oil and gas

Governmental entities in Texas like school districts, municipalities, hospital districts, and counties rely heavily on property taxes to finance their operations. Mineral interests are real property interests, and when a producing well is drilled the owners of rights to production from the well, both the working interest and the royalty owners, are subject to being levied a property tax on the value of their interests. When those property taxes are not paid, the taxing districts can file suit to foreclose their tax lien securing payment of the tax.

It has become the practice of some taxing districts to hire private law firms to file tax suits to collect taxes. Multiple small delinquent tax accounts are combined into one suit. The attorneys handling the case charge a flat fee per account to handle the matter and are responsible for trying to locate and serve the defendants with the lawsuit. In many cases, the delinquent taxes go back years and the taxing authorities have no current address for the royalty owners. So many named defendants are served by publication notice in a local newspaper or posting notice at the county courthouse. If the defendants do not answer, a default judgment is entered and the sheriff of the county is ordered to sell the royalty interests at a public sale.

Mitchell v. Map Resources, Inc. involves such a delinquent tax sale. In 1998, the Pecos-Barstow-Toyah Independent School District and the Reeves County Hospital District filed suit to foreclose tax liens against a some 673 defendants for delinquent taxes on royalty interests. One of the named defendants was Elizabeth Mitchell. The taxing authorities’ lawyers filed an affidavit seeking the court’s permission to serve the named defendants by posting, saying that each defendants is “either nonresident(s) of the State of Texas, absent from the state or transient,” and that “the names or residences of the owner or owners of the land or lots involved in said suit … are unknown and cannot be ascertained after diligent inquiry ….” Based on that affidavit, the court authorized service of the suit on the defendants by posting notice of the suit at the Reeves County courthouse. The court appointed an attorney ad litem to represent the defendants served by posting who had not appeared or answered. Continue reading →

Article from Texas Tribune, by Erin Douglas, republished with permission:

Deep underneath the ground, fluids travel down and shoot through ancient shale formations, fracturing rock and starting the flow of oil — the essential part of hydraulic fracturing technology that’s transformed America’s oil industry.

But that’s not all that comes up out of the earth.

Salty, contaminated water — held in porous rocks formed hundreds of millions of years ago — is also drawn to the surface during oil production. Before an oil price war and the coronavirus pandemic caused prices to crash in March, Texas wells were producing more than 26 million barrels of the ancient and contaminated water a day, according to an analysis by S&P Global Platts.

In the oil patch, figuring out how to dispose of this water “is something that only gets worse,” said Rene Santos, an energy analyst for S&P Global Platts. “Every time (companies) produce, they have to do something with the water.”

Usually, it’s later injected back underground, into separate wells — a practice that has been linked to increased seismic activity. Sometimes it’s reused in another fracking well. But a new U.S. Environmental Protection Agency decision allowing Texas to regulate the discharge of the water after it’s treated could be a first step toward new uses of the water — at least that’s what some Texas lawmakers and oil and gas producers hope. Continue reading →

Articles Tagged with oil and gas

Due Process and the No-Extrinsic-Evidence Rule: Challenges to Default Judgments When Service Was By Publication

Toxic substance or water supply? Lawmakers to weigh whether wastewater from oil fields could replenish the state’s aquifers