Off-Lease Drilling Locations and Claims of Subsurface Trespass (Part Two)

In Lightning Oil Co. v. Anadarko E&P Onshore LLC, No. 04-14-00903-CV, 2015 Tex. App. LEXIS 8673 (Aug. 19, 2015), the San Antonio Court of Appeals concluded that a mineral estate owner was not entitled 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 decision addresses the issue of subsurface trespass, while an earlier decision, Lightning Oil Co. v. Anadarko E&P Onshore, No. 04-14-00152-CV, 2014 Tex. App. LEXIS 11844 (Oct. 29, 2014), discussed here, denied Lightning's application for injunctive relief. The dispute in Lightning Oil arose from Anadarko E&P Onshore's…
More

Ownership of Coalbed Methane Gas Linked to the Ownership of the Coal

In Kennedy v. Consol Energy Inc., 116 A.3d 626 (Pa. Super. Ct. 2015), Earl Kennedy and other interest holders (the "Kennedys") brought an action to quiet title to coalbed methane gas and for trespass and conversion against the owner and operator of the coal, Consol Energy Inc. and CNX Gas Co. ("Consol"). The first issue involved the ownership rights to coalbed methane gas.[1] The Kennedys owned the gas rights under a 790-acre tract of land, and contended that such rights also included the rights to the coalbed methane gas. Consol owned the Pittsburgh or River coal seam and had been drilling wells…
More

Top Leases Can Survive the Rule Against Perpetuities

In BP Am. Prod. Co. v. Laddex, Ltd., 07-13-00392-CV, 458 S.W.3d 683, Tex. App. LEXIS 1521 (February 17, 2015), the Amarillo Court of Appeals upheld the validity of a top lease and remanded the case to determine whether there was a cessation of production in paying quantities which potentially terminated the underlying lease. In Laddex, the lessors executed a lease on January 13, 1971 ("Arrington Lease"), which was eventually assigned to BP. Id. at 684. The Arrington Lease provided for a primary term of five years and so long thereafter as oil or gas is produced from the land. Id. The Mahler D-2 Well…
More