Co-author Rusty Tucker

BlueStone Nat. Res. II, LLC v. Nettye Engler Energy, LP is another Texas case deciding whether language creating a nonparticipating royalty interest prohibited deduction of post-production costs. (Spoiler alert: it didn’t. Read on to learn why.)

The Deed

By a 1986 Deed Engler’s predecessors conveyed land to BlueStone’s predecessor. Grantor reserved an undivided 1/8th NPRI in the minerals and was entitled to 1/8th of gross production, “ … to be delivered to Grantor’s credit, free of cost in the pipe line, if any, otherwise free of cost at the mouth of the well or mine … .” (emphasis ours). Continue Reading Texas NPRI Burdened with Post-Production Costs

Co-author Rusty Tucker

Dayston v, LLC v. Brooke, voided a real estate contract because it failed to satisfy the Texas statute of frauds. Let’s see how the drafting mishap occured.

The description

A Farm and Ranch Contract between Dayston as seller and Brooke as buyer described the land to be conveyed this way: (Caveat, this is abbreviated, the entire description is in the opinion): “[t]he land … described as follows: 3379 FM Hwy 913, 515 Tennyson Dr, and +/- 81.50 DC … or as described on attached … Exhibit A.”, which further described the land as:

“3379 FM HWY. 913 …

To Include:

Legal: Acres: 8.290, … ;

Legal: Acres: 1.740, … ;

515 TENNYSON DRIVE …

To include:

Acres: 8.246, … SIMS CREEK SUBD, TRACT 1;

Legal: Acres: 10.290, … ;

81.50 Acres – Part of … (1.91 ACS) Parcel

*Please note the 81.50 acre parcel is being surveyed and renamed.Title company will convey the new legal address once completed.”

The claims

Brooke sued Dayston asserting that the contract was void due to an insufficient legal description and asked for return of earnest money.

Dayston replied that the description was sufficient, that there was a genuine issue of material fact because a person (Brooke) familiar with the area could locate the land with reasonable certainty, the contract allowed a survey “within 5 days of the effective date” of the contract, and the survey was referenced in the contract, thus satisfying the statute of frauds.

The trial court declared the contract void for an insufficient legal description and ordered the earnest money returned. The extrinsic evidence was inadmissible to cure the inadequate description.

What is required for a sufficient legal description?

You should know these rules pertaining to the statute of frauds:

  • The writing must furnish “within itself or by reference to other identified writings then in existence, the means or data by which the particular land to be conveyed may be identified with specific certainty.”
  • Although courts may construe multiple writings prepared for the same transaction as one contract, any documents referred to and incorporated in the contested agreement must be in existence at the time the parties executed the contested agreement.
  • If the writing and other identified writings do not sufficiently describe the property to be conveyed, then it violates the statute of frauds and is voidable.
  • Although the description does not have to include metes and bounds, it must furnish enough data to identify the property with reasonable certainty.
  • When it is possible that more than one tract of land fits the description, the statute of frauds is not satisfied (eg., an unidentified portion of a larger tract).
  • Although courts allow parol evidence when the writing contains a “nucleus of description”, the extrinsic evidence cannot be the sole means to “supply the location or description of the land,” but can only help identify the land “‘from the data in the [writing].’”
  • A street address, standing alone, may be insufficient if there is uncertainty about the amount of land in the conveyance.

On its face “+/- 81.50” acres was an indefinite amount of land. The exhibit added clarity but still described the land as two street addresses, listing the accompanying acres, and 81.50 acres from two larger tracts of land. The description was insufficient to identify the land with certainty.

Dayston argued that the insufficient legal description was cured, the property could be located with reasonable certainty because Brooke personally visited there on many occasions, and a survey was incorporated into the contract by reference.

These arguments were unpersuasive because the “knowledge and intent of the parties will not give validity to [an agreement].” Because the parcel was being surveyed and the new legal address would be provided “once completed,” the survey was not “then in existence” at the time of the contract was executed as required under the law. Dayston’s extrinsic evidence was inadmissible.

Worried about the future of our great country after the election? Don’t be.

Co-author Rusty Tucker

In re Plains Pipeline, L.P., is a suit to adjudicate title to groundwater. Did the trial court err in allowing a party to drill seven test holes on a tank farm? (Spoiler alert: It didn’t.) This decision evaluates an order in a unique civil discovery situation, and the underlying claims exemplify approaches to disputes over groundwater rights. Continue Reading A Unique Discovery Request in a Texas Water Rights Fight

The battle lines between pipeline companies and landowners are still being drawn. In Bayou Bridge Pipeline v. 38.00 acres nobody had a gun, nobody got taken away, and one side was right and one side was wrong.

There were two survivors:

  • The constitutionality of Louisiana’s statutory scheme for expropriation of private land for oil pipelines, and
  • BBP’s gamble to trespass and begin work before a judgment was obtained.  As BBP said, “time is money”.

Note to non-Louisiana lawyers: Unlike Texas at least, a Louisiana pipeline must obtain a judgment of expropriation before going on the property. Continue Reading Louisiana Oil Pipeline Expropriation System is Constitutional

Co-author Rusty Tucker

In Hlavinka v. HSC Pipeline P’ship, LLC, a Texas court denied a pipeline company’s claim that it is a common carrier with the power of eminent domain.

