The Texas Supreme Court has denied motion for rehearing of its opinion in Burlington Resources Oil & Gas Company v. Texas Crude Energy, No. 17-0266. The case addresses deductibility of post-production costs in the context of an overriding royalty. The case may, however, have implications for post-production-cost deductions in oil…
Oil and Gas Lawyer Blog
Death of Eminent Domain Bill and Other Legislative Maneuvers
Senate Bill 421, reforming how pipelines exercise the power of eminent domain to condemn right-of-way, died at the end of the Texas legislative session after Rep. Tom Craddick sought to make amendments opposed by its author, Sen. Lois Kolkhorst. Kolkhorst said Craddick “seized the legislation” from its house sponsor and…
The TPLT Proxy War
A couple of years ago I wrote about the history of Texas Pacific Land Trust (TPLT), one of the largest landowners in Texas. The trust was formed out of the bankruptcy of Texas Pacific Railroad, which received 3.5 million acres of land in West Texas in consideration for building the…
Texas Railroad Commission Sued to Force Regulation of Pipeline Route
Hays County and the City of Kyle, and private landowners, have sued Kinder Morgan, the Texas Railroad Commission and its commissioners over the route for Kinder Morgan’s Permian Highway Pipeline, a gas pipeline 42 inches in diameter, set to cross through the Texas hill country and Hays County. The suit…
Increased Gas Flaring in the Permian
Rystad Energy has released an analysis of gas flaring in the Permian Basin. Operators flared 533 million cubic feed per day during the fourth quarter of 2018 – more than some states use in a year.The flared volumes represented an average of less than 5% of all gas produced. But…
Players in the Permian
Below is a Drillinginfo map of players in the Permian. Also see Forbes article here. Chevron’s position is derived from Texas Pacific Land Trust‘s spinoff of minerals under TPLT’s lands, subsequently acquired by Texas. It owns fee minerals in those lands. Click on image to enlarge. As Forbes says, ripe…
Strickhausen v. Petrohawk – Ratification of Pooled Units
The San Antonio Court of Appeals handed down its opinion last week in Strickhausen v. Petrohawk Operating Company, No. 04-18-00636-CV. The issue: Did Ms. Strickhausen ratify a pooled unit not authorized by her lease, or is she estopped from contesting the validity of the unit, because she accepted royalty checks…
Texas Outfitters v. Nicholson and the Duty of the Holder of the Executive Right
Last week the Texas Supreme Court handed down its opinion in Texas Outfitters, Limited, LLC v. Nicholson, No. 17-0509, once again addressing the duty of the holder of executive rights to minerals owned by another. The Court affirmed a judgment of $867,654.32 plus interest and costs against Texas Outfitters for…
The Law of Hydraulic Fracturing
Paul Yale and Brooke Sizer, lawyers at Gray Reed & McGraw in Houston, published an article in the most recent Section Report of the Oil, Gas & Energy Resources Law Section of the State Bar, “ A Brief Look at the Law of Hydraulic Fracturing in Texas and Beyond.” It…
Net Royalty Acres Defined
I’ve been asked what is a “net royalty acre.” The term “net royalty acre” is used by mineral and royalty buyers to price a mineral or royalty interest that is subject to an oil and gas lease. It is related to, but different from, a “net mineral acre.” To illustrate,…