U.S. Capital

Texas Court of Appeals Rules Anadarko Can Drill through Competitor’s Leasehold Estate

Oct 6, 2015

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin, TX (Law Firm Newswire) October 6, 2015 – A Texas appeals court ruled against a subsurface mineral rights holder in an oil and gas case.

In the case of Lightning Oil Co. v. Anadarko E&P Onshore LLC, the Fourth Court of Appeals held on Aug. 19 that Anadarko, which held surface rights, could drill through Lightning’s subsurface leasehold estate to reach the minerals under a nearby property for which Anadarko held the subsurface rights.

“At issue in this case was whether a surface estate owner controls the earth beneath the surface estate, when the mineral rights are controlled by another party,” said Gregory D. Jordan, an Austin oil and gas attorney with the Law Offices of Gregory D. Jordan. “The appeals court held that the surface owner does maintain that control.”

Anadarko owned an oil and gas lease for a property that the Texas Parks and Wildlife Department (TPWD) operated as a wildlife sanctuary. Unable to obtain surface rights from TPWD, Anadarko entered into an agreement with Briscoe Ranch, the surface owner of an adjacent property. Lightning Oil owned the mineral rights for the Briscoe Ranch property, which had been severed from the surface prior to leasing. Anadarko placed wells on the Briscoe Ranch surface and drilled through Lightning’s mineral estate to reach the oil and gas underneath the TPWD property.

Lightning sued, arguing that the drilling constituted a trespass through its mineral estate and tortious interference with its oil and gas lease. However, the trial court granted Anadarko’s motion for summary judgment on both claims. The appeals court sided with Anadarko, holding that the earth beneath the surface estate is controlled by the surface estate owner.

Austin oil and gas lawyer Jordan noted the court’s holding is viewed as controversial by some lawyers and he would not be surprised if it is appealed to the Texas Supreme Court. “Horizontal and directional drilling creates a host of novel legal issues,” said Gregory D. Jordan. “I expect the Texas Supreme Court may ultimately rule on this matter.”

To learn more, visit http://www.theaustintriallawyer.com/

Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
Call: 512-419-0684

View Larger Map

  • Texas employment lawsuit claims company made employees work off the clock
    An employee at a Texas call center has filed a lawsuit claiming that she and other employees were not paid for work that they were required to do off the clock. Elissa Shetzer filed the lawsuit in U.S. District Court for the Eastern District of Texas against her employer, Harte-Hanks Response Management/Austin LP, which manages […]
  • Texas Supreme Court hears gas royalties case
    The Texas Supreme Court heard arguments in a lawsuit by property owners against Chesapeake Energy, claiming that the energy giant improperly withheld millions of dollars in natural gas royalty payments. Chesapeake is appealing a 2014 ruling by a San Antonio appeals court that upheld a decision by a state district court awarding at least $1 […]
  • Texas Supreme Court Rules in Favor of Oil & Gas Royalty Owners on Post-Production Costs
    On June 12, the Texas Supreme Court upheld rulings by two lower courts that post-production costs had been improperly withheld by Chesapeake Energy Corp. from royalty payments for production of natural gas in the Barnett Shale. The state high court’s 5-4 decision in Chesapeake Exploration, LLC v. Hyder clarifies when post-production costs may be exempted […]