not constitute “relinquishment of title to the working interest.” 7
As of the date of this article, a Motion for Extension of Time to File a Petition for Review has been granted by the Supreme Court of Texas. It thus appears that the Amarillo Court’s decision may be reviewed by the Supreme Court.
Ultimately, the court recognizes that Dorchester “performed all functions of the Working Interest owner…” 8 including: (i) paying its proportionate share of production costs in the form of JIBs; (ii) receiving its proportionate share of revenue; (iii) paying lease royalties; (iv) responding to and making elections under the operative JOA; (v) paying taxes; and (vi) making “public filings reflecting ownership.” 9 Per the court, Dorchester performed these functions of a working interest owner for more than the required twenty- five years under the adverse possession statute. Torch therefore had ample time to bring suit long before 2016 and its non-op working interest was adverse possessed. This case leaves open some interesting questions with regard to the rights between working interest owners subject to a JOA. If an operator can adverse possess a non- operating working interest on behalf of another non-op party, are there circumstances where the operator itself could adversely possess a non-operated interest? At what point would the law of cotenancy and the heightened requirements of cotenant ouster potentially apply? Is the distinction here that one non-op is adversely possessing another non-op’s claim to the same interest? Is this decision at its heart based on equitable principles such as unjust enrichment, detrimental reliance, and estoppel? Or perhaps this case will be ultimately relegated to its somewhat unusual facts. In a strong dissent, Justice Lawrence M. Doss hinted at some of these concerns and others. For one thing, he argues that adverse possession shouldn’t apply at all because Dorchester, as a non-operator, did not actually drill the wells and produce the minerals (disclaiming the theory that the operator could adversely possess a non- operated interest on Dorchester’s behalf). Even if this “appropriation by proxy” theory is sound, Justice Doss argues that continuous possession was interrupted by multiple periods of non-consent under the JOA between 1990 and 2016. After all, he reasoned, when a party goes non-consent, they are deemed to have relinquished their interest under a JOA until applicable costs and risk penalties are recovered. 10
7 Id. at 19. 8 Id. at 5.
9 Id. at 21-22. 10 Id. at 27-29.
CONTACT If you have any questions regarding this case law update or suggestions for topics to be covered in future issues, please call our office at 713-229-0360 or contact:
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