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In 2015, Enterprise Product Partners announced plans for a new pipeline that will run over 400 miles from Midland, Texas to Sealy, Texas. The yet-to-be-named pipeline will originate at Enterprise Product Partners’ trading and storage hub in Midland and will connect with the eighty mile Rancho II pipeline in Sealy. The Rancho II pipeline came on line in 2015 and will connect Sealy with the storage hub, the Enterprise Crude Houston Oil (“ECHO”) terminal, located in the southeast of Houston, Texas. The ECHO terminal was developed by Enterprise Product Partners in 2010 and functions as a central storage and distribution hub. The connection to ECHO will allow Enterprise Product Partners to access the Gulf of Mexico via Texas City. Enterprise is planning on continuing to take advantage of a recently passed exception to the 1970’s crude export ban by offering approved processed condensate at the Gulf. Currently Enterprise Product Partners is one of the most active condensate exporters in the region.figure1_148

The unnamed pipeline will have a capacity of 540 million barrels per day and is expected to come on line in the second quarter of 2017. The new pipeline will be capable of segregated transport and used to transport four different grades of crude: West Texas Sour, West Texas Intermediate, Light West Texas Intermediate, and condensate. The pipeline will be fed by both tanker trucks and pipelines that currently terminate at the Midland Hub. A map of the currently proposed pipeline which was presented in an Enterprise Product Partners presentation is shown to the right.

If you live in one of the counties through which this pipeline will be installed, you may be getting a call from a land man representing Enterprise. Keep in mind that there are many legal and safety issues involved in having a pipeline installed across your property. In addition, there is no such thing as a “standard pipeline easement form”despite what the land man may tell you. You and your property are best served by seeking the input of an experienced Texas oil and gas pipeline attorney to assist you in evaluating the easement offer and in getting just compensation for the easement.















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There has been an ongoing debate about whether hydraulic fracturing activities for producing oil and gas have an impact on drinking water supplies near and around the fracing site. Recently, the United States Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) raised a number of questions concerning the EPA’s June 2015 draft report on the potential impacts of hydraulic fracing on drinking water supplies.

The SAB prepared a 180-page peer-review report that you can read here addressing the EPA’s 2015 draft report. The SAB found a number of aspects of the EPA’s draft report to be critically deficient. Below is an overview of some of the the SAB’s report’s findings. In particular, the SAB noted that:

  • The EPA’s conclusions drawn about the widespread and systemic impacts that fracing has on the quality of drinking water resources were not quantitatively supported and lacked evidence.
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As the Texas Supreme Court noted recently, it is the responsibility of mineral owners to review their deeds carefully to ensure that the rights and reservations in the deed are what they intend and that there are no mistakes. Specifically, in Cosgrove v. Cade, the Court held that “Plainly obvious and material omissions in an unambiguous deed charge the parties to the deed with irrebuttable notice (of any errors) for statute of limitations purposes”. As a result, the “discovery rule” does not apply to a suit to reform the deed according to both Texas common law and the Texas recording statute.

In 2006, the Cades sold two acres of land to Barbara Cosgrove. The real estate contract provided for the reservation of all of the mineral rights to the Cades. However, the deed conveyed the land in fee simple, meaning all the land and rights incidental to ownership of the land, including mineral rights, were conveyed to the buyer. At closing of the transaction, the parties signed a document in which they agreed to correct or adjust any errors or omissions in any documents.

In 2010 the Cades realized that the deed conveyed their mineral rights to Ms. Cosgrove. The Cades filed a lawsuit to reform the deed and for breach of contract.

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Fracing, or hydrofracturing, is a natural gas extraction technique by which a liquid solution (primarily made up of water) is pumped into the ground at high pressures to fracture rock formations. Fracturing the rock releases gas that is trapped inside the rock formation. The geological areas where natural gas is found, and thus where a majority of fracing occurs, is in shale.

By the way, folks in the oil and gas industry call it “fracing”. The mainstream media somehow started adding a “k”, but the correct term is still “fracing” (i.e., there is no “k” in hydraulic fracturing)

Fracing is actually an old technique and has been used for many decades. Once fracing was combined with horizontal drilling, however, oil and gas companies found they could extract far more natural gas, more efficiently, than before.

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There has been a new development in Texas law regarding notary seals and this development affects any document in Texas that has to be notarized. This includes deeds, wills, trusts, oil and gas leases and many other kinds of documents. In fact, any document that must be filed in the deed records is required to be notarized.

