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Texas oil and gas companies can engage in a variety of procedures as part of their exploratory process before they drill an oil and gas well. One such procedure is seismic testing or a seismic survey. Seismic testing is a process that results in an image of the subsurface of property. The kind of seismic testing done most often in Texas uses a “thumper truck” which contains a large plate in the center of the truck that is thumped on the ground. The shock waves emanating from the thumping result in data that can be collected digitally and result in a map of the subsurface. Seismic testing can also be done by drilling shot holes into the ground, placing dynamite into the holes and then covering the holes over. When the dynamite is set off, the sound waves from the explosions generate data that, when collected, result in a map of the subsurface.

If you own the surface and the minerals, and you have not executed an oil and gas lease for the minerals, you do not have to allow seismic testing. However, if you sign an oil and gas lease, or if you don’t own the minerals and the mineral owner has signed an oil and gas lease, many leases allow for seismic testing. Of course, if you own the minerals and are signing an oil and gas lease, it may be important to limit or eliminate any right by the lessee to do seismic testing when you are negotiating the terms of that lease.

If a seismic test is going to be performed, it’s important to educate yourself about the test. Don’t sign the permit the testing company gives you. Instead, negotiate a permit that provides protections for the property. Things to consider include (but aren’t limited to):

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In a case last year before the Texas Supreme Court, BPX Operating Co. v. Strickhausen, 629 S. W. 3d. 189 (Tex. 2021), the Court addressed whether the acceptance of royalty checks by a lessor constituted a ratification of the oil company’s pooling of the leased premises in violation of the anti-pooling clause in the lease.

Margaret Ann Strickhausen signed and oil and gas lease with BPX Operating that specifically prohibited pooling without the express written consent of the lessor. BPX sent her a ratification of pooling which she refused to sign. BPX pooled her property anyway. BPX continued to send her royalty checks, totaling over $700,000, which she deposited. BPX claimed that Ms. Strickhausen had therefore impliedly ratified the pooling of her property.

The Supreme Court stated: “Ratification is the adoption or confirmation by a person with knowledge of all material facts of a prior acts which then did not legally bind him and which he had the right to repudiate”.  In this case, there were a number of objective facts which indicated that Ms. Strickhausen did not agree with or consent to the pooling and that she accepted the royalty checks believing that these were the royalties she was entitled to without the pooling taking place. The Court further stated that “ratification is not a game of ‘gotcha’ ” and ruled that the lessor’s acceptance of royalty checks under these circumstances was not a ratification of the pooling by the BPX.

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I get complaints weekly from Texas homeowners who have problems with the solar panels they have had installed on their roof or with the company that installed the panels.

Of course, there are good companies that install solar panel systems. There are also a number of others that are not honest and that you would not want to deal with. Here are some thoughts about how to approach a potential solar panel installation contract for your home that may help you avoid the bad guys:

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  1. First, please go online and educate yourself about the problems with solar panels. One article that discussed some of the issues can be found here.
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The Texas Supreme Court recently issued its long-awaited opinion in Terrance J. Hlavinka et al v. HSC Pipeline Partnership, LLC, —S.W.3d— (Tex. May 27, 2022). There were two important issues in this case: (1) whether a pipeline company transporting polymer-grade propylene can be a common carrier with condemnation authority under Texas Business Organizations Code Section 2.105 and (2) whether a property owner may testify during condemnation proceedings about recent arms’-length transactions with other pipeline companies as evidence of the current highest and best use of the property in determining the market value of the new easement.

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The Court held that Section 2.105 does grant condemnation authority and that polymer-grade propylene is a qualifying product under that section. That makes sense since propylene is a petroleum by-product. The Court also held that one of the conditions for eminent domain, that the pipeline will be a common carrier for public use, is a legal question for a court to decide, and is not a fact question for the jury.

Finally, the Court held that “a property owner may testify to arms’-length sales of easements to other pipeline companies as evidence of the condemned property’s highest and best use”. (The trial court had excluded this evidence).

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The American Society of Farm Managers and Rural Appraisers recently published its “Texas Rural Land Value Trends” for 2021. According to its website “Chapter members from all the regions of Texas provide data to develop the annual market study.” The study is a good source for current land values, leasing rates and even hunting lease rates. You can download a copy of the study without charge at the ASFMRA website.

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The Texas Supreme Court recently decided a case involving a covenant to protect against drainage. In Rosetta Resources Operating, LP v. Martin, the Court considered several issues, one of which was whether the covenant had been triggered by language in the addendum to the oil and gas lease.

