Oil and Gas Law Digest

The latest issue of Producer’s Edge is now available! In this issue, we feature articles regarding recent Texas Supreme Court decisions, reasonably prudent operator standard, enforcing and avoiding noncompetes, environmental enforcement update, and many more timely Texas legal updates impacting the oil and gas industry. Access the latest issue here: https://mineral.estate/3-1

We are proud to announce that our blog post “Offset Obligations: Court Holds Offset Obligation Not Dependent on an Expectation of Profit or Actual Drainage” has been selected as a top ten blog post by Texas Bar Today. Read the article here: http://bit.ly/OG-Offset-Obligations

Offset Obligations: Court Holds Offset Obligation Not Dependent on an Expectation of Profit or Actual Drainage – Oil and Gas Law Digest 12Aug Offset Obligations: Court Holds Offset Obligation Not Dependent on an Expectation of Profit or Actual Drainage Posted by: Austin Brister in Case Law Update Bell v. Chesapeake Energy Corp, 2019 Tex. App. LEXIS 1978, 2019 WL 1139584 (Tex.Civ.App.—San Antonio, 2019, no pet) In the last edition ...

The Second Issue of "Producer's Edge" is now available. Producer's Edge is an oil and gas law bulletin by the McGinnis Lochridge oil and gas practice group.

This issue covers several articles by Chris Halgren, Austin W. Brister, Kevin Beiter, Lindsey Roskopf, and Martin T. Lutz.

Download Issue 2 here: http://mineral.estate/1-2
Subscribe here: http://mineral.estate/signup

Here are a few highlights:

1. Admissibility of Expert Testimony: In a split decision, the Texas Supreme Court in Barrow-Shaver v. Carrizo discussed the admissibility of expert testimony and other extrinsic evidence when construing oil and gas agreements. (pg. 12)

2. Post-Production Costs: In Burlington v. Texas Crude, the Texas Supreme Court held that the phrase “into the pipeline” set a valuation point even though the lease required royalties to be paid on the basis of “amount realized,” thus allowing the lessee to “netback” certain post-production costs. (pg. 4)

3. Executive Mineral Interests: In Texas Outfitters v. Nicholson, the Texas Supreme Court held that the owner of executive mineral rights breached its duty to non-executive interests by refusing to execute an oil and gas lease. (pg. 6)

4. Offset Obligations: In Bell v. Chesapeake, the San Antonio Court of Appeals held that express offset obligations in two similar lease forms implicitly conditioned the obligation on proof of actual and substantial drainage and a reasonable expectation of profit, and that compensatory royalties must be calculated based on the entire adjacent horizontal wellbore, not merely that portion within the triggering distance. (pg. 2)

5. RRC Double-Assignment: An article surveying certain issues relating to the prohibition against double-assignment of acreage at the Railroad Commission. (pg. 9)

6. Surface Use Disputes: In this first installment in our series on surface use disputes, we survey the extent of the implied easement to use the surface. (pg. 14)

7. International Trade: An article surveying U.S. regulation of cross-border transactions relating to the oilfield sector. (pg. 16)

Today we published the first edition of "Producer's Edge," a Texas oil and gas law newsletter by the McGinnis Lochridge Oil and Gas Practice Group. It has been a ton of work, but we're very proud of it.

Check it out! Case law updates, summaries of cases pending in front of the Texas Supreme Court, and articles concerning drainage, roadway tracts, fracking, correction deeds, and the use of contract operators.

Download the PDF here: bit.ly/MLProducersEdgeV1E1
Subscribe here: bit.ly/MLOilandGasNewsletter

New case law alert. "The majority reviewed an Eagle Ford oil and gas lease, and held that, in light of the 'surrounding circumstances' of Shale Plays and drainage patterns for horizontal wells, the phrase “offset well” in the offset clause in that lease does not necessarily refer to a well that would protect the leasehold against drainage, but instead referred to a well drilled anywhere on the leased premises that was drilled to a depth required by the lease."

Tex. Supreme Court Splits Over Meaning of “Offset Well” in Shale Plays - Oil and Gas Law Digest The Texas Supreme Court issued a narrow 5-4 opinion in Murphy Exploration & Production Co. — USA v. Adams on June 1, 2018, interpreting a common “offset” clause contained in a 2009 oil and gas lease. The majority held that the phrase “offset well” in that clause does not necessarily refer ...

Here is an article we recently posted on OilandGasLawDigest.com. The El Paso Court of Appeals recently held, in Ring Energy v. Trey Resources, that a trial court outside of Travis County has jurisdiction to issue an injunction prohibiting a party with a valid RRC injection well permit from operating its well based on a claim the well would cause “waste.”

Here is a link to the full article: Click here to read more: https://oilandgaslawdigest.com/…/texas-court-holds-permit-…/
Boost Post

Very honored to have OilandGasLawDigest.com chosen by the Texas Bar as having the top law blog article in the state of Texas last week!

The Texas Supreme Court recently released its opinion in Denbury v. Texas Rice, clarifying the “reasonable probability” test for a pipeline to qualify as a common carrier with power of eminent domain. The case also clarifies the types of evidence applicable under that test which, in this case, involved pipeline agreements with unaffiliated parties that were entered into after the pipeline was already constructed.

Link to the full article: https://oilandgaslawdigest.com/caselaw/denbury-v-texas-rice-clarifying-test-common-carrier-status-power-eminent-domain/

Recently posted on OilandGasLawDigest. With the beginning of a new year, there are several oil cases pending in the Texas Supreme Court relevant to the oil and gas industry. We’ll be following these cases throughout the year with relevant updates. There are cases on production in paying quantities, surface damages, royalty litigation, fiduciary duties, shut-in wells, indemnity, pooling, offset obligations, retained acreage clauses, and post-production costs.

Link to the article: https://oilandgaslawdigest.com/caselaw/10-oil-and-gas-cases-to-watch-in-2017/

Texas: Subordination of Mortgages: "Operators will benefit from a new statute subordinating mortgages to oil and gas leases. However, certain limitations should be kept in mind in relying on this new statute."
OilandGasLawDigest.com

http://oilandgaslawdigest.com/primers-insights/statutory-subordination-of-mortgages-in-texas/

Critical to our industry and timely in this environment: “Oilfield Bankruptcy and Game Plan.” An excellent article by Kevin Beiter on OilandGasLawDigest.com.

http://oilandgaslawdigest.com/primers-insights/oilfield-bankruptcy-and-game-plan-hope-for-the-best-prepare-for-the-worst/