The recent Court of Appeals case of Lackey v. Templeton, 2018 WL 3384570 (Tex. Civ.App. — Beaumont, no pet.), provides another illustration of the legal principle that, in Texas, if you are challenging who owns certain real property, you MUST bring a trespass-to-try-title claim. No other cause of action — such…
Articles Posted in Oil and Gas Law
Bankruptcy Law and Texas Oil & Gas Leases: Be Careful With “Consideration Paid” Clauses
A recent decision handed down by the U.S. Fifth Circuit of Appeals makes it clear that great care should be taken with how the consideration clause of Texas oil and gas leases are drafted. The case of In the Matter of: Goodrich Petroleum Corporation, 894 F3d 192 (5th Cir.) illustrates…
Oral Modifications to An Oil and Gas Agreement Not Barred By the Statute of Frauds
A Texarkana Court of Appeals case, Petrohawk Properties, L.P. v. Jones offers some insight into how changes to an oil and gas agreement are analyzed in terms of the statute of frauds. Material changes to the agreement require documentation in writing, but what constitutes a material change to the initial…
Land Descriptions Ambiguities Can Create Serious Problems in Oil and Gas Options
When preparing and executing any type of contract, it is important to be clear on all important terms in the contract. Ambiguities lead to uncertainty, and uncertainty can turn into disputes down the road. Even so, there are times when an oil company has been known to claim an ambiguity,…
The Impact of Regulation on Texas Oil and Gas Production
The oil and gas production industry operates in a tough position. On the one hand, oil and gas production are critical economic drivers in the United States. Oil and gas generates hundreds of thousands of jobs and contributes 8% of the U.S. Gross Domestic Product, according to the American Petroleum…
Interpreting Texas Wills: “Farm Lands and Pasture Lands” Includes the Mineral Estate
In 1924, Cora McCrabb (along with two co-owners) owned 1,448.50 acres of farm and pasture land. In that same year, Cora executed her Last Will and Testament, bequeathing all of her “farm lands and pasture lands” equally to her three grandchildren, Jessie, J.F., and Mary Lee McCrabb. Cora gave the…
Executive Rights Owner’s Duty in Texas
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…
Can You Terminate a Producing Oil and Gas Lease in Texas?
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…
Texas Court Addresses Damages When Plugging of an Oil Well Fails
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…
Texas Law: The Fine Line Between Fixed Royalty Interest and Floating Royalty Interest
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…