Rosetta and two other companies drilled a well on property that was near but not adjacent to the pooled unit that contained a portion of the Martin’s property. The Martins sued, based on language in the addendum, claiming Rosetta and another oil company failed to protect them from drainage by the nearby well. The Court held that the covenant in the addendum was subject to competing reasonable interpretations as to when the covenant was triggered and reinstated the trial court’s ruling denying relief to the Martins for violation of the covenant.

All of this underscores how important clear and unequivocal language in the oil and gas lease is.

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There are no doubt a number of honest and reputable companies installing residential solar systems in Texas. However, based on the number of folks who call me each month about problems with the company they dealt with, there are a certain number of dishonest and disreputable companies as well.

Residential solar systems are incredibly expensive, often costing between $25,000 and $35,000. Before you spend or finance this kind of money, there are a number of things you can do to make sure you’re dealing with one of the good guys:

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  • Check out the company’s rating and complaint history at the Better Business Bureau website. In each case where I’ve handled a complaint for a client against a solar system company, that company had numerous complaints listed on the BBB website.
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You can’t watch a newscast these days without seeing a Senator or Congressman or some other talking head insist that the actions of the current Administration in curtailing domestic oil and gas production and pipelines were unwise and that oil and gas production must be restarted immediately.

The posture of the current President towards domestic oil and gas production has certainly been irrational, to say the least. In attempting to appease the far left of the Democratic Party, Biden has not only crippled energy production, he has created devastating inflation and a critically dangerous national security situation. Oil and gas is not just essential for transportation, it is a component of many of the products we use on a daily basis. In addition, people may not realize that natural gas is essential for creating fertilizer. American farmers have begun publicly warning of food shortages beginning this summer and fall because of the inability to obtain fertilizer. Since Biden is doing this while importing Russian oil and refusing to ban the import of Russian oil as a sanction for the Russian invasion of Ukraine, one might logically ask just who side he is on?

The problem is that even if Biden woke up tomorrow and removed all the impediments to domestic oil and gas production, there is no switch that gets thrown which results in sudden production. Instead, there is a substantial lead time to bring wells back online and into production. Drilling new wells, especially horizontal wells, takes time. More importantly, domestic oil and gas producers don’t trust the dementia-fueled irrationality of Biden and his advisors. They are not going to incur the considerable expense of drilling new wells, much less bringing existing wells back online, until there is someone with a logical and coherent and rational energy policy in the White House. Finally, even if and gas wells were to be allowed to be restarted and new wells could be drilled, we do not have sufficient pipeline capacity to get the oil and gas to refineries.

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In a recent case decided by the Eastland Court of Appeals in Texas, Foote v. Texcel Exploration, Inc., the Court held that the operator of an oil well was not liable for cows apparently killed by an oil and salt water spill.

The Plaintiff leased property for grazing 650 head of cattle. Texcel Exploration Inc. operated an oil and gas lease on the property. The lease did not require Texcel to fence off the well and associated equipment, however Texcel had installed an electric fence around the tank battery (where produced oil and gas and salt water produced along with the oil and gas were stored). There was evidence that the cattle were breaking the fence each day and getting inside the fenced area and ultimately broke a PVC pipe on one of the tanks. Salt water and oil was found on the cows and eventually 132 cows died. The Plaintiff requested reimbursement for the value of the 132 dead cows, veterinary bills, special feed costs, shipping cost to relocate cattle, and lost profits from the surviving cattle being sold under expected weight.

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The Court first sets out what is pretty well settled law in Texas for this situation: “[T]he owner/lessee of the surface estate in order to recover against the mineral lessee or operator for injury to his cattle must plead, prove and obtain a jury finding on one of the following:

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The Texas Supreme Court recently issued its decision in Nettye Engler Energy L.P. v. BluStone Natural Resources II, LLC, Cause No. 20-0639, which has added to the Texas jurisprudence on the frequently litigated subject of post-production costs that can be deducted from a royalty interest.

The deed that conveyed the mineral interest to the grantee reserved a nonparticipating royalty interest “in kind,” which as the Court notes, differs from the standard monetary royalty because the grantor retained ownership of a fractional share of all minerals in place. The deed required delivery

of the grantor’s fractional share “free of cost in the pipe line, if any, otherwise free of cost at the mouth of the well or mine”.  The question became which pipeline does the deed refer to: the gathering lines or the interstate transportation line?

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