How Safe is Your Harbor? Suspense of Production Payments in the Wake of 1776 Energy Partners, LLC v. Freeport-McMoran Oil & Gas LLC

May 4, 2022 — In 1776 Energy Partners, LLC v. Freeport-McMoran Oil & Gas LLC, the Court of Appeals of San Antonio examined whether production payments under various joint operating agreements were properly held in suspense without interest under the “safe harbor” provisions of Texas Natural Resources Code Section 91.402(b) (a/k/a the “Texas Suspense Statute”).[1]  Specifically, it examined whether creation of a constructive trust pursuant to a judgment amounted to “a dispute concerning title that would affect distribution of payments” pursuant to Section 91.402(b)(1)(A).  For the reasons discussed below, the Court found that as a matter of law, creating a…

Kiefaber & Oliva LLP Expands With New Oklahoma City, OK Office

HOUSTON, TX. April 19, 2022 Kiefaber & Oliva LLP is pleased to announce the opening of a third office in Oklahoma City. With attorneys licensed in 13 states, Kiefaber & Oliva serves companies active in the oil and gas industry nationwide. The firm advises a wide range of clients, including Fortune 500, integrated oil and gas companies, private equity backed companies, and mineral acquisition companies, from existing offices in Houston, TX, and Columbus, OH. “Our strength comes from a deeply held belief in providing exceptional legal services to our clients. This additional location expands the firm's ability to support client…

“Subject to” Interpretation: Conveying Reversionary Rights and the Pauler Decision

April 1, 2022 —In the Texas case of Pauler v. M & L Minerals, LP,[1] the San Antonio Court of Appeals was tasked with interpreting a mineral deed to determine whether certain disputed royalty interests had been conveyed or excepted.  Under particular scrutiny was the effect of the deed’s “subject to” language on these previously conveyed interests.  In reversing the trial court’s judgment, the Court of Appeals held that the language in the deed conveyed all of the grantor’s interests in the property to the grantees.[2]  This included all of the grantors’ royalties and reversionary rights (other than a specific…