The Texas Supreme Court, in Chesapeake Exploration, L.L.C. v. Hyder, No. 14-0302, 2015 Tex. LEXIS 554 (June 12, 2015), addressed the issue of allocation of post-production costs and whether, based on a certain lease royalty provision, an overriding royalty must bear its share of post-production costs. The dispute in Hyder centered on the interpretation of a lease royalty provision.  Chesapeake Exploration, L.L.C. (“Chesapeake”), as lessee, acquired an interest in 948 mineral acres in the Barnett Shale previously leased by the Hyder family.  Id., at *2-3.  The Hyder family had previously executed a lease with the original lessee containing three royalty…

In Envtl. Processing Sys., L.C. v. FPL Farming Ltd., No. 12-0905, 2015 Tex. LEXIS 113 (Feb. 6, 2015), the Supreme Court of Texas concluded that lack of consent is a required element of common law trespass, but declined to address whether subsurface wastewater migration is actionable as a common law trespass in Texas. The dispute in Envtl. Processing Sys., L.C. v. FPL Farming Ltd. arose between FPL Farming Ltd. (“FPL Farming”), who owned a rice farm in Liberty County, Texas, and Environment Processing Systems (“EPS”), who leased an adjacent tract of land upon which it constructed and operated a wastewater…

The Texas Supreme Court, in KCM Fin., LLC v. Bradshaw, No. 13-0199, 2015 Tex. LEXIS 220 (March 6, 2015), addressed the nature of the duty owed by the executive to the nonparticpating royalty owners or non-executive mineral interest owners and under what circumstances the executive has fulfilled its duty.  The Court described the duty owed by an executive as a duty of “utmost good faith and fair dealing,” but refused to create a bright line rule outlining the nature or boundaries of the executive’s duty.  Id., at *3-4. The dispute in Bradshaw centered on the obligation of the executive to…

In Landover Prod. Co., LLC v. Endeavor Energy Res., L.P., No. 11-13-00132-CV, 2014 Tex. App. LEXIS 11990 (October 31, 2014), the Eastland Court of Appeals applied the implied temporary cessation of production doctrine to preserve a lease in its secondary term because the lease did not have an explicit savings clause that applied to the secondary term of the lease. The Defendants (collectively “Endeavor”) owned the working interest under an 80-acre oil and gas lease.  Id., at *1.  The primary term of the lease had expired, but the lease continued to operate under the secondary term because there was production…

In Lightning Oil Co. v. Anadarko E&P Onshore, No. 04-14-00152-CV, 2014 Tex. App. LEXIS 11844 (Oct. 29, 2014), the San Antonio Court of Appeals concluded that a mineral estate owner was not entitled to injunctive relief to prevent an adjacent mineral estate owner from drilling horizontal wells crossing through the other party’s mineral estate to access the adjacent mineral estate.  This case is significant for operators that drill multiple horizontal wells from a single pad location and for operators that drill horizontal wells from off-lease surface locations. The dispute in Lightning Oil arose from Anadarko E&P Onshore’s (“Anadarko”) attempt to…

December 29, 2020 — In 2011, the AAPL began the process of updating the 610-1989 Model Form to incorporate the new norms that have emerged with the expanded use of horizontal drilling techniques.  In 2013, the AAPL Task Force released the 610-1989 Horizontal Modification Form, which was intended to serve as a temporary solution to address horizontal drilling issues while the Task Force worked to produce a fully updated model form.  Finally, in 2016 after a bit of a delay, the AAPL Task Force released the Form 610-2015 JOA.  The new 2015 form incorporates the changes that were made in the…

December 29, 2020 — In Martin v. Rosetta Res. Operating, LP, 2020 Tex. App. LEXIS 7952, 2020 WL 5887566, the Texas Thirteenth Court of Appeals held that a lessee’s obligation to protect undrilled acreage from drainage and to spud an offset well were triggered by the plain terms of the lease. The Martin court construed an “unambiguous” mineral lease as a matter of law, and noted that it must enforce the intention of the parties as expressed in the four corners of the lease. In its written decision, the court challenged the parties’ construction of a lessee’s obligations in a…

Explore common matters related to roadway and mineral ownership, gain historical context and obtain practical guidelines on how to proceed when faced with roadway leasing obstacles. Authored by Kiefaber & Oliva LLP partner Brad Gibbs, this article was recently featured in the Section Report of the Oil, Gas and Energy Resources Law Section of the State Bar of Texas. [Download the article]