Earlier this year, Texas House Bill 1683 went into effect and required the Texas Secretary of State to assign a notary identification number for all notaries and required notaries’ seals to include that number. Unfortunately, the statute was unclear on whether the law only applied to notaries who were commissioned or recommissioned after January 1, 2016 or to all notaries. The Secretary of State took the position that the law only applied to notaries who were commissioned or recommissioned on or after January 1, 2016, and that existing notaries did not have to get new seals under the new rules but would have to obtain a new seal that is compliance with the new rules once their current commission expires. This meant that under the law some notaries would have seals that include their notary identification number while others would not until their commission expired and they request renewal of their commission.

There is case law in Texas that suggests that a notary seal that is not in compliance with the notary seal rules is not a valid seal, and that an invalid seal when contested or challenged is considered to be no seal at all. This could raise serious legal issues concerning wills, trusts, oil and gas leases and any real estate document where the notary used a seal without their identification number on it.

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Occasionally, a Texas landowner will own a piece of property that lacks access, or sufficient access, to a public road. Usually, the first thing the landowner should do is to negotiate with an adjoining landowner to see if the adjoining landowner will agree to an easement of some kind. However, on some occasions, the landowner finds themselves at the mercy of difficult or recalcitrant adjoining landowners or is simply unable to reach an agreement with adjoining landowners and is unable to obtain any kind of access easement. In that situation, one of the only options is to file suit and request that a court declare an “easement by necessity”.

In the case of the Staley Family Partnership Ltd. v. Stiles, the Texas Supreme Court reiterated an important requirement for this kind of easement.

This case involved three tracts of land that were originally part of a single land grant in Collin County, Texas from the State of Texas to Thompson Helms in 1853. In 1866, the land was separated into three portions by a Texas probate court:

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A rather depressing milestone was announced this week. The number of oil well drilling rigs in the United States has reached its lowest count since records began to be kept in the 1940s.

Drilling rig counts have been by Baker Hughes, Inc. for many decades and are announced weekly. The count for the week ending March 11, 2016 was 480 drilling rigs. One commentator stated that there was not a consistent series of rig counts before 1948, but thought that to find a lower count, we would have to go back to the 1860s. The declining rig count is just one more effect of the fall in oil prices from $100 per barrel and more during the summer of 2014 to current levels of nearly $30 per barrel.

Drilling_the_Bakken_formation_in_the_Williston_BasinThe numbers hide the human cost behind the numbers. Each drilling rig has its own crew of very specialized workers. In many cases, the crews have worked together for many years. Watching an experienced crew operate a drilling rig is like watching a very special kind of ballet. I’ve seen some drilling crews in which very little verbal communication is exchanged. Instead, each member of the crew seems to know just when to do their part without instruction from the crew chief.

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Over the years I have negotiated many leases for mineral owners in the Texas Permian basin and the Eagle Ford Shale. Historically, production in these two areas has set records. These two shale plays, together with the Bakken, the Haynesville, the Marcellus, the Niobrara and the Utica represent 95% of all United States well and gas production increases from 2011 through 2013. The adjacent map shows the location of these areas.

dpmapv4l-wtitleHowever, the United States Energy Information Administration (the “EIA”), in its most recent Drilling Productivity Report, projects a substantial decline in production for the Permian basin and the Eagle Ford Shale. Specifically, the EIA predicts a 58,000 barrel per day decline in April 2016 for the Eagle Ford and a 4000 barrel per day decline in the Permian basin wells.Apr 2015 EIA DPR Permian
Aor 2015 EIA DPR Eagle FordThis decrease in production, together with the substantial decline in oil and gas prices over the last year, hits mineral and royalty owners hard. Many mineral and royalty owners are retired and their royalty income supplements Social Security payments. In many cases, they won’t have any source of substitute income.

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The National Society of Professional Surveyors (NSPS) and the American Land Title Association (ALTA) recently issued new minimum standards for surveys that you can access here. The NSPS and ALTA each officially adopted these new standards in 2015, and they become effective on February 23, 2016.

Some notable changes include:

● The American Congress on Surveying and Mapping (ACSM) is now to be known as the National Society of Professional Surveyors.

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The Foreign Investment in Real Property Tax Act was amended recently, with changes going into effect on February 17, 2016. Previously, when a foreign person or entity sold real property in the United States, the buyer was required to withhold 10% of the gross sales price. Beginning February 17, 2016, the amount required to be withheld increases to 15%. Under 26 CFR 1.1461 and 26 CFR 1.1445-6, if a buyer is required to withhold the tax from the seller and fails to do so, the buyer becomes responsible for the tax and any interest that accrues between the time the tax was due and when the buyer actually pays the tax. However, if the buyer obtains a withholding certificate from the Internal Revenue Service (IRS) that eliminates the withholding requirement and the seller fails to pay the tax, the buyer is not responsible for the tax. Either the buyer or the seller can apply for a withholding certificate.

Under the new requirements (that can be accessed here):

● If the sales price of the real property is less than $300,000 and the buyer intends to use the property as a residence, then no withholding is required.