News & Analysis as of

Oil & Gas Mineral Leases

Gray Reed

Texas Royalty Owner Bears Postproduction Costs on Gas Sold at the Wellhead

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City of Crowley v. TotalEnergies E&P USA, is a post-production cost (PPC) case with a predictable result. The Fort Worth Court of Appeals confirmed its reasoning in Shirlaine W. Props. Ltd. v. Jamestown Res., L.L.C from 2021,...more

BakerHostetler

Pore Space Update: Texas Joins the Majority American Rule, but Accommodation Issues Remain at Play

BakerHostetler on

Texas is the latest in a growing number of states to tackle the issues related to ownership and severability of the pore space underneath land as carbon capture and sequestration (CCS) remains a relevant tool in CO2...more

Steptoe & Johnson PLLC

Is (Produced) Water… Water? The Texas Supreme Court’s Ruling on the Rights of Produced Water

Steptoe & Johnson PLLC on

On June 27, the Supreme Court of Texas issued its long-awaited ruling in Cactus Water Services, LLC v. COG Operating, LLC addressing the ownership of produced water under an oil and gas conveyance. In Cactus Water, the Court...more

Blake, Cassels & Graydon LLP

Un tribunal de l’Alberta annule des décisions ministérielles liées aux redevances sur les sables bitumineux

Dans le cadre du contrôle judiciaire dont faisait l’objet l’affaire Imperial Oil Resources Limited v. Alberta (Minister of Energy) (en anglais seulement), la Cour du Banc du Roi de l’Alberta (la « Cour ») a annulé plusieurs...more

Houston Harbaugh, P.C.

Creating a Chasm or Filling a Void?

Houston Harbaugh, P.C. on

If you drive around Pennsylvania, you are likely not going to encounter a “For Sale” sign offering a cavern in the ground. But the voids, pore spaces, and cavities in the subsurface can be quite valuable now and in the...more

Gray Reed

Oral Promises, Paper Truths in a Texas Mineral Transaction

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The Texas Supreme Court in Roxo Energy Company, LLC v. Baxsto, LLC reinforced a fundamental contract principle: when fully integrated agreements plainly conflict with prior oral representations, reliance on those inconsistent...more

BakerHostetler

More ‘Big Beautiful’ Leasing in the Gulf of America

BakerHostetler on

Section 50102 of the OBBBA makes changes affecting what Section 18 of the OCS Lands Act calls the Five-Year Oil and Gas Leasing Program. Although the program is accompanied by thousands of pages of analysis, it is a one-page...more

Houston Harbaugh, P.C.

Colored Horses, Toxic Brews and Lithium Too?

Does the Texas Supreme Court’s Decision in Cactus Water Services v. COG Operating Provide Guidance About Lithium and Rare Earth Minerals Ownership in Pennsylvania? Lithium demand is expected to continue to increase as...more

Oliva Gibbs

Making a splash in the courts: The Cactus decision

Oliva Gibbs on

In a landmark decision, the Supreme Court of Texas held in Cactus Water Services, LLC v. COG Operating, LLC, that produced water belongs to the operator. When presented with a case where both the operator and a third party...more

McGuireWoods LLP

Texas Supreme Court Rules Produced Water Is Oil-and-Gas Waste, Further Disputes Foreshadowed

McGuireWoods LLP on

On June 27, 2025, the Supreme Court of Texas issued an opinion in a closely watched case addressing the ownership of produced water — the byproduct of drilling, fracking and formation fluids. In Cactus Water Services v. COG...more

Gray Reed

Limitations and Standing to Sue Dry Up Landowners’ Claim to Texas Riverbed

Gray Reed on

State of Texas. V. Reimer et al. studied lawyer-nerdy questions of standing to bring a lawsuit and statutes of limitations as applied to inverse condemnation suits.  Spoiler alert: To the chagrin of the landowners, waiting...more

Gray Reed

Another Louisiana Post-production Cost Case … and More

Gray Reed on

Dow Construction, LLC v. BPX Operating Company resolved a bundle of issues arising out of a drilling unit established by the Louisiana Commissioner of Conservation: who has the right to a drilling cost report, the operator’s...more

