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I have been reading a biography of Roger Williams, the founder of Rhode Island, by John M. Barry: Roger Williams and the Creation of the American Soul – Church, State, and the Birth of Liberty.

Williams was born in 1603 and as a young man became a friend and assistant to Lord Edward Coke, who at the time was sixty years of age. Coke is known by lawyers as a pillar of the development of the common law in England. Williams greatly admired Coke and was heavily influenced by him. Coke sometimes called Williams his son, and after Coke’s death Williams referred to him as his “much honored friend, that man of honor, and wisdom, and piety.”

Roger Williams immigrated to Massachusetts Colony in 1631. He was minister in Salem, but his theological differences with the Pilgrim fathers resulted in his expulsion from the colony in 1636. He went to what is now Rhode Island and founded the Providence Plantation. He believed that government should not meddle in matters of the church—that a “wall of separation” should be erected between them–a principle which became embodied in the Constitution’s First Amendment: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”

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Our firm represented the Opielas in two cases involving a Magnolia horizontal well in Karnes County: a suit against Magnolia in Karnes County, and a suit against the Texas Railroad Commission in Travis County. In both cases the Opielas contended that Magnolia had no right to drill a horizontal well located partly on their land.

Because this was a significant case addressing allocation and PSA wells, this post will go into the somewhat complex facts and history in some detail.

The Opielas’ lease covers some 640 acres; they acquired the property subject to an old existing lease that was held by production from vertical wells. Enervest and Magnolia drilled some horizontal EagleFord wells located wholly on the lease. The old lease provided for 1/8 royalty, and 3/4 of the royalty had been reserved or transferred to other owners long before Enervest acquired the lease, so the Opielas owned only 1/4 of 1/8 royalty. But the old lease prohibited pooling for oil wells. Enervest sought a lease amendment permitting pooling, but they were not able to reach agreement with the Opielas.

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On the last day of 2024 the Texas Supreme Court issued its opinion in ConocoPhillips v. Hahn, No. 23-0024, putting to rest a long-running dispute between Kenneth Hahn and ConocoPhillips (COP). The opinion deals with a fixed vs. floating NPRI reservation, and a stipulation of interest addressing the reservation.

Kenneth Hahn owned the surface estate and 1/4th of the minerals in 37 acres of land in DeWitt County. In 2002 Hahn conveyed the tract to William and Lucille Gips, reserving

an undivided one-half non-participating interest in and to all of the royalty [Hahn] now owns (same being an undivided one-half of [Hahn’s] one-fourth or an undivided one-eighth royalty) ….

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Another case interpreting a royalty reservation in an old conveyance has been decided by the 11th Court of Appeals in Eastland: Boren Descendants and Mabee Descendants v. Fasken Oil and Ranch, Ltd., two consolidated appeals, Nos. 11-22-00365-CV and 11-23-00001-CV. This is the first skirmish in a fight that will undoubtedly end up in the Texas Supreme Court.

In 1933, Midland Farms Company sold to J.E. Mabee 60,000 acres of land in Andrews and Martin Counties. The deed reserves “an undivided one-fourth (1/4th) of the usual one eighth (1/8th) royalty.” The Boren and Mabee descendants are the successors-in-interest of J.E. Mabee in the minerals under this 60,000 acres. Fasken Oil and Ranch, Ltd. is the successor to Midland Farms Company and owner of the reserved royalty. Fasken is also the operator of wells on the 60,000 acres.

Fasken sued the Boren and Mabee descendants in 2019, contending that the 1933 deed reserved a floating 1/4th of the royalty. The Boren and Mabee descendants raised several affirmative defenses, including waiver, division order estoppel/estoppel by contract, judicial estoppel, estoppel by deed, limitations, ratification and/or quasi-estoppel, and presumed grant. The trial court sided with Fasken on construction of the royalty reservation and entered partial summary judgment denying the Boren and Mabee affirmative defenses, leaving only the question of damages. The judge suggested, and the parties agreed, to appeal the legal issues in both cases. The Eastland Court of Appeals affirmed the trial court’s rulings and remanded the cases.

