Case Law Update

The in-house attorney and in-house landman’s home for commentary, insight, and analysis of case law affecting upstream oil and gas.

17Apr
Railroad Deed Controversy: 100+ Year Old Instrument Ruled an Easement, Not a Fee Simple Conveyance

Railroad Deed Controversy: 100+ Year Old Instrument Ruled an Easement, Not a Fee Simple Conveyance

 

BNSF Railway Co. v. Chevron Midcontinent, LP

This dispute arises from a deed executed in 1903 from W.H.C. Goode to BNSF’s predecessor covering land in Upton County, Texas.  When Chevron began producing from underneath BNSF’s railway tracks, BNSF sued for trespass of title, arguing that the 1903 deed conveyed fee simple title.  Chevron argues that BNSF acquired only an easement.  Thus, the issue before the Court was whether the parties to the 1903 deed intended to convey fee simple title or only an easement.  Although the deed contained the term “fee simple” in the habendum clause, the court ultimately decided the deed conveyed an easement because it contained terms throughout the deed that suggested the parties intended to convey only an easement.  Read More »

25Jan

Texas Court Holds that Permit of Injection Well May be Challenged Outside Railroad Commission and Travis County Via Injunctive Relief

Brief Overview: What You Need to Know

On January 18, 2017, in Ring Energy v. Trey Resources, Inc.,[1] Ring Energy v. Trey Resources, Inc., 2017 WL 192911(Tex. App.—El Paso January 18, 2017, no pet. h.).  the El Paso Court of Appeals, in a case of first impression, addressed whether a trial court outside of Travis County (where the Texas Railroad Commission (the “RRC”) is based) has jurisdiction to issue an injunction prohibiting a party with a valid RRC injection well permit from operating its injection well based on a complaining party’s claim that the injection would cause imminent and irreparable “waste,” even though the complaining party (1) had not yet sustained any actual injury, (2) did not oppose the permit prior to issuance, and (3) did not take advantage any other administrative remedy that might have been available. Read More »

Footnotes   [ + ]

18Jan

Denbury v. Texas Rice: Clarifying the Test for Common Carrier Status, Power of Eminent Domain

On Friday, January 6, 2017, the Texas Supreme Court issued its long-awaited opinion in Denbury Green Pipeline–Texas, LLC v. Texas Rice Land Partners, Ltd. (“Texas Rice II”), [1]15-0225, 2017 WL 65470 (Tex. Jan. 6, 2017). holding that:

  1. Denbury’s evidence of a post-construction transportation agreement with an unaffiliated customer was relevant to the “reasonable probability test,”
  2. rejecting a rule that the requisite intent must exist at the time the pipeline was contemplated,
  3. rejecting the appellate court’s “substantial public interest” test, and
  4. holding that Denbury had “conclusively” established its qualification as a common carrier with the power of eminent domain.

The opinion provides clarity as to the test previously set forth in Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline–Texas, LLC (“Texas Rice I”), [2]363 S.W.3d 192, 202 (Tex. 2012). and the types of evidence relevant to that determination.

Read More »

Footnotes   [ + ]

11Jan

10 Oil and Gas Cases to Watch in 2017

With the beginning of a new year, there are several oil cases pending in the Texas Supreme Court relevant to the oil and gas industry.  We’ll be following these cases throughout the year.  Sign up as a subscriber to oilandgaslawdigest.com to receive updates on these and other cases.

Here are ten cases that we will be watching:

Read More »

25Oct
Part II of the Latest Shot Fired in the Fixed Versus Floating Royalty Battle

Graham and Hysaw Analyzed in New Deed Interpretation Dispute out of San Antonio CoA

Earlier this year, we reported the San Antonio Court of Appeals decision in Dragon v. Harrell, a fixed versus floating royalty case.  Here, the court is again confronted with the same issue.  Relying on its decision in Graham v. Prochaska, the court explains why the estate misconception theory does not apply and explains how the interest in dispute is a fixed nonparticipating royalty interest.

Read More »

25Oct
Mystery Solved! 100+ Year Old Instrument Ruled to be a Mineral Deed

100+ Year-Old Title Dispute: Instrument Ruled a Mineral Deed, Not a Lease

Think your early chain of title has been cured by the passage of time?  As this recent case shows, even 100+ year-old instruments can be the subject of new disputes. The Tyler Court of Appeals, in Richardson v. Mills [1] Richardson v. Mills, 12-15-00170-CV, 2016 WL 5800261 (Tex. App.—Tyler Oct. 5, 2016, no. pet. h.)   recently reviewed whether a 100+ year-old instrument was a lease or a mineral deed, and the effect of a release entered approximately two years later.

