In Hogg v. Blackbeard Operating, 656 S.W.3d 671, 673 (Tex. App.—El Paso 2022, no pet.), the El Paso Court of Appeals evaluated an assignment of leases in Winkler County, Texas. The owner of the minerals in question executed two leases for their interests, one in 1994 and one in 1998. In 2005, their lessee executed an assignment of leases to Standolind Oil and Gas.  The exhibit to the assignment listed the 1994 lease but not the 1998 lease. The Court noted that the language of the assignment was broad. It assigned “all of the assignor’s interest in “the land conveyed by the Leases” and lan ..read more

The El Paso Court of Appeals recently interpreted two deeds with conflicting fractions that each exhibited the estate misconception theory. In Davis v. COG Operating, LLC, 658 S.W.3d 784 (Tex.Civ.App.—El Paso 2022, no pet.) the original mineral owners executed two deeds to two different grantees. In the first deed to W. H. Haun, the interest conveyed is described as a “1/32 interest in and to all of the oil, gas, and other minerals.” Another clause described the interest as including “1/4 of all of the oil royalty and gas rentals, or royalty” under an existing lease. Another clause indicated t ..read more

The Texas Supreme Court recently decided a case in which an oil company’s withholding of production payments was contested. In Freeport-McMoRan Oil & Gas LLC v. 1776 Energy Partners, LLC, ___ S.W.3d ___, 2023, WL ___ (Tex. May 19, 2023), two oil companies, Ovintiv and 1776 Energy, entered into an agreement to jointly develop and produce minerals from certain leases they owned in Karnes County. Ovintiv  was in charge of distributing production payments. A third oil company sued 1776 to require it to transfer leases to the third company, and obtained a constructive trust on production p ..read more

In Bridges v. Uhl, No. 08-21-00130-CV,  (Tex. App.—El Paso 2022, no pet. h.) the El Paso Court of Appeals added it’s decision to the already substantial volume of court decisions grappling with the question of whether the royalty language in a deed was a fixed or a floating royalty. The distinction has substantial economic consequences. As the Court describes it: “(A royalty) interest may be conveyed or reserved in one of two ways: ‘as a fixed fraction of total production’ (fractional royalty interest) or ‘as a fraction of the total royalty interest’ (fraction of royalty interest) … A fra ..read more

I recently had occasion to reread an article from 2021 by Jude Clemente, a contributor to Forbes and the Principal at JTC Energy Research Associates, LLC. The article contains an excellent analysis of the benefits of fracking and the problems with the arguments against it. The article is entitled “Why Do ‘Fracking’ Opponents Ignore Its Moral Benefits” and you can read it here. The article is well researched, and I recommend it to any of you interested in the pros and cons of fracking, regardless of your personal view. The post An Interesting Analysis of the Pros and Cons of Fracking appeared f ..read more

The Texas Supreme Court has just issued an opinion in Point Energy Partners Permian LLC v. MRC Permian Co., ___ S.W.3d ___, 2023 WL ___, (Tex. Apr. 21, 2023) that involves the application of the force majeure language in an oil and gas lease. Force majeure is a legal doctrine that excuses performance under a lease for certain unforeseen circumstances or “Acts of God”. In this case, the oil and gas lease required the oil company to commence drilling a new well by a certain date in order to prevent the lease from terminating at the end of the primary term. The oil company scheduled the drilling ..read more

The Texas Supreme Court recently issued an opinion in a case in which royalties were calculated to be greater than gross proceeds. In Devon Energy Prod. Co. v. Sheppard, ___ S.W.3d ___, 2023 WL ___ (Tex. Mar. 2023) [20- 0904], the leases being considered provided for royalty payments based on gross sales proceeds. However, in what is frankly unusual language for leases, the leases stated that if “any reduction or charge for [postproduction] expenses or costs” has been “include[d]” in “any disposition, contract or sale” of production, those amounts “shall be added to the . . . gross proceeds ..read more

The Texas Supreme Court interpreted yet another confused mineral reservation in a deed in the case of Van Dyke v. Navigator Grp., ___ S.W.3d ___, 2023 WL ___ (Tex. Feb. 17, 2023). The 1924 deed contained a reservation of “one-half of one-eighth” of the mineral estate. The question was: did the grantor reserve a one-half interest in the minerals or a 1/16 interest in the minerals? The evidence in the case reflected that the grantor and the grantees and even third parties for decades had treated the deed as having reserved a one-half interest in the mineral estate to the grantor and conveyed one ..read more

Texas oil and gas companies can engage in a variety of procedures as part of their exploratory process before they drill an oil and gas well. One such procedure is seismic testing or a seismic survey. Seismic testing is a process that results in an image of the subsurface of property. The kind of seismic testing done most often in Texas uses a “thumper truck” which contains a large plate in the center of the truck that is thumped on the ground. The shock waves emanating from the thumping result in data that can be collected digitally and result in a map of the subsurface. Seismic testing can a ..read more

In a case last year before the Texas Supreme Court, BPX Operating Co. v. Strickhausen, 629 S. W. 3d. 189 (Tex. 2021), the Court addressed whether the acceptance of royalty checks by a lessor constituted a ratification of the oil company’s pooling of the leased premises in violation of the anti-pooling clause in the lease. Margaret Ann Strickhausen signed and oil and gas lease with BPX Operating that specifically prohibited pooling without the express written consent of the lessor. BPX sent her a ratification of pooling which she refused to sign. BPX pooled her property anyway. BPX continued to ..read more