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.