Harrison v. Rosetta Resources Operating LP presents a wacky? time-wasting? clever? unsuccessful attempt to
expand reinvent the Texas accomodation doctrine.
The doctrine defined
To prevail on a claim under the accommodation doctrine the surface owner must prove:
- The lessee’s use of the surface completely precludes or substantially impairs the existing surface use, and
- The surface owner has no reasonable alternative method available to continue his existing use of the surface.
If he carries that burden, he then must prove that under the circumstances there are alternative reasonable, customary, and industry-accepted methods available to the lessee which will allow a recovery of the minerals and also allow the surface owner to continue the existing use.
Who did what?
Surface owner Harrison signed an oil and gas lease on 320 acres in Reeves County for mineral owner the State of Texas (see Section 52.182, Natural Resources Code). The lease allowed the lessee to use water from the land necessary for operations, except water from wells or tanks of the owner of the soil.
In order to settle a lawsuit with Harrison, lessee Comstock agreed to purchase 120,000 barrels of water. Comstock built a frac pit to store water for use in drilling operations, completed two wells, and assigned the lease to Rosetta, who drilled a third well and planned several more. Rosetta did not purchase water from Harrison. Instead it pumped water from a neighbor and brought temporary waterlines onto Harrison’s property to fill storage tanks. Hoses installed by Rosetta were removed after three to six days.
The “West Texas Rule” …
Harrison claimed a Rosetta employee orally agreed to continue the same arrangement as Harrison had with Comstock and that Rosetta violated the “West Texas Rule”: It was customary that an oil and gas lessee would only purchase water from the surface owner of the tract it was operating and not pump in neighboring water unless necessary.
Bringing in the hoses and equipment would have been unnecessary had Rosetta bought water from Harrison. The accommodation doctrine was violated, Harrison said, by Rossetta’s failure to purchase his water, thus rendering the frac pit unprofitable and unnecessarily causing damage to his property. The existing surface use of pumping and storing water for sale and use involving gas operations was an existing use. Comstock’s frac pit unified the use of the land with oil and gas operations and Rosetta’s election not to buy his water substantially interfered with an existing use of the land as a source of water for drilling operations.
About now you’re thinking, What “West Texas Rule”? Correct, there is no such thing. Summary judgment for Rosetta affirmed. The court concluded that referring to Comstock’s water purchase as an “accommodation” confused the meaning of the word with the test established by the supreme court. The lessee’s actions must substantially interfere with or preclude an existing surface use. Rosetta didn’t impair Harrison’s existing surface use in any way. Inconvenience to the surface estate is not evidence that the owner has no reasonable alternative to maintain the existing use. Comstock’s purchase of Harrison’s water wasn’t an accommodation. It was settlement of a lawsuit and not from a general desire to harmonize the uses of the land.
Harrison’s claims for breach of contract, trespass, negligence, gross negligence and a request for damages, permanent injunction and cancellation of the lease were also denied.
A musical interlude appropriate for the moment.