Reliance on Oral Representations Not Justified

In Evans Resources, L.P. v. Diamondback E&P, LLC, 725 S.W.3d 718, 726 (Tex. Civ. App. Eastland 2025, no pet.), the Eastland Court of Appeals heard a case in which one of the claims by the landowners was that the Defendant, Diamondback E&P LLC, had verbally represented that it would drill horizontal wells from four specific locations. Instead, Diamondback drilled three vertical wells and the landowners sued.

The lease between the parties stated that additional wells and their locations were up to the lessee’s discretion. Relying on a recent Texas Supreme Court case, Roxo Energy Co., LLC v. Baxsto, LLC, 713 S.W.3d 404 (Tex. 2025), the Court of Appeals held that reliance upon oral representations which were directly contradicted by express, unambiguous terms of the lease agreement is not justified as a matter of law, and so there was no fraud by Diamondback.