Jackson Walker

Texas Supreme Court Clarifies Default Ownership of Produced Water in Oil & Gas Leases – Key Questions Remain

Jackson Walker on

On June 27, 2025, the Texas Supreme Court issued a pivotal decision in Cactus Water Services, LLC v. COG Operating, LLC, holding that under the language of the granting clause found in the standard oil and gas lease, produced...more

Gray Reed

It’s Been Decided, In Texas the Mineral Lessee, Not the Surface Owner, Owns Produced Water

Gray Reed on

In Cactus Water v. COG Operating, the Supreme Court affirmed that mineral lessee COG, not water rights owner Cactus (who derived it rights from the surface owner), has the right to possession, custody, control, and...more

Pillsbury - Gravel2Gavel Construction & Real...

From Waste to Wealth: Texas Supreme Court Ruling in Cactus Water Defines Produced Water Ownership, Sets Stage for Clarity on...

On June 27, 2025, the Texas Supreme Court issued its long-awaited decision in Cactus Water Services, LLC v. COG Operating, LLC, No. 23-0676, resolving a high-stakes dispute over the ownership of produced water—a vexing...more

Gray Reed

Ambiguity Frees Louisiana Royalty Owner From Post-Production Costs

Gray Reed on

In Franklin v. Regions Bank the Fifth Circuit concluded that a royalty clause in a mineral lease resulted in a gross proceeds royalty; the royalty owners did not bear their proportionate share of post-production costs. Read...more

Gray Reed

Texas Operator Protected From Royalty Payment Error

Gray Reed on

The takeaway from DDR Weinert, Limited et al v. Ovintiv USA Inc. is that equitable recoupment rescued a royalty payor from its mistaken payment of royalties. But first, The events. The Richters were mineral lessors...more

Gray Reed

Texas Supreme Court Decides Who Must Produce to Maintain an Oil and Gas Lease

Gray Reed on

In Cromwell v. Anadarko E & P Onshore LLC the Supreme Court of Texas did what it so often does: In order to provide “legal certainty and predictability”, the Court considered the plain language of a contract in order to...more

McGinnis Lochridge

Supreme Court of Texas Washes Out the “Anadarko Washout”

McGinnis Lochridge on

The so called “Anadarko Washout” involves a washout of oil and gas leases on undivided working interests owned by non-operating mineral cotenants. This particular species of lease washouts is based on two recent cases from...more

Houston Harbaugh, P.C.

Sixth Circuit Rules That Driller Must Establish Marketability of Each Gas Product Under Market Enhancement Clause

Houston Harbaugh, P.C. on

Let’s assume you own 105 acres in Greene County, Pennsylvania. In 2020, you signed an oil and gas lease with ABC Exploration. During the negotiations, you agreed that only those post-production costs which actually...more

McGinnis Lochridge

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

McGinnis Lochridge on

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

Holland & Knight LLP

Texas Supreme Court: Subsurface Storage Rights Generally Belong to Surface, Not Mineral Owner

Holland & Knight LLP on

The Supreme Court of Texas has provided helpful guidance as to ownership of subsurface storage rights and pore space. In the recent holding in Myers-Woodward, LLC v. Underground Services Markham, LLC, the court held that "the...more

McGinnis Lochridge

Can a Production Sharing Agreement Override Surface Owner Consent? Hamilton v. ConocoPhillips Explored

McGinnis Lochridge on

A landowner’s failure to provide consent for surface use related to oil and gas operations does not necessarily preclude the lessee from conducting activities if the lease agreements allow surface use....more

Gray Reed

Operator Excused from Texas Relinquishment Act Claims

Gray Reed on

In Williams O & G Resources, LLC v. Diamondback Energy, Inc., a federal magistrate judge concluded that the Texas Relinquishment Act does not apply to public-school lands patented after 1931. The report and recommendation was...more

McGinnis Lochridge

Production Disputes and Estoppel Claims Cloud Lease Termination in Milam County

McGinnis Lochridge on

In this lease termination case (Pruett v. River Land Holdings, LLC, No. 03-22-00478-CV, 2024 WL 1745652, at *1 [Tex. App.—Austin Apr. 24, 2024, no pet.]), the Austin Court of Appeals was tasked with examining a cessation of...more

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