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TX Supreme Court Contract Terms Contract Disputes

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

Jackson Walker

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

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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

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

Houston Harbaugh, P.C.

Texas Supreme Court Addresses Fuel Gas Question

Many oil and gas leases across Pennsylvania allow the driller to divert and use volumes of raw gas to power and fuel production operations both on and off the leasehold. Is a driller obligated to pay a royalty on that volume...more

Gray Reed

Supreme Court of Texas Decides Another Post-Production Cost Dispute

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In Carl v. Hillcorp Energy the Supreme Court of Texas addressed the relationship between the lessee’s use of gas off-premises under a free-use clause and the lessor’s burden to share post-production costs (PPCs) under the...more

Gray Reed

Texas Supreme Court Rules on “Bespoke” Add-Back Royalty Clause

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In Devon Energy Production Company, LP et al v. Sheppard et al, the Supreme Court of Texas construed what it referred to as a “bespoke” and “highly unique” royalty clause in several oil and gas leases to prohibit the...more

Gray Reed

Clause to Protect Against Drainage in a Mineral Lease Deemed Ambiguous

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Today we will skip our usual routine of explaining how court rulings on the question of the day might affect your interests. Instead we will discuss the fallout from abysmal document drafting. In Rosetta Resources Operating...more

Holland & Knight LLP

A Closer Look at Nettye Engler Energy, LP, v. BlueStone Natural Resources II, LLC

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The Supreme Court of Texas has once again tackled the heavily contested issue of postproduction costs in royalty calculations. In Nettye Engler Energy, LP, v. BlueStone Natural Resources II, LLC, No. 20-0639, the Court was...more

Butler Snow LLP

Disagreement of the minds? Texas Supreme Court hears arguments on implied revocation contracts doctrine.

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“Meeting of the minds” is a phrase that every lawyer remembers spoken in the voice of their 1L contracts professor. Amid the explanation of offer, acceptance, and the ever-perplexing concept of consideration, the objective...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

Gray Reed

Texas Supreme Court Says Don’t Mess With a Written Contract

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It is no surprise to Texas Supreme Court watchers that in Energy Transfer Partners et al v. Enterprise Products Partners LP et al. the court rejected claims that the parties had created a partnership by actions that varied...more

Skadden, Arps, Slate, Meagher & Flom LLP

Texas High Court Lays Partnership Formation Questions to Rest

On Friday, January 31, 2020, the Supreme Court of Texas clarified the law of partnership formation in the closely watched case of Energy Transfer Partners, L.P. et al. v. Enterprise Products Partners, L.P. et al. The case...more

King & Spalding

Freedom of Contract Cited as the Reason for Texas Supreme Court's Affirmation of Court of Appeals Judgment in ETP v. Enterprise

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On January 31, 2020, the Texas Supreme Court (the “Court”) affirmed the 2017 judgment of the Dallas Court of Appeals that Texas law upholds the rights of contracting parties to agree not to be partners unless certain...more

Womble Bond Dickinson

When is a Deal a Deal? Texas Supreme Court Weighs in on Two Landmark Oil & Gas Cases

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Business contracts are often compared to marriages, and for good reason. Both imply a deep level of mutual commitment to the relationship. But at what point in the relationship do businesses say “I do,” and at what point may...more

Vedder Price

Buyer Beware: Court Upholds Punitive Damages Waiver in Case Alleging Fraud for "New" Aircraft Sale

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In a recent decision, the Texas Supreme Court upheld a contractual waiver of punitive damages despite a finding of fraud by the seller in the sale of a supposedly new aircraft that instead contained used and repaired engines....more

Gray Reed

Executive Right Holder Liable for Refusing to Lease

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In resolving disputes among the mineral interest family, there is no bright-line rule delineating the duty of the executive right holder. In Texas Outfitters Limited v. Nicholson, the Texas Supreme Court explained why. The...more

Jones Day

Texas Supreme Court to Further Examine Disclaimer of Reliance Clauses

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The Texas Supreme Court is scheduled to review reliance disclaimer clauses and their enforceability in December 2018 and may provide further guidance on these issues. The Texas Supreme Court recently granted review in...more

Gray Reed

Redefining the Offset Well Clause, Part 2

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As promised, here is a more in-depth analysis of the recent Supreme Court of Texas opinion in TRO-X LP v. Anadarko Petroleum Corp. ...more

Gray Reed

Texas Supreme Court Redefines an Offset Well Clause

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In Murphy Exploration & Production Co. — USA v. Adams the Texas Supreme Court held that an offset well clause in an oil and gas lease did not require the lessee to drill wells calculated to protect against drainage. Four...more

Porter Hedges LLP

Construction Alert: "When Is It Cool Not to Pay? Fridge Dispute at Texas Supreme Court Addresses Prior Material Breach Doctrine"

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The Texas Supreme Court recently issued an opinion that could impact the next construction project where multiple parties complain about who breached (and who breached first) and whether the parties must continue performing...more

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