Oil and gas price volatility has always been an inescapable element of the energy business. That said, the current confluence of events is unprecedented and would have been hard to predict. On March 6, 2020 when the COVID-19 crisis was slowly making its way into the domestic news cycle, a long simmering conflict between Saudi Arabia and Russia over production levels came to a head with Russia’s refusal to continue abiding with OPEC guidance for agreed production level reductions. Saudi Arabia’s subsequent decisions to dramatically increase production levels and discount oil pricing were met with tit-for-tat responses by Russia and other market participants over the next 2 days, sparking sharp increases in supply and reductions in market prices of as much as 30% on March 8. Then the true magnitude of the COVID-19 pandemic and its impact on the world economy and energy demand came to the fore. Subsequently, oil prices plummeted with WTI dipping into negative values in late April. As of this writing, prices have improved somewhat; however, IEA guidance sees global oil demand in a freefall due to the government actions to combat the COVID-19 contagion.

Due perhaps to geologic serendipity, Texas has a long and extensive history of oil and gas exploration and production. Consequently, much of Texas’ lands have experienced severance of mineral from surface estate and resulting complications of concurrent occupancy by parties whose interests are not always fully aligned. In Texas, the owner of a severed mineral interest (and its mineral lessee) generally enjoy an implied right to enter upon the surface and to use the surface estate for the purpose of exploring, drilling, producing, transporting, and marketing the minerals. The Texas Supreme Court has described this implied right as “a well established doctrine from the earliest days of the common law.” The underlying rational is that a grant, lease, or reservation of minerals would be worthless if the grantee, reserver, or lessee did not have access to and use of the surface estate.