[Updated] The North Dakota Supreme Court will hear oral arguments on Thursday to consider who owns the right to profit from the value of the porous spaces within subsurface rock formations. The issue is over Senate Bill 2344, passed by the Legislature in 2019 and, no
Consider the power of a single word over the fortunes of the parties to a property deed. Such was the effect of the court’s ruling in Barrow Shaver Resources, LLC, et al v. NETX Acquisitions, LLC, et al.
In 1963, by the Stone Deed, Dawson and Hill conveyed a 181-acre tract in Cass County, Texas, to the Stones (John and Treba, not the Rollings). The granting clause described the land by metes and bounds, and continued, “There is likewise conveyed … 1/8th of the Oil, Gas and Other Minerals … .” The conveyance was subject to an oil and gas lease then existing. At the time of the suit, Barrow Shaver had an oil and gas lease from Dawson/Hill and NETX had a lease from Merritt (successor to the Stones).
The question and spoiler alert
Did Dawson/Hill convey 1/8th of the minerals or did they convey 100% of the minerals and attempt to reserve 7/8ths in themselves? Dawson and Hill conveyed 1/8th of the minerals (and the surface, of course).
The Court’s journey to the answer
Continue Reading Texas Court Decides What “Likewise” Means in a Conveyance
Co-author Brittany BlakeyIn Texas, what happens to an obligation to bury pipelines when, after creation of the obligation, the surface and minerals are severed? Henry v. Smith explains.
Henry et al own the surface estate of the Camp Creek Ranch, a 15,000-acre tract in Archer County. Smith et al are lessees in three oil
In Emerald Land Corp. v. Trimont Energy (BL) LLC, a Louisiana federal court considered whether a lessee was required to remove flowlines buried beneath the surface and canal bottoms of property subject to mineral leases.
What the leases said
Each of three leases granted to lessee Chevron the exclusive right to construct lines, tanks, storage facilities, and other structures necessary “to produce, save, take, care of treat and transport” oil and gas products. All three had identical damages provisions: “Lessee shall pay all damages caused by its operations hereunder to the land, buildings and improvements presently existing… [.]” Chevron contended that the granting language included the express right to install buried flowlines in connection with its activities. No provision expressly required restoration of the land by removing buried flowlines or paying the cost of removal.
Addressing lease terms and Castex
Relying on the lease terms and Terrebonne Parish School Board v. Castex Energy, Inc., Chevron differentiated between buried flowlines (buried below “plow depth”, which here was at least three feet) from surface flowlines, alleging that buried lines did not cause damage to the land. Chevron admitted it had to remove the surface lines.
Emerald distinguished Castex arguing that, unlike the canals dredged on the property in that case, these flowlines were foreign equipment attached and buried on the property. Therefore, Chevron was obligated to remove the lines as part of its obligation to restore the land to its original condition minus normal “wear and tear.” Emerald also pointed to evidence showing that buried flowlines were exposed at the surface of the property and, presumably, created a hazard.
Continue Reading Louisiana Court Considers Buried and Surface Flowlines
Here we go again, in Gary and Theresa Poenisch Family Ltd. P’Ship v. TMH Land Servs., Inc., learning that a purported Texas land transaction will not be enforced if the parties fail to comply with the Statute of Frauds.
Poenisch and TMH, among others, jointly owned an overriding royalty interest in the
Resistance was futile for defendants opposing a temporary injunction sought by a party armed with a FERC Certificate of Public Convenience and Necessity that includes condemnation rights under the Natural Gas Act. In Venture Global Gator Express v. Land et al., Venture Global sought to condemn land in Plaquemines Parish, Louisiana, and a preliminary injunction for immediate possession of the property.
The NGA requires that the party seeking to condemn be unable to acquire the property by contract or unable to agree on compensation to be paid. Defendants, Capt. Zack’s Myrtle Grove Properties and ESB Louisiana Opportunities (who held an Option to acquire certain rights) challenged the characterization of a portion of the proposed servitude as temporary instead of permanent and accused Venture Global of not negotiating in good faith.
The right to condemn
Continue Reading Louisiana Federal Court Allows Injunctive Relief Under FERC Certificate of Public Convenience and Necessity
Co-author David LeonardMcFarland Land & Cattle, Inc. v. Caprock Solar I, LLC considered what is the required under New Mexico law to establish a public prescriptive easement, and brings to life the full meaning of “100 feet of bad road”.
The facts
A state road runs along section lines that divides property owned by
Co-author Brittany BlakeyYowell v. Granite Op. Co. and Apache Corp. v. Peyton Royalties, L.P. is another Rule Against Perpetuities case. Keep reading. The anti-washout protection for your reserved overriding royalty could be at risk.
The court of appeals (on remand from the Supreme Court) determined that a reserved overriding royalty interest in an oil and gas lease may be reformed under section 5.043 of the Texas Property Code to comply with the Rule.
Continue Reading Texas Court Addresses Anti-Washout Clause and Rule Against Perpetuities
Co-author Rusty TuckerRidgefield Permian, LLC, et al. v. Diamondback E & P LLC, et al. addresses the scope of a property interest foreclosed upon by a tax suit in Reeves County, Texas. In this post we will shortcut the complicated facts and discuss the takeaways. The rules are what you need.
Royalty interests that were subject to an oil and gas lease were foreclosed upon and sold by the sheriff. The lease then terminated. Both the purchaser of the foreclosed interest (Magnolia, LLC) and the assignee (the Trust) of the former royalty owner whose interest was foreclosed upon (Albert) claimed to own the possibility of reverter * (the POR) and granted oil and gas leases.
The point
The Supreme Court of Texas has held that a POR is not taxable. The POR was not included in the property interest that was the subject of the tax foreclosure. The foreclosed interest was a royalty interest under the Meriwether lease. The POR, owned by Albert, was not derived from, part of, or attached to the foreclosed royalty interest. Therefore, the tax lien did not attach to the POR.
Continue Reading Tax Foreclosure on Royalty Did Not Include Possibility of Reverter
Co-author Travis Nadalini*If you aren’t quite sure about the difference between trespass to try title and suit to quiet title, Lockhart as Tr. of Lockhart Fam. Bypass Tr. v. Chisos Mins., LLC explains. But first, …
Continue Reading Try Title vs. Quieting Title: What’s the difference?