Oil and Gas Lawyer Blog

Twenty years ago I wrote an article, “Issues Concerning Royalty Valuations and Deductions,” published in the Petroleum Accounting and Financial Management Journal. One of those issues I discussed was the recurring problem of post-production cost deductions. In the article I contrasted the approaches to lease construction illustrated by two cases:…

Ammonia production is essential to agriculture production, used as a fertilizer. Anhydrous ammonia, a gas, is injected into farmland to enhance the soil with nitrogen. As a boy I remember driving a tractor to fertilize with it. Ammonia production also uses huge amounts of energy. It is created by transforming…

This case illustrates an increasing problem related to salt water disposal in the Permian Basin. Recent articles in Texas Monthly and other publications have documented leaks from old abandoned wells caused by injection of massive quantities of salt water into shallow formations.Iskandia Energy Operating, Inc. v. SWEPI LP, No. 08-22-00103-CV,…

The US Supreme Court has agreed to hear Devillier v. State of Texas, Docket No. 22-913, a suit by the Devilliers and others to recover for damages to their land caused by the State. The facts are described in the Devillier’s Petition for Writ of Certiorari: This case arises out…

In 2014 the City of Denton banned drilling of wells within its city limits. In response the Texas Legislature quickly passed HB 40, giving the Texas Railroad Commission exclusive jurisdiction to issue drilling permits within municipalities and allowing cities to regulate oil and gas activity only if their ordinances relate…

What Electricity Sources Power the World? Worldwide only 14.4% of electricity comes from renewables – wind, solar, geothermal; if you add in hydroelectric, the number is 29%.  

The federal district court in Pecos, Judge David Counts, issued a memorandum opinion in H.L. Hawkins, Jr., Inc. v. Capitan Energy, Inc., P:22-CV-DC[Hawkins] addressing Hawkins’ claim that Capitan had improperly deducted post-production costs from its royalty. The Court held that the reasoning in the recent Texas Supreme Court case of Devon…

Production of oil and gas is often accompanied by production of water from the same formation. In recent years, water has been injected into wells in the process known as hydraulic fracturing, or “fracking.” Much of the frac water returns with oil and gas during the initial production of the…

The Amarillo Court of Appeals recently decided PBEX II, LLC, et al. v. Dorchester Minerals, L.P. et al., addressing an interesting issue on adverse possession of a non-operating working interest. One justice dissented. The Court’s opinion relies on two Texas Supreme Court decisions that were controversial: Natural Gas Pipeline co.…