Production sharing and allocation wells have been drilled in Texas for some time, and have been used almost exclusively for horizontal wells. (An allocation well is a horizontal well drilled across two or more lease lines without creating a pooled unit that includes the leases. A production sharing well is…
In Texas, the Natural Resources Code, in Section 91.402 governs when royalties must be paid to royalty owners. Section 91.402(b) provides that royalty payments may be withheld without interest if there is a dispute concerning title that would affect distribution of payments or if there is a requirement in a…
Given the stresses on the oil and gas industry over the last year, it’s not surprising that there have been many oil company bankruptcies, both in Texas and throughout the country. Royalty owners throughout Texas have been getting notices that the operator who is paying their royalties have filed for…
As a Texas oil and gas attorney, I often find it necessary, when negotiating an oil and gas lease for a client, to add an addendum that modifies some of the terms in the printed lease. The printed lease form is often extremely operator oriented and does not give the…
The El Paso Court of Appeals recently decided a case that involved the use of the surface of land by a solar farm that was objected to by the Lyles, the mineral owners of the property. That case is Lyle et al v. Midway Solar LLC et al. The Defendant…
The San Antonio Court of Appeals recently issued an interesting opinion regarding a well operator’s claim that H2S/CO2 from a nearby injection well damaged its leased minerals. The case has been appealed to the Texas Supreme Court and oral argument has been scheduled for December 2020. The case is Swift…
The Texas Eleventh Court of Appeals decided yet another “continuous development” case in which the lessee tries to wiggle out of its obligations under the oil and gas lease with a strained interpretation of the lease terms (although in this case, both the lessor and the lessee were oil companies).…
The Texas Court of Appeals in El Paso, in HJSA No. 3, Ltd. P’ship v. Sundown Energy LP, issued a decision siding with the landowner on the interpretation of an oil and gas lease regarding the meaning of “continuous development“. The oil and gas lease contained two paragraphs related to…
In Piranha Partners et al v. Joe B. Neuhoff et al, the Texas Supreme Court examined a written assignment of an overriding royalty interest in minerals produced from land subject to an oil and gas lease in Wheeler County, Texas. The Neuhoffs claimed the assignment conveyed an interest only in…
The Texas rule against perpetuities (the “Rule”) was something all lawyers learned about in law school, but it seemed at the time like a concept we would not run into very often in real life law practice. Unfortunately, it comes up regularly in connection with Texas oil and gas leases…