The Hlavinkas own 15,000+acres in Brazoria County. HSC owns pipeline systems in Texas. HSC’s manager Enterprise Products applied to the Railroad Commission for a permit to operate a new 44-mile long pipeline for the transportation of products including polymer grade propylene. The parties were unable to agree on terms for an easement across four tracts of land.

HSC filed a condemnation suit. The Hlavinkas challenged HSC’s eminent domain power asserting that the pipeline was not for public use and propylene is not crude oil. As a result, they alleged, HSC is not a common carrier and thus does not have authority to condemn private property. HSC filed a motion for partial summary judgment to establish its right to condemn as a matter of law. Continue Reading Status as a Common Carrier Denied by a Texas Court

Co-author Rusty Tucker

In Mayo Found. For Med. Educ. & Research v. BP Am. Prod. Co. a United States District Court considered the circumstances under which a lessor can withold its consent to assign an oil and gas lease.

The provision 

A lease from Barbara Lips* to Alpar Resources included Section 157 and other lands.  Paragraph 7 reserved to Lips an absolute veto right over any assignment of Alpar’s interest in the Lease.

An amendment to the lease replaced the original Paragraph 7 with this less-restrictive clause:

“The rights and obligations of the Lessee hereunder are not assignable or transferable in any respect by it, except upon the written approval of [Mayo], which approval shall not be unreasonably withheld.” Continue Reading Texas Court Evaluates Consent to Assign an Oil and Gas Lease

As the US continues to be more successful in reducing CO2 emissions than the parties to the Paris Climate Accord, those who would do the St. Vitus dance on the grave of the domestic oil and gas industry should consider the risks posed by the alternatives. Here are thoughts from some who know better than I (Read the sources yourself for details):

It won’t help.

Dutch economist Bjorn Lomborg agrees that climate change is real, man-made, and something to be dealt with smartly. He contends that California forest fires are not caused by climate change, but rather by bad state fires supression policy. Any realistic climate solution will achieve next to nothing. Even if the entire United States were to cut all of its emissions tomorrow and for the rest of the century, temperatures would still climb just 3/10ths of 1°F.

And China added 40 gigawats of coal-fired energy in 2019.

At the risk of being redundant, it won’t help.

Solar is costly.

According to a pro-solar site, Electricity from solar energy is five to 11 times more expensive to produce than from coal, hydro and nuclear sources. The problems are cost of technology, lack of efficiency of solar cells, and installation and maintenance costs. Technological advances could overcome these limitations but it will take decades.

Wind energy generates waste and other disadvantages …

It will cost $24 billion to dispose of 60,000 turbines currently used in the United States. Over the next 20 years the US alone could have to dispose of 720,000 tons of blade waste material. And enormous air and water pollution will occur in faraway countries where the mining, processing and manufacturing are done.

… and is toxic

According to Principia Scientific, Toxic and useless wind turbine blades can’t be recycled, and the volume will quadruple over the next 15 years as blades reach their 15-to-20 year lifespan. Wherever it goes, we know it won’t be to West Coast and Northeast metropolises.

The burden will fall on rural and poor communities.

Despite promises that the permitting process is not stacked against rural communities, a 340 MW wind project was okayed in western New York despite objections from the three counties that will be affected. The project will include 117 turbines each standing 600 feet high and will gobble up 30,000 acres. So says Robert Bryce in Forbes. I say get used to it.

Hydrogen is not the answer. 

For a number of reasons, its physical properties are incompatible with the requirements of the energy market. (Warning: This Watts Up WIth That! piece begins as a political rant but mellows out into a discussion of science.)

China will win, children will lose.

According to Jude Clemente in Forbes, the US is fully dependent on foreign countries for 14 of the 35 rare earth minerals the Administration considers to be critical to alternative energy development.  This will result in the transfer of trillions of dollars of wealth to China and further increase US dependence on the Chinese.

Mark Mills in National Review agrees. And chldren in African countries  will pay the price.

It won’t be a sustainable utopia.

Tilak Doshi in Forbes asserts that rigorous economic analyses of the hidden costs of solar and wind counter claims that wind and solar power are already competitive with gas and coal power plants.

RIP HOF’ers Lou Brock, Whitey Ford, Bob Gibson, Al Kaline, Joe Morgan, Tom Seaver …

Co-author Rusty Tucker

The threat: You, the operator, are operating unprofitable wells where monthly costs exceed or barely equal revenues, making money on the fixed COPAS overhead charges. Your non-operators are going into the economic hole and they don’t like it.

Yesterday we presented options for the non–operator to stop the financial bleeding. Today we anticipate responses available to the operator.

Yesterday’s caveats still apply. Continue Reading My Operator is Making Money … Part 2, The Operator’s Response

Co-author Rusty Tucker

With the plunge in commodity prices many formerly profitable wells are now in the red, and we don’t know for how long. This is causing non-operators to question the bona fides of the operations … and of the operator, and to search for a way out of their obligations.

The challenge: The operator is operating unprofitable wells where monthly costs exceed or barely equal revenues, making money on fixed COPAS overhead charges, and non-operators are going into the economic hole.  What can the non–operator do to stop the financial bleeding? Continue Reading My Operator is Making Money on the Well and I’m Not. What Can I Do? Part 1.