One Man's Waste is Another Man's Treasure: Texas Appellate Court Holds that Produced Water Belongs to the Mineral Owner

By Jana Grauberger, Alma Shields, James T. Kittrell and Sam Allen on August 4, 2023

Published By: Liskow

The Energy Law Blog

Insight and Analysis of Legal Issues Impacting the Energy Industry

Recent technology has made produced water—a byproduct of fracing that was traditionally considered waste—a valuable product. However, no legal guidance existed on whether produced water was owned by mineral owners or surface owners. The Texas Legislature resolved some of that uncertainty by passing Texas Natural Resources Code § 122.002 on September 1, 2019, which generally grants title to produced water to whoever takes possession of it for the purpose of treating it for subsequent beneficial use. However, this statute only governs parties to instruments executed after September 1, 2019, which left parties to instruments executed prior to that date uncertain on whether they owned the produced water extracted from their property. The El Paso Court of Appeals undertook to resolve this conflict in Cactus Water Services, LLC v. COG Operating, LLC, and on July 28, 2023, it held that when instruments convey “oil and gas” or “oil, gas and hydrocarbons” to mineral owners without specifically reserving title to produced water or oil and gas waste, mineral owners have the sole right to produced water extracted from their property.

Link to full article: https://www.theenergylawblog.com/2023/08/articles/business/contract...