Replies to This Discussion

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 12, 2011 at 3:41

Texas mineral law is not suited to the protection of private mineral interests in an age of horizontal drilling and hydraulic fracture stimulation.  This is another compelling example of the need for reform of the Texas mineral codes.

Oil & Gas ProPermalink Reply by Ben Elmore on February 12, 2011 at 3:57

Difficult to accomplish in Texas.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 12, 2011 at 4:00

“TEXANS ALWAYS MOVE THEM!” - R. E. Lee

landownerPermalink Reply by little ole 1st grade teacher on February 19, 2011 at 21:31

Oh, my this sounds like, "We are up a Creek without a paddle"  as mineral owners.  That may be what is happening to me....it appears that there are wells all around but nothing for me.

landownerPermalink Reply by adubu on February 12, 2011 at 7:05

Ben---Is there language in typical lease to force operator of contiguous unit that is been capturing oil & gas minerals across lease lines to drill and protect royalty owners?

Oil & Gas ProPermalink Reply by Ben Elmore on February 13, 2011 at 6:09

Mike,
The court did not base it's decision on ownership of minerals versus a royalty interest. It did hold that in order to prove subsurface trespass, like any trespass claim, the claimant must prove he suffered some injury to his land. In this instance, he must prove some damage to the reservoir beneath his land occurred as a result of the frac. So you are correct, that this claim still applies if you can prove some injury/damage to your reservoir. But importantly, the court approved fracing across lease lines as not triggering a trespass claim if it does not result in damage to the reservoir. The rule of capture applies to fracing across lease lines just as if the frac had not crossed lease lines. This ruling departed from well established law on fracing that it was a trespass. So, if as a UMO an operator deposited frac fluids in your subsurface and produced minerals from your subsurface as a result, you would not have a claim unless you can prove the frac damaged your reservoir. Your recourse is to drill your own well or try to force your way into the unit under MIPA, or accept the operator's lease offer.

Oil & Gas ProPermalink Reply by Ben Elmore on February 13, 2011 at 5:57

The typical offset well provision can be drafted to provide some protection, plus the implied duty to protect against drainage would apply.

Permalink Reply by jffree1 on February 20, 2011 at 9:36

"the implied duty to protect against drainage"

 

Which means that your lessee should be drilling to "capture" your minerals before the offset well can drain them?  Do I understand that correctly?

Oil & Gas ProPermalink Reply by Ben Elmore on February 20, 2011 at 11:02

A little more complicated than that.  The implied duty only arises when it can be shown that a producing well on neighboring land is "substantially draining" your minerals, and a reasonably prudent operator under the same or similar circumstances would drill an offset well to protect against further drainage.  In other words, the obligation arguably does not arise until a neighboring well is in the process of draining your land.