Read More »

Footnotes   [ + ]

4Aug
Midstream Update: Eastland Court of Appeals Extends Denbury Test to Crude Petroleum Pipelines

Midstream Update: Eastland Court of Appeals Extends Denbury Test to Crude Petroleum Pipelines

This is a condemnation case from Comanche County, Texas.  In January 2013, the Railroad Commission of Texas designated BridgeTex as a common carrier and granted it a T-4 permit.  BridgeTex condemned an easement across Saner’s land and constructed a pipeline to transport crude petroleum from the Permian Basin to the Texas Gulf Coast.  Both the special commissioners and the trial court determined that the easement was for public use, and Saner now challenges the trial court’s finding.  The Eastland Court of Appeals affirmed the trial court’s judgment.  Read More »

19May

BREAKING: ConocoPhillips v. Koopmann

The Corpus Christi Court of Appeals released its Memorandum Opinion today in ConocoPhillips Company v. Koopman, 13-14-00402-CV. The case involved a deed which reserved a term NPRI for a period of fifteen years, or until December 27, 2011 and for “as long thereafter as there is production [of oil, gas, or minerals from the land] in paying quantities.”

The deed also included a savings clause that provided as follows:

[I]f any oil, gas, or mineral or mining lease covering [the Koopmanns’ land] is maintained in force and effect by payment of shut-in royalties or any other similar payments made to [the Koopmanns] in lieu of actual production while there is located on [the Koopmanns’ land] a well or mine capable of producing oil, gas, or other minerals in paying or commercial quantities but shut-in for lack of market or any other reason, then for purposes of determining [whether Strieber’s NPRI continues beyond December 27, 2011,] it will be considered that production in paying or commercial quantities is being obtained from the [Koopmanns’ land]. (emphasis supplied)

The lessee and NPRI owner claimed that these conditions were met and that a $24,000 lease extension fee constituted a “similar payment” to a shut-in royalty. The lessor burdened by the NPRI disagreed and suit was filed.  Among the issues addressed are:

  1. Whether a lease extension fee made under a paid-up lease constituted a payment that was “similar” to a shut-in royalty within the context of a savings clause contained within a deed reserving a term NPRI.
  2. Whether the term NPRI involved in that case created a future interest in violation of the rule against perpetuities.

Stay tuned over the next few days. We will be working through this case to provide our subscribers with a summary of the court’s holding…

25Apr
Part II of the Latest Shot Fired in the Fixed Versus Floating Royalty Battle

The Latest Shot Fired in the Fixed Versus Floating Royalty Battle

This is a deed interpretation case out ofthe San Antonio Court of Appeals, arisingfrom the 218th Judicial District Court of Karnes County, Texas.

In 1991, the Harrells executed a warranty deed (“1991 Deed”) that conveyed approximately 10 acres of land to the Dragons. The 1991 Deed was subject to prior reservations and it contained the following new reservation by the Harrells:

Read More »

25Sep
N.D. SUPREME COURT ON DUTY OWED BY FIELD LANDMEN AND COMPENSATION FOR LEASE ACQUISITION

N.D. SUPREME COURT ON DUTY OWED BY FIELD LANDMEN AND COMPENSATION FOR LEASE ACQUISITION

On September 21, 2015, the North Dakota Supreme Court issued its opinion in Border Res., LLC v. Irish Oil & Gas, Inc., — N.W.2d —-, 2015 WL 5519421, 2015 ND 238 (N.D. 2015), where it reviewed two primary issues:

(1) whether a field land services company owed a fiduciary duty to an oil and gas company, and whether such duty was breached, when the land services company acquired leases within the “review area” and did not offer those leases to the oil and gas company, and

(2) whether the price to be paid to the land services company for other leases sold by the oil and gas company in a package transaction was the “blended price” of the overall transaction, or an allocated value of the specific leases acquired by the land services company.

This case is likely of interest to in-house and field landmen, as it provides additional guidance as to the nature and scope of the relationship between an oil and gas company and field landmen.  Additionally, it provides insight into the extent the AAPL standards of ethics and conduct bind landmen, and the importance of clearly addressing parties’ relationship and payment structure in service agreements.

Read More »

© Copyright 2014, Austin W. Brister. All Rights Reserved. DISCLAIMER: The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.
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