Lease Disputes

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Updated for a math infraction, thanks to several astute readers.

In Glassell Producing Company v. Naquin, the question was:

Did a conveyance among siblings create a real right in property, or was it an appendage of a lease that ceased to burden the property once that lease was terminated?
Continue Reading An “Appendage” Determines a Louisiana Royalty Dispute

Co-author Chance Decker

How many times must an operator suffer for a mistake in a unit declaration? Samson Exploration LLC v. T. S. Reed Properties Inc. makes it twice. (See Hooks v. Samson Lone Star for the first round). The Texas Supreme Court ruled that a lessee could not avoid a contractual obligation to pay royalties from a zone shared by two pooled units.
Continue Reading Unit Operator Pays For a Problem of its Own Making

Conoco Phillips Company v. Ramirez et al is a helpful reminder when preparing a document transferring title:

  • “Family vernacular” is a great way to communicate in wedding toasts and funeral eulogies, not so much in land conveyances.
  • Absent an express reservation, a conveyance of land includes both the surface and the underlying minerals.
  • When there is a claim of ambiguity, extrinsic evidence may not be used to create doubt as to the plain meaning of the words.

Continue Reading Informal Description Dooms Oil and Gas Leases

Co-author Chance Decker

You’ve seen the headlines.  The portrait is complete; the verdict is in; the clock has run down to zero. The devastation of Harvey is “unprecedented” and it’s all because of climate change. That’s not necessarily so, thanks to Powerline and Dr. Roy Spencer.  Read it and reach your own conclusion.

And now, on to the the law

Apache Deepwater, LLC v. Double Eagle Development, LLC asked whether a retained acreage clause provided for “rolling terminations” after the primary term or “snapshot termination”. As you might expect, the result depended on the language of the lease.
Continue Reading Harvey and Climate Change, and Consideration of a Retained Acreage Clause

Like Les, except with an offense, Coach O congratulates the Tigers for subscribing to Energy and the Law

Lenders to Louisiana operators are likely to be reconsidering their business practices in light of Gloria’s Ranch v. Tauren et al.

A rather ordinary lease termination suit resulted in the lender Wells Fargo being solidarily liable with the lessees for $22.8 million in lost leasing opportunities, $242,000 in unpaid royalties, $484,000 in statutory damages, and almost $1 million in attorneys’ fees.

Here’s why:
Continue Reading A New Day for Louisiana Oil and Gas Lenders?

Suggestions to Texas lessors after ExxonMobil v. Lazy R Ranch, et al:  Claiming that you were not aware of contamination from oil spills you’ve known about for 20 years is a tough sell, and suing your long-time lessee for millions right after it sells your lease looks a wee bit opportunistic.

For nearly 60 years Exxon operated wells on the 20,000 acre Lazy R Ranch before selling the lease in 2008. The Ranch hired an environmental engineer who identified a total of 1.2 acres in four areas where hydrocarbon contamination exceeded levels set by state law.

In 2009 the Ranch sued Exxon for contamination and sought damages for remediation of the 1.2 acres that would cost $6.3 million. (At least they waited to bite until the hand was no longer dispensing the groceries).

The damage claim presented a problem for the Ranch. Under Texas law the recovery for damages for a permanent injury to real property is generally limited to the difference in value of the property before and after the injury.
Continue Reading Another Oil Field Contamination Plaintiff Waits Too Long

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

Co-author Brooke Sizer

Prevails over what, you ask? In Gladney v. Anglo-Dutch Energy, LLC, a conditional allowable from the Office of Conservation didn’t supersede lease royalty obligations.

How did we get here?

Anglo-Dutch completed a gas well on the Gladneys’ lease and then filed a pre-application notice for a compulsory drilling and production unit…