News & Analysis as of

Oil & Gas Breach of Contract TX Supreme Court

McGinnis Lochridge

When Force Majeure Isn't Enough: The Causation Trap That Cost Kinder Morgan $100 Million

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In case you somehow forgot, the 2021 Valentines Day storm coined “Snovid,” “Snowmageddon,” or officially labeled Winter Storm Uri, blanketed Texas in snow and ice, even bringing snowfall to Galveston Beach. As temperatures...more

Gray Reed

Two Words = Six Million Dollars: SCOTX Reverses Trial Court That Added Words to a Gas Transportation Agreement

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In American Midstream (Alabama Intrastate), LLC v. Rainbow Energy Marketing Corporation, the Texas Supreme Court held that the trial court improperly inserted the words “scheduled” and “physical” into a contract. By...more

McGinnis Lochridge

Texas Supreme Court Clarifies Limits of Shut-In Payment Notations in Lease Disputes

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In this case (Scout Energy Mgmt., LLC v. Taylor Properties, No. 23-1014, 2024 WL 5249490 [Tex. Dec. 31, 2024]), the Texas Supreme Court held that vague notations on shut-in royalty check receipts cannot modify an unambiguous...more

McGinnis Lochridge

Tackling Free-Use and At-The-Well Royalties

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This lease royalty case involved a dispute over whether the lessee was permitted to deduct volumes of gas used off the premises to power post-production activities on other gas produced from the same well. Carl v. Hilcorp...more

Gray Reed

Texas Supreme Court Allows Enforcement of a JOA Debt After Foreclosure

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In Steelhead Midstream Partners, LLC v. CL III Funding Holding Company, LLC, the Texas Supreme Court authorized a pipeline owner’s breach-of-contract claim—alleging a co-owner used foreclosure to avoid cost-sharing...more

Gray Reed

Long-Running Texas Boundary Dispute Continues

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Ellison v. Three Rivers Acquisition LLC et al., on remand from the Texas Supreme Court, is the third round of a boundary dispute between mineral lessees in Irion County.   For the history of Ms. Ellison’s odyssey from...more

Gray Reed

Supreme Court Introduces Totality of the Circumstances Test for Implied Ratification

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“Ratification is not a game of ‘gotcha’”, said the Texas Supreme Court in BPX Operating Co. v. Strickhausen.  The Court, in a 5-4 opinion, addressed the standard for an oil and gas lessor’s implied ratification of an...more

Gray Reed

“No Obligation” Clause Dooms Oil and Gas Asset Bid

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In Chalker Energy Partners III LLC v. LeNorman Operating LLC, the Texas Supreme Court reaffirmed its belief in the sanctity of the written contract and the freedom of parties to negotiate and agree to contracts as they...more

A&O Shearman

First No Contract by Ambush. Now No Contract by Email, Texas Supreme Court Says.

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On February 28, 2020, the Texas Supreme Court reversed a ruling from the First Court of Appeals in Houston in the case of Chalker Energy Partners III, LLC, et al. v. Le Norman Operating LLC, 547 S.W.3d 27 (Tex. App.—Houston,...more

Gray Reed

Industry Custom Does Not Supersede Contract Language

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In Barrow-Shaver Resources Company v. Carrizo Oil & Gas, Inc the Supreme Court of Texas has held again, here in a consent-to-assign dispute, that a contract means what the words say, even if in negotiations a landman said...more

Gray Reed

Oil Field Technology … and a Texas Bill Aimed at Royalty Owners

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Welcome to today’s grab-bag of unrelated topics. The climate avengers are clever in the way they demonize the industry. They give zero credit for technological advancement. Truth is, the industry’s use of technology is...more

King & Spalding

Disclaiming Reliance in Texas Requires Specificity

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The Supreme Court of Texas in its recent IBM decision provided further clarity to what contracting parties must say in their contracts to disclaim fraudulent inducement claims. Int’l Bus. Mach. Corp. v. Lufkin Indus., LLC,...more

Mitchell, Williams, Selig, Gates & Woodyard,...

Oil and Gas Lease: Texas Supreme Court Addresses Offset Provision

The Texas Supreme Court (“Court”) recently ruled in favor of Murphy Exploration & Production Company—USA (“Murphy”) in a dispute arising from the location of an offset well on the properties of Shirley Mae Herbst Adams and...more

Gray Reed

NPRI Reservation Survives Rule Against Perpetuities

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Recall the Battle of the Bastards: The heroic Lady Sansa and the duplicitous Lord Baelish gallop over the hill to save the foolish Jon Snow from the heinous Ramsey Bolton. In similar fashion, but without the malnourished...more

Gray Reed

Option Contract Ruling Reversed by Texas Supreme Court.

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North Shore Energy v. Harkins interpreted an Option Agreement between landowners and a producer over a 400 acre tract. In football they would say the Texas Supreme Court pancaked the plaintiff. In the law, some would call it...more

Gray Reed

A Development in Trade-Secret Cases

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The big trade-secret case, Southwestern Energy v. Berry-Helfand, has been worked over by the Texas Supreme Court. Highlights: - Lack of certainty in damages does not preclude recovery. - A “Flexible and...more

Orrick - Trade Secrets Group

Practical Tips: Keeping Trade Secrets Safe During Litigation – Texas Supreme Court Edition

Recently, the Texas Supreme Court provided its first opinion interpreting the Texas Uniform Trade Secrets Act in a case involving an issue that often causes discomfort to lawyers on both sides of the “v” in trade secret...more

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