TEXAS COURT: LESSEE MAY NOT EXCLUDE OTHER LESSEES FROM CONSTRUCTING SURFACE FACILITIES OR DRILLING THROUGH MINERAL ESTATE

TEXAS COURT: LESSEE MAY NOT EXCLUDE OTHER LESSEES FROM CONSTRUCTING SURFACE FACILITIES OR DRILLING THROUGH MINERAL ESTATE

BY: Chris Halgren from OilandGasLawDigest.com

The San Antonio Court of Appeals, in Lightning Oil Co. v. Anadarko E&P Onshore, LLC, [1] held that a Texas oil and gas lease does not inherently convey a right for the lessee to control the “subterranean structures” from which hydrocarbons may be produced.  As a result, the court held that the mineral lessee of a severed mineral estate did not have the right to exclude third-parties from constructing surface facilities on the surface overlying the lessee’s mineral estate and/or exclude third-parties from drilling wells through (but was not producing from) the lessee’s mineral estate.  The Lightning court identified the “central question” as being the nature of Lightning Oil Co.’s (“Lightning”) interest as a mineral lessee.  After reviewing cases from its own court and the Texas Supreme Court, among others, the Lightning court concluded that the surface estate owner, not the mineral estate owner, controls the earth beneath the surface estate.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *