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

The US Department of Interior finalized a rule on Friday increasing royalty rates on oil and gas leases of federal land from 1/8th to 1/6th, and increasing minimum bonus rates from $2/acre to $10/acre. The regulations also increase bonding requirements to secure operators’ obligation to plug their wells. I’ve always been puzzled why federal leases are not granted the same way the Texas General Land Office does, with competitive bidding. Almost all leases of lands owned by the State of Texas or University Lands reserve one-fourth royalty. A lot of federal oil and gas leases cover offshore tract ..read more

In 2021 the Texas Legislature created the Texas Produced Water Consortium to study possible beneficial uses of fluid oil and gas wastes. The Consortium produced its report to the Legislature in 2022. I recently ran across a remarkable conclusion in that report: it estimates that in 2019 unconventional tight-oil formation wells in the Texas portion of the Permian Basin produced almost 4 billion barrels, or 506,800 acre-feet, of wastewater.  (click on image to enlarge) 506,800 acre-feet is a column of water covering an acre of land and 96 miles high. Or 11.6 square miles covered one foot de ..read more

In January the US 5th Circuit Court of Appeals submitted a “certified question” to the Texas Supreme Court. Federal courts have jurisdiction over cases involving only state-law issues if the parties are from different states – diversity jurisdiction. This is one such case. Carl v. Hilcorp Energy Company, No. 24-0036. The trustees of the Carl/White Trust sued Hilcorp Energy on behalf of royalty owners with language in their leases providing that the lessee must pay royalties on gas “sold or used off the premises.” The suit seeks class-action status on behalf of these royalty owners. The Trust’s ..read more

Registration is now open for the firm’s 8th annual seminar for Texas land and mineral owners. Seminar topics will include: Case Law Update Business Courts: What Are They and How Do They work ..read more

This year the Texas Supreme Court decided Van Dyke v. The Navigator Group, trying to give some structure to cases construing conveyances and reservations of royalty interests-whether fixed or floating. I wrote about the case last February. Since then two court of appeals cases have grappled with the issue: Royalty Asset Holdings II, LP v. Bayswater Fund III-A LLC, in the El Paso Court of Appeals, No. 08-22-00108-CV; and Thomson v. Hoffman, in the San Antonio Court of Appeals, No. 04-19-00771-CV. In Royalty Asset, the court construed the following royalty reservation: EXCEPT that Grantors, for ..read more

Last year the Texas Supreme Court decided Mitchell v. MAP Resources, holding that a mineral owner whose interest was sold at a tax foreclosure could collaterally attack the judgment and introduce extrinsic evidence that he had not been properly served with notice of the suit and therefore was deprived of due process under the 14th Amendment of the US Constitution. Gill v. Hill is another such case. The El Paso Court of Appeals ruled against the plaintiff, with one judge dissenting. The Texas Supreme Court agreed to hear the case, where it is now pending. The tax foreclosure in Gill v. Hill too ..read more

In this case, decided last April, the Texas Supreme Court held that the force majeure clause in an oil and gas lease could not be relied on to extend the date by which a well had to be commenced to keep the lease in force. The facts are these: MRC owned a lease covering 4,000 acres in Loving County. The lease provided that, at the end of the primary term, the lease would terminate except as to designated production units around existing wells unless MRC engaged in “continuous drilling”—spudding a well within 180 days after the spud date of the previous well. Prior to the end of the primary ter ..read more

This link shows a report from CBS Odessa affiliate about a huge leak of injected water. These events are occurring all over West Texas because the Railroad Commission grants permits to dispose of produced water into shallow formations. Thousands of old wellbores exist in West Texas, some never plugged, some plugged before regulation of wells, some plugged in violation of regulations. The over-pressurized formation breaks into the wellbore, or finds its way to the surface. Until the Commission addresses the problem by properly regulating produced water injection, these problems will only grow ..read more

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