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MIT’s Casey Crownhart publishes a newsletter called The Spark. Here is his list of greenhouse gasses and their potency:

Carbon dioxide: The leading actor

I couldn’t in good conscience put together a list of greenhouse gases and not at least mention the big one. Human activities released 37.4 billion tons of carbon dioxide into the atmosphere in 2023. It’s the most abundant greenhouse gas we emit, and the most significant one driving climate change.

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In Fasken Oil and Ranch, Ltd. v. Puig, No. 04-23-00106-CV, the San Antonio Court of Appeals was asked to construe a royalty reservation in a 1960 deed:

There is saved, excepted and reserved, in favor of the undersigned, B.A. Puig, Jr., out of the above described property, an undivided one-sixteenth (1/16) of all the oil, gas and other minerals, except coal, in, to and under or that may be produced from the above described acreage, to be paid or delivered to Grantor, B.A. Puig, Jr., as his own property free of cost forever. Said interest hereby reserved is Non-Participating Royalty.

Fasken operates wells on the property; the Puig descendants sued Fasken for deducting post-production costs from their royalty. The trial court agreed with Puig, and the court of appeals affirmed, in a well-reasoned opinion relying on the Supreme Court’s opinion in Chesapeake Exploration v. Hyder, 483 S.W.3d 870 (Tex. 2016). “Free and of all cost forever” means what it says and includes both production costs and post-production costs. The court distinguished Heritage Resources v. Nationsbank, 939 S.w.2d 118 (Tex. 1996) because unlike Heritage the royalty clause in this reservation “does not contain a valuation point.” The lease in Heritage provided that royalty was payable on the market value “at the well,” the point at which royalty was valued for purposes of calculating royalty; so even though the lease also provided for no deductions from the lessors’ royalty, the Supreme Court said post-production costs incurred downstream of the well could be deducted.

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In Mitchell v. Map Resources, the Texas Supreme Court described the constitutional right of due process as follows:

The Due Process Clause of the United States Constitution prevents the government from depriving a person of his or her “property, without due process of law.” U.S. Const. amend. XIV, § 1; see also Tex. Const. art. I, § 19 (“No citizen of this State shall be deprived of … property … except by the due course of the law of the land.”).7 It is well settled that these words “require that deprivation of life, liberty or property by adjudication be preceded by *189 notice and opportunity for hearing appropriate to the nature of the case.” Mullane, 339 U.S. at 313, 70 S.Ct. 652. Notice must be “reasonably calculated, under the circumstances, to apprise interested parties of the pendency of the action and afford them the opportunity to present their objections.” Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 84, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988) (quoting Mullane, 339 U.S. at 314, 70 S.Ct. 652).8

Gill v. Hill, 688 S.W.3d 863, decided by the Texas Supreme Court in January, grows out of a very similar set of facts the court reviewed in Mitchell v. Map Resources in 2022.

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Last month the Railroad Commission published proposed revisions to its rules governing the handling of oilfield waste. This is a comprehensive rewrite of its rules that had not been revised since 1984. The Commission has been working on these revisions for a year.  The published proposed rules can be found here. A good article summarizing the changes being considered, from Inside Climate News, can be seen here.

Oilfield waste governed by the rule includes frac water, produced water, and pits used by operators when drilling and completing wells. One purpose of the rules is to protect groundwater. But reserve pits, used to handle waste produced during drilling, aren’t required to be lined to prevent seepage into groundwater unless the groundwater is within 50 feet of the bottom of the pit. No permit is required for reserve pits. Commission Shift, which advocates for reforming Commission practices, has published its critique of the proposed rules, found here.

Comments on the proposed rule can be posted on the Commission website. The comment period ends on September 30.

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Unitex WI, LLC v. CT Land and Cattle Co., decided by the Amarillo Court of Appeals, petition for review pending in Texas Supreme Court.

CT Land and Cattle owns the surface estate of 4,000 acres in Scurry and Kent Counties. The land is subject to an oil and gas lease signed in 1948 to Humble Oil & Refining Company. Unitex is the operator of some 200 wells on the property. The oil and gas lease provides: “When required by Lessor, Lessee will bury all pipelines below ordinary plow depth.” Multiple pipelines serving those wells lie on the surface of the land.

CT Land wrote Unitex, requesting that all pipelines be buried, per the burial covenant in the lease. Unitex refused; CT Land sued; and the district court in Lubbock County entered an order requiring Unitex to bury its lines. Unitex appealed.

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