Seeligson v. Devon Energy: Gas Processing Fee Class Certified Seeligson v. Devon Energy Prod. Co., L.P., Civil Action No. 3:16-CV-00082-K, 2020 U.S. Dist. LEXIS 23166 (N.D. Tex. 2020). In this royalty class action case, the class plaintiffs alleged that DEPCO improperly passed a 17.5% “gas processing fee” on to all class members by reducing their royalty payments by 17.5% thereby breaching the duty to market. In certifying the class, the court reasoned that because the gas is bought and sold under one contract and determining the rate a reasonably prudent operator would have received (“RPO Rat ..read more

Crawford v. XTO Energy, Inc., No. 02-18-00217-CV, 2019 Tex. App. LEXIS 11066 (Tex. App.—Fort Worth Dec. 19, 2019, pet. filed) The Fort Worth Court of Appeals held that the “strip and gore doctrine” applied to a 1984 conveyance of 76 acres, causing the conveyance to also include a severed mineral interest underlying an adjacent 8.25-acre strip of land. Mary Ruth Crawford owned 145.99 acres of land in Tarrant County, Texas. In 1964, she conveyed to TESCO the surface of an 8.25 acre tract of land (“Disputed Tract”). That 1964 deed contained a mineral reservation and surface waiver, reading as fol ..read more

Chalker Energy Partners III, LLC v. Le Norman Operating LLC, No. 18-0352, 2020 Tex. LEXIS 161 (Tex. Feb. 28, 2020); Copano Energy, LLC v. Bujnoch, No. 18-0044, 63 Tex. Sup. Ct. J. 348, 2020 Tex. LEXIS 49, (Jan. 31, 2020) In response to COVID-19, many companies and their employees have quickly shifted to a “work from home” model. Even though email has been a large part of business for decades, the new “remote” reality has only increased our reliance on electronic communications. In a pair of recent cases, the Texas Supreme Court was tasked with deciding what role email plays in contract formati ..read more

WTX Fund, LLC v. Brown, No. 08-17-00104-CV, 2020 Tex. App. LEXIS 94 (Tex. App.—El Paso Jan. 8, 2020, pet. filed) In WTX Fund v. Brown, the El Paso Court of Appeals reviewed a dispute as to whether language in a 1951 mineral deed was sufficient to reserve a royalty interest in whole or in part. That issue turned largely on the meaning of the phrases “shall not affect” and “benefits.” Ultimately, the El Paso Court of Appeals held that, under the holistic four-corners approach, the proper interpretation was that the deed reserved the entirety of the grantor’s royalty interest. The granting clause ..read more

Piranha Partners v. Neuhoff, No. 18-0581, 63 Tex. Sup. Ct. J. 474, 2020 Tex. LEXIS 136 (Tex. Feb. 21, 2020) Where parties assign an interest in a lease with a single existing well, disputes can sometimes arise when the leasehold is further developed. Was the parties’ intent for the assignment to be limited to that single wellbore or did it also include production from later-drilled wells? The Texas Supreme Court reviewed a dispute as to whether an assignment of an overriding royalty interest conveyed an interest limited to an entire lease, a single well, or to the lands identified in the assig ..read more

Atmos Energy Corp. v. Paul, No. 02-19-00042-CV, 2020 Tex. App. LEXIS 1926 (Tex.App.-Ft. Worth, Mar. 5, 2020, no pet.) In this case the Fort Worth Court of Appeals held that a “blanket easement” for multiple pipelines did not require the grantee to lay the additional pipelines along the same route as the initial pipeline, but rather the grantee was permitted to lay the additional pipeline anywhere upon the entire tract so long as its location does not unreasonably interfere with grantor’s property rights. The basis for the suit stems from a right-of-way and easement granted in 1960 on a 137-acr ..read more

Mesa Southern CWS Acquisitions, LP v. Deep Energy Exploration Partners, LLC, No. 14-18-00708-CV, 2019 Tex. App. LEXIS 10107 (Tex. App.—Houston [14th Dist.] November 21, 2019, no pet.). The Fourteenth Court of Appeals in Houston held that provisions within a master service agreement, stating that a subcontractor could only seek payment or damages exclusively from the contractor, were effective to preclude that subcontractor from enforcing a mineral lien against the mineral property owner. In effect, some have interpreted this case as allowing a de facto lien waiver for Chapter 56 mineral liens ..read more

Sam V. Laborde Marine, L.L.C., Civil Action No. H-19-4041, 2020 U.S. Dist. LEXIS 1585, (S.D. Tex. 2020) Following removal from State Court, the Plaintiff challenged the federal trial court’s jurisdiction over the Plaintiff’s personal injury claim. Ultimately, the district court concluded that it had jurisdiction under the Outer Continental Shelf Lands Act (“OCSLA”), which grants federal courts jurisdiction over certain disputes arising out of conduct on the Outer Continental Shelf (“OCS”), codified at 43 U.S.C. 1331, et seq. At the time of his injury, the Plaintiff was working as an inspector ..read more

Given the recent historic developments of the global pandemic and the dramatic drop in oil prices, the oil and gas industry is facing new issues never before encountered at this magnitude. For instance, storage of oil and gas is expected to reach full capacity. Pipeline companies are refusing to accept production in their pipelines. Global demand has come to a dead halt. The Railroad Commission has been asked to consider implementing statewide proration. In many cases, producers are facing the dilemma of involuntarily shutting in wells at the risk of possibly losing valuable leases. How long t ..read more

Oil and gas price volatility has always been an inescapable element of the energy business. That said, the current confluence of events is unprecedented and would have been hard to predict. On March 6, 2020 when the COVID-19 crisis was slowly making its way into the domestic news cycle, a long simmering conflict between Saudi Arabia and Russia over production levels came to a head with Russia’s refusal to continue abiding with OPEC guidance for agreed production level reductions. Saudi Arabia’s subsequent decisions to dramatically increase production levels and discount oil pricing were met wi ..read more