Co-author Rusty Tucker

Ridgefield 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 Brittany Blakey

In Headington Royalty, Inc. v. Finley Resources, Inc., this release was included in an acreage swap agreement:

Headington waives, releases, acquits and discharges Petro Canyon and its affiliates and their respective… predecessors and representatives for any liabilities… related in any way to the Loving County Tract…”

The swap agreement did not explicitly mention Finley Resources, and Finley did not execute the agreement.

The question

Was “predecessors” limited to prior corporate forms of the released party and its affiliates, or did it include predecessors-in-title?  The court held that Finley was not a corporate predecessor of Petro Canyon or its affiliates and therefore was not a released party.

The circumstances
Continue Reading “Predecessors” Does Not Include Predecessors-in-Title, Says Court

Co-author Rusty Tucker

Bell v. Midway Petroleum Grp., L.P., was a trespass to try title action, suit to quiet title for possession of a land, and a counterclaim for title by adverse possession. There are several …

… Takeaways

  • A Mother Hubbard Clause can save a deed in which the property description fails to satisfy the Statute of Frauds.
  • Testimony to establish adverse possession must be of such character as to indicate unmistakably an assertion of a claim of exclusive ownership in the occupant.
  • Where there is a claim for adverse possession, an overly agressive party risks paying the oppoent’s attorney’s fees.
  • Before you head off to the courthouse for vindication, remember that the complexity of legal and factual issues is wholly unrelated to the amount in controversy. We say that because this dispute seems like a lot of work for less than an acre of land.


Continue Reading Mother Hubbard Clause Saves a Property Deed

Co-author Brittany Blakey

Texas lien law in some cases does not require the filing of a financing statement for priority perfection. However, as you might have learned in In re First River Energy, the Delaware Uniform Commercial Code did not recognize the priority of Texas producers’ unfiled, unperfected security interests in proceeds under Texas Business and Commerce Code Section 9.343. In contrast, Oklahoma Producers prevailed because the Oklahoma Lien Act in 2010 cured a defect still present in the Texas statute. Texas producers with a lien are subject to UCC choice-of-law, priority, and perfection of security interests rules.

Rep. Charlie Green introduced House Bill No. 3794 which, if passed, would replace Section 9.343 with the “Texas First Purchaser Lien Act.”
Continue Reading Texas Legislature to Consider Oil and Gas Lien Law Amendment

Co-author Rusty Tucker

Yesterday we discussed aspects of PPC Acquisition Co., LLC, et al. v. Delaware Basin Res., LLC, et al. Today we consider whether the retained-acreage clauses created a special limitation or a covenant and the relationship between the clauses and Field Rules in place at several different times. Did Field Rules establishing 640-acre units expand  acreage each lessee could retain? (The clauses are highlighted in the opinion and facts are in yesterday’s post.)

What’s the difference?
Continue Reading Texas Court Parses Three Retained-Acreage Clauses – Part 2