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Co-author Kelley Clark Morris

Suing a state and its public officials is difficult because of the doctrine of sovereign immunity. There are exceptions. State of Texas v. Signal Drilling, et al. presents several of them.

The rules

The State and its agencies are immune from:

  • Suits seeking to construe or enforce contracts to which the State is a party,
  • Declaratory judgment actions,
  • Ordinary trespass to try title suits.

There are exceptions. For example:

  • Claims against a state official in his representative capacity for non-discretionary acts unauthorized by law (the ultra vires exception).
  • Claims for an unconstitutional taking of property without adequate compensation.
  • Suits to require state officials to comply with statutory or constitutional provisions.

Continue Reading No Sovereign Immunity for the Texas Land Commissioner

Co-author Rusty Tucker

In Texan Land & Cattle II, Ltd. v. ExxonMobil Pipeline Company a Texas court of appeals ruled that “oil or gas” is not limited to “crude petroleum,” but includes refined petroleum products gasoline and diesel.

The easement

Texas Land’s property in Harris County is burdened by an easement obtained by ExxonMobil from Humble Oil Company in 1919 that granted the right to lay, maintain, operate, and remove a pipeline for the “transportation of oil or gas” across Texas Land’s property. The easement does not define oil or gas.

The arguments

The sole issue was the definition of oil and gas as used in the easement. Texas Land contended that “oil and gas” granted the right to transport only “crude oil” or “crude petroleum,” but not refined products. ExxonMobil argued that “oil and gas,” as used in the early 20th century, included refined products such as gasoline and diesel.
Continue Reading What is “Oil or Gas” as Used in a Pipeline Easement?

Reports on the inevitable death of the fossil fuel industry are overdone (assuming it isn’t kidnapped in the middle of the night by the next administration and murdered by litigation, regulation and executive fiat). One reason is the advance of technology to remove CO2 and methane from oil and gas activities. Some examples:

Researchers at MIT have devised a system to remove CO2 from the atmosphere efficiently. The process, called “Fordaic electro-swing reactive adsorption for CO2 capture”, should help curtail greenhouse gas emissions.
Continue Reading Reducing Methane and CO2 from Oil and Gas Operations

Co-author Rusty Tucker

Scribner v. Wineinger, et al. affirms that acquisition of a Texas oil and gas leasehold by limitations is not defeated if the adverse possessor’s acknowledgement of a claimant’s title comes too late.

Transaction history

Scribner’s father conveyed all of the interest to his son by the “2002 Assignment” but Scribner was unaware of the instrument until 2016. (Thanks, Dad!) In 2010, the executor of the estate of the now-deceased father assigned the interest to Latigo. Scribner, ignorant of the windfall, didn’t claim ownership. By a series of assignments between 2010 and October 2016, Parra et al (including Wineinger) obtained the interest. During that time Parra and its predecessors operated the lease, received the revenue, and paid the taxes.
Continue Reading Limitations Title Not Precluded by Late Acknowledgment

The 2019 Texas legislature enacted a new Property Code Section 5.152 to protect mineral and royalty owners from a certain species of fraudulent transactions perpetrated on trusting and/or naïve and/or out of state mineral owners. Ethan Wood and I wrote about the scam when it made its way into the courthouse.

How the scam worked

The grifter, fronting for a company with a name similar to a reputable operator, would approach the owner with an oil and gas “lease” of minerals or royalty that were already subject to an existing lease. Except that the lease was actually the sale of the mineral or royalty interest at a bargain price. The scammers would then invoke arbitration provisions they had written into the conveyance, and relying on the confidential nature of the arbitration process, would stifle publicity of the inevitable dispute.Continue Reading Fake Mineral Leases Thwarted by the Texas Legislature

Under Louisiana law, does the operator’s bad faith preclude recovery for the non-operator’s breach of a joint operating agreement if the operator caused the non-operator to breach the JOA but did not itself breach?

Apache’s choice

In Apache Deepwater, LLC v. W&T Offshore, Inc., the litigants were parties to a JOA for operations on offshore deepwater wells. Apache proposed to use two drilling rigs or P&A three wells at a much higher cost than a vessel that had been considered for the operation. W&T contended that Apache’s proposal was for the purpose of offloading to W&T half of $1 million per day stacking costs of a bad rig contract. Apache’s AFE for the P&A using the two rigs was $81 to $104 million, which would be cheaper for them (but not in total) than the alternative. Apache’s story was that the federal regulators would not have approved the original vessel for the operation after Deepwater Horizon.

W&T declined to approve Apache’s AFE. Apache used the two rigs anyway. The work was successful and Apache billed W&T for its 49% share, or $68 million (Note to self: You can’t afford offshore operations). W&T paid $24 million, its share of the original estimate. Apache sued for breach of contract.

The ambiguous JOA

Section 6.2 of the JOA prohibited the operator from conducting any operation costing more than $200,000 without an AFE approved by the non-operator. But Section 18.4 directed the operator to conduct abandonments required by governmental authority and the risks and costs would be shared by the participating parties. No AFE was required.
Continue Reading Louisiana Operator’s Bad Faith Does Not Preclude Recovery

Co-authors Lydia Webb and Rusty Tucker

Until Monarch Midstream v. Badlands Energy, midstream companies facing rejection of their contracts in a producer’s bankruptcy were left with Abraham Lincoln’s least favorite negotiating option: If the both law and the facts are against you, pound on the table. Under Sabine (which we covered here, here, and here) gathering agreements are not covenants running with the land and can be rejected in the producer’s bankruptcy. Sabine was the only law on the books, but now a Colorado bankruptcy court has determined that a gathering agreement was a covenant running with the land.
Continue Reading Midstream Dedications – Colorado Bankruptcy Court Levels the Playing Field

It depends on which “debate” you’re talking about. What if there were an honest debate about all aspects of climate change? It wouldn’t be a faux debate about whether the world will end before the next Mardi Gras or during Lent, …  or before the next most-important election in history! The discussion could include the causes, the extent, the effects, and the solutions. We could have a panel! The participants would be people who actually know something about the science and the economics (Some do say the world’s standard of living counts. Perhaps the average UN bureaucrat’s can take a hit but there are others who aren’t so fortunate.)
Continue Reading Is the Climate Change Debate Over?