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Charles Sartain

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Let’s begin with a quiz:

What is a “Labor” ? Assuming you met one face to face, how big is would you expect it to be?*

From Great Western. Drilling, Ltd. v. Pathfinder Oil & Gas, Inc. we learn that if you want one agreement to be conditioned on execution of another one, you’d better say so … in writing … in the first one. Texas courts look for ways to avoid conditions precedent.
Continue Reading Offer to Acquire Leases Could Not be Conditioned on a JOA

Co-author Kelley Clark Morris

Geary v. Two Bow Ranch Limited Partnership* is an example of the havoc an unusual contract provision can create.

In 1981, Geary and other Grantors executed a warranty deed conveying 2,614 acres (let’s call it the Property) in Bandera County, Texas, to Meader, Two Bow’s predecessor. The Grantors reserved an undivided one-half mineral interest, and conveyed one-half. The deed conveyed to Meader the ”executory rights” to its minerals and reserved the same to Grantors over their half. The deed included this “Provisional Authority” language:

“Grantee may control the executory rights pertaining to the minerals provided the Grantors and Grantee share equally in any and all proceeds related thereto.”
Continue Reading “Provisional Authority” to Control Executive Rights Not Assignable

The question in Cannisnia Plantation, LLC v. Cecil Blount Farms, LLC was whether a well was drilled in good faith in order to interrupt the running of prescription on a Louisiana mineral servitude.

The Mineral Servitude

If you conduct your business where they don’t have the Mardi Gras, the nutria, or the King of Zydeco, be mindful that in Louisiana there is no “mineral estate” that lives in perpetuity. Instead, there is the mineral servitude. See Mineral Code Article 21: “ … the right of enjoyment of land belonging to another for the purpose of exploring for and producing minerals and reducing them to possession and ownership.” Among the modes of extinction of mineral servitudes is prescription for nonuse for 10 years.Continue Reading Louisiana Servitude Extended by Good Faith Drilling

Co-authors Ethan Wood and Rusty Tucker

We read the comments and listened in on portions of the historic April 14 hearing on the proposal that the Commission order market demand prorationing of Texas oil and gas production. Of the 120+ written comments, 51 supported, 59 opposed, 12 were neutral, and several were not clear.

Here is our summary of the comments.* To read them for yourself, go to:  https://www.rrc.state.tx.us/general-counsel/open-meetings/comments-received-re-the-rrcs-april-14-2020-open-meeting/Continue Reading Who Said What at the Railroad Commission Market Demand Prorationing Hearing?

Co-author Rusty Tucker

Contract construction cases are fact-specific, but one can take lessons of general application from all of them. Here are the takeaways from Jones Energy, Inc. v. Pima Oil & Gas, L.L.C.,

  • In assigning an ORRI, it matters whether the parties intend to exclude production from a particular interval of a formation or from a particular wellbore.
  • It also matters, when two documents relate to the same subject, which one will control.
  • Courts rely on the grammatical meaning of words and phrases. If in doubt when writing or reviewing a document, brush up on your eighth grade grammar.

Caveat: If this analysis doesn’t make total sense (or, God forbid, makes no sense at all), it’s because the agreements are complicated and we don’t have the space to dive into them in detail. Focus on the takeaways.
Continue Reading Lessons from an Override Assignment

Co-authors: Gray Reed lawyers too talented and numerous to mention

I start with a promise: To leave you-know-what behind as soon as possible. In the meantime, here are summaries of your federal government’s effort to alleviate the distress caused by the situation. Click on each title for more detail and to learn about the appropriate…

Here we continue our discussion of the Texas Supreme Court’s opinion in Piranha Partners et al. v. Joe B. Neuhoff et al. determining that an assignment of an overriding royalty in minerals unambiguously conveyed the override in production under an entire lease. The Court concluded that circumstances surrounding the transaction didn’t matter. Here was the…