Oil and Gas Lawyer Blog
Foote v. Texcel Exploration, decided by the 11th Court of Appeals in Eastland, provides a lesson to surface owners.
Foote grazed cattle on land in Knox County under a lease with Styles. He put 650 head of cattle on the property, grazing winter wheat.
Texcel operated oil and gas wells on the property. Foote’s agent told Texcel it would be putting cattle on the property. Although the oil and gas lease did not require Texcel to fence its equipment, Texcel had a one-strand electric fence around its equipment. The cattle kept breaking through the fence, and Texcel’s pumper kept putting it back up. Finally, the cattle broke through again and knocked over a pipe coming out of a tank, resulting in an oil spill. The cattle ingested the oil, and 132 head of cattle died.
The jury was asked: “were Foote’s cattle licensees on that part of Texcel Exploration, Inc.’s premises under consideration? A ‘licensee’ is on the premises of another with the express or implied permission of the possessor but without an express or implied invitation.” The jury answered “No” and judgment was entered for Texcel. Foote appealed.
The court of appeals said that Foote’s theory of cattle as ‘licensees’ was improper — cattle can’t be licensees. The court said that Texcel, as mineral lessee held the dominant estate and “the only duty owed with respect to the cattle is to not intentionally, wilfully, or wantonly injure them when they are injured on the area of the oil and gas operations.” “An operator has no duty to fence, or otherwise protect or prevent livestock from entering, the premises of the mineral lessee.” The court affirmed the judgment against Foote.
So, absent a surface use agreement that would require the mineral lessee to fence its operations, ranchers are on their own.