorp used some of the gas produced “off the premises” to transport or process the gas produced from the lease. Hilcorp did not pay royalty on the gas used. The Texas Supreme Court ag ..read more

I am sometimes asked to evaluate whether a lease has terminated for failure to produce in paying quantities. It is not an easy question to answer. So here is a summary of how “paying quantities” are determined. Basic Rules When an oil and gas lease provides it will remain in effect after the primary term as long as oil or gas is produced from the leased premises, the law presumes that such production must be in “paying quantities.” The lease is entered into for the parties’ mutual benefit. If the lessee is no longer reaping a benefit because expenses exceed income, “the lessors should not be r ..read more

Click here to see the agenda and speakers and to register ..read more