Wildlife Management Area in LaSalle and Dimmit Counties. The terms of the lease required Anadarko to locate drill sites off of the Chaparral Area whenever “prudent and feasible.” Id. at 43. Anadarko tried first to secure a surface agreement from the Texas Parks and Wildlife Department and was unsuccessful. The tract adjacent to the Chaparral Area had split surface and mineral ownership; the surface was owned by Briscoe Ranch, Inc., while the minerals were
Leased to Lightning Oil
Leased to Anadarko
Chaparral Wildlife Management Area
Briscoe Ranch
How did prior courts view this issue:
owned by the Hurd family. In 2009, the Hurds leased the minerals to Lightning Oil Co. Anadarko entered into an agreement with Briscoe Ranch, the surface owner of the adjacent tract, to locate a drill site on the Ranch tract close to the property line between the Ranch and the Chaparral Area. Anadarko’s plan was to drill vertical wellbores through the mineral estate underlying the Ranch and then “kick-off ” horizontally to access its leased minerals under the Chaparral Area. Lightning was not a party to the agreement between Anadarko and Briscoe Ranch, and when Anadarko staked out its first well site, Lightning objected not only to the proposed site but to Anadarko drilling from any location on the Ranch. Anadarko entered into a surface use and subsurface easement agreement with Briscoe Ranch specifically authorizing Anadarko to locate wells on the surface of the Ranch, drill through the subsurface and use those wells to produce minerals from the Chaparral Area. Lightning filed suit alleging Anadarko committed subsurface trespass on Lightning’s leased mineral estate and tortious interference with its mineral lease. Lightning sought a temporary restraining order and an injunction to prevent Anadarko from drilling on the Ranch. Both parties filed motions for summary judgment. Lightning claimed that Anadarko’s drilling activities could cause harm due to the potential for damage to Lightning’s minerals, the need to drill additional offset wells to prevent drainage, and interference with Lightning’s drilling plans. Why did the parties go to court:
Prior to this case, Texas courts had held generally that a mineral lessee could be entitled to injunctive relief if it could show well surface locations interfered with its rights under the mineral lease. Humble Oil & Ref. Co. v. L & G Oil Co., 259 S.W.2d 933, 938 (Tex. Civ. App. – Austin 1953, writ ref ’d n.r.e.). The general rule was refined a few years later when a court held that to prove such interference, the mineral lessee must show that he needed the surface location being used at that time and place. Atlantic Ref. Co. v. Bright & Schiff, 321 S.W.2d 167, 169 (Tex. Civ. App. – San Antonio, 1959, writ ref ’d n.r.e.). In both of these cases the adjacent tract’s surface owner agreed to the use of the surface location and conduct of the subsurface operations by the oil and gas operator. In one Texas case departing from precedent, in which the surface owner of an adjacent tract approved the use of the surface, the surface lessee of such tract objected to the surface usage and the mineral lessee opposed the subsurface conduct, the court determined there would necessarily be damage to the oil, gas and mineral formation, as well as damage to the surface lessee. Chevron Oil Co. v. Howell, 407 S.W.2d 525, 528 (Tex. Civ. App. – Dallas 1966, writ ref ’d n.r.e.).
What did the courts decide here:
The trial court granted Anadarko’s motion for partial summary judgment. The court of appeals affirmed, noting that “the surface estate owner controls the earth
12
N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s
Made with FlippingBook - Online magazine maker