A recent Texas case decided by the San Antonio Court of Appeals, Texas Outfitters Limited, LLC v. Nicholson, offers some lessons on an executive rights owner’s fiduciary duties to the non-executive mineral owner in the context of oil and gas leases. At trial, the executive interest owner, Texas Outfitters, was…
Mineral owners in Texas often sign oil and gas leases that include language that requires that oil or gas be produced in commercially paying quantities in order to keep the lease alive. When production falls below that level, the lease may terminate or lapse, and the mineral interest reverts to…
When an oil and gas well is no longer producing (or if it needs major repairs but the production is not sufficient to justify the cost of repairs), Texas Railroad Commission rules require that the well must be plugged. The plugging procedure (which you can read about here) involves cementing…
When parties enter into agreements concerning the conveyance of mineral royalty interests in Texas, it is extremely important that the language of the conveyance is clear and that the parties know exactly what they are agreeing to in terms of how the royalty interest is structured. The San Antonio Court…
When a mineral estate and a surface estate co-exist, there is sometimes conflict. Under Texas law, the owner of the mineral estate is considered to be the “dominant” estate over the surface estate because the mineral owner has the right to use as much of the surface “as is reasonably…
I get calls every week from folks who have received a letter in the mail offering to purchase their Texas mineral interests. I tell all my clients (and anyone else who will listen) never to sell their mineral interests. There are a number of reasons why: About 99.9% of the…
When it comes to U.S. energy policy, federal government regulations unquestionably limit competition and innovation, and the people who suffer for it are the consumers and taxpayers. While the availability of new and abundant energy sources, such as natural gas, has caused a shift in the energy industry from coal…
Texas mineral owners contact me from time to time and ask why an oil company is drilling on their land when they haven’t signed an oil and gas lease. The answer to these questions lies in the Texas law regarding co-tenants. An interesting opinion was recently issued in the case…
The staff of the Texas Railroad Commission is proposing amendments to the pipeline safety rules for oil and gas and other pipelines in Texas. These amendments will affect rules 18.1, 18.4 and 18.11. The amendments remove a reference to “intrastate” pipelines to make clear that the Commission now has safety…
Given the increase in production of natural gas in Texas, some residents end up living close to a gas compressor stations. These stations are necessary to pump natural gas under pressure over long distances, but they can be large, noisy and produce offensive odors. Some Texans who live close to…