Contacted at his seaside villa, Captain Renault exclaimed his shock that Elsie and Adrian Opiela are asking the Texas Supreme Court to review questions surrounding the Railroad Commission’s approval of a drilling permit for a Production Sharing Agreement well.

The Commission’s “65% Rule” for multi-tract horizontal wells is invalid because the Commission does not have

Co-author Brittany Blakey

The Texas Supreme Court has granted petition for review of a 2019 decision in Dyer et al v. Texas Commission on Environmental Quality . At issue is whether rescission of a Railroad Commission no-harm letter before the TCEQ granted an injection-well permit rendered the permit void.

The Injection Well Act (Chapter 27 of the Texas Water Code) governs the permitting process for underground injection wells in Texas. The Act aims to maintain the quality of fresh water for the public and existing industries while trying to prevent injections that may pollute fresh water. Under the Act, a company seeking to construct and operate an injection well must apply to the TCEQ for a permit. The applicant must also provide a “no-harm” letter from the RRC stating that the injection well will not damage an existing oil or gas reservoir.

I’m an oil and gas guy. Why does this order concern me?

This case is about injection wells for industrial and municipal waste, not for oil and gas waste. But the court’s treatment of the Administrative Procedures Act and the effect of (dueling?) orders of state agencies could inform future actions and orders of both agencies.

The long and complicated timeline
Continue Reading Texas Supreme Court to Review Approval of Injection Well Permit

Co-author Brittany Blakey

Ammonite Oil and Gas Corporation v. Railroad Commission of Texas illustrates the difficulties faced by lessees attempting to force-pool a tract under the Mineral Interest Pooling Act.  In this case, the applicant Ammonite failed to make a “fair and reasonable offer” to voluntarily pool before applying to the Railroad Commission.

Facts

Ammonite

Co-author Rees LeMay*

“Ratification is not a game of ‘gotcha’”, said the Texas Supreme Court in BPX Operating Co. v. Strickhausen.  The Court, in a 5-4 opinion, addressed the standard for an oil and gas lessor’s implied ratification of an unauthorized pooling. Among other lessons, this decision warns royalty owners to be careful when cashing those royalty checks.
Continue Reading Supreme Court Introduces Totality of the Circumstances Test for Implied Ratification

Co-author  Chance Decker

What does it take these days to get money from a Texas jury? Not much, it seems; in XTO v. Goodwin the trick was convincing a higher court that you should keep it.

Let’s start with the minefield that is the law of evidence:

  • Expert opinion testimony must be based on facts, and sound reasoning and methodology.
  • Conclusory or speculative opinion testimony is not relevant.
  • An opinion with no factual substantiation is speculative or conclusory.
  • Expert testimony based on unreliable data or flawed methodology is unreliable and does not satisfy the relevancy requirement.
  • Unreliable expert testimony is legally no evidence.

Continue Reading Trespass But no Damages in a Texas Case

confusedCo-author Chance Decker

Here is what we believe is an unusual situation: A gas unit is formed. The gas well ceases to produce. Another gas well produces from an oil unit, but the lease at issue is not included in the oil unit. Is the lease perpetuated by production from the second gas well?

In Yarbrough v. ELC Energy, LLC The answer is, in Texas, Yes.  Read on for why, and decide for yourself  if this result makes sense.
Continue Reading An Unusual Way To Hold an Oil and Gas Lease