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Texas has emphasized the importance of the mineral rights of a property since the State’s founding and first constitution. Between this early emphasis and the prevalence of oil and gas production within the State (oil and gas is produced in …


With its abundance of valuable natural resources, Texas has become a legal battleground for a variety of oil and gas interests. One such interest, the ownership of highly sought after pore space, has been at the center of multiple property …


When Texas landowners work with oil and gas companies, they typically sign a standard lease specifying how royalties will be paid. Some of these standard leases were written over 100 years ago and thus may include, addendums and amendments that …


“Anti-washout” clauses prevent certain oil and gas royalties from lapsing over time. Recently, in Yowell v. Granite Operating Co., 557 S.W.3d 794 (Tex. App.—Amarillo 2018, pet. granted), the Texas Court of Appeals for the Seventh District affirmed the trial court’s determination that an “anti-washout” provision in a mineral assignment did not extend an overriding royalty interest (“ORRI”) to new leases. The Court effectively nullified the provision because it violated the Rule Against Perpetuities. The Texas Supreme Court granted Yowell’s petition for review, setting oral arguments for January 2020.


Oil and gas leases usually include royalty provisions requiring the lessor pay a percentage of revenue (a royalty) to the owner of the mineral rights. Production costs are almost always deducted before a royalty is calculated, but when the royalty vests can affect which production costs are deducted before calculation. The Texas Supreme Court recently held that post-production costs were also properly deducted from overriding royalty payments where the interest vested “into the pipeline” in Burlington Resources Oil & Gas Company, L.P. v. Texas Crude Energy, LLC (No. 17-0266).


Many Texas families and companies have been built on the back of oil and gas production. In Texas, mineral rights—the entitlement to explore and produce subsurface minerals, like oil and gas—can be separated from surface rights and sold, leased, gifted, split or otherwise conveyed relatively freely. The complexities of mineral rights leases were the focus of a recent $41 million judgment against EP Energy E&P Company, LP, a Texas oil and gas company. The case is Storey Minerals, Ltd., et al. v. EP Energy E&P Company, L.P., Case No. 001-36253, in the 81st Judicial District of La Salle, County, Texas.


Few would have predicted that a company’s inability to complete a Texas to California rail line in the late 1880’s would result in the creation of one of the oil and gas industry’s most valuable assets. The Texas Pacific Land Trust (TPL) was established in 1888 following the Texas and Pacific Railway Company’s failure and subsequent bankruptcy. The railway’s over 3.5 million acres of land were deeded into the TPL as part of the bankruptcy. The TPL sold much of this land over time, but its remaining 900,000 acres are mostly situated in the Permian Basin — one of the most oil rich basins in the country.


Occidental Petroleum’s acquisition of Anadarko Petroleum was huge news in the oil and gas industry. The $38 billion sale was a two-year ordeal that pitted Occidental against energy giant Chevron in a bidding war. While many applauded Occidental for the acquisition, others weren’t so sure. Billionaire investor Carl Icahn has filed a lawsuit seeking access to Occidental’s books and records relating to the Anadarko acquisition. Icahn alleges the acquisition “raises very real questions about competence” due to the hefty price tag.


The oil and gas industry is often considered the backbone of the Texas economy. As a state rich in resources, the fluctuations of the oil and gas industry are felt deeply, and an optimistic industry outlook is always welcome. Upswings in the oil and gas industry, however, are frequently accompanied by upswings in related litigation.