Attachment of Mineral Liens

Platinum Energy Solutions, Inc. v. Lazarus Operating LLC, No. 13-20-00279-CV, 2022 WL 120151 (Tex. App.—Corpus Christi-Edinburg Jan. 13, 2022, no pet. h.). Attachment of Mineral Liens.

At issue in this case was whether a lien holding mineral contractor could foreclose on a ranch’s mineral estate. The court relied on Section 56.003 of the Texas Property Code, and distinguishing case law, to rule the lien never attached to the fee title of the property. Secondarily, the court overruled the lienholder’s unsupported claims and statute of limitations defense.

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Post-Production Cost Deductions and the Lease's Valuation Point

Nettye Engler Energy, LP v. BlueStone Natural Resources II, LLC, 639 S.W.3d 682 (Tex. 2022). Post-Production Costs.

In Nettye Engler Energy, LP v. BlueStone Natural Resources II, LLC, the Supreme Court of Texas affirmed the Second Court of Appeal’s decision that, based on the specific language used in creating the in-kind non-participating royalty interest (“NPRI”) at issue, the royalty interest was free of production costs but burdened by postproduction costs. The Supreme Court of Texas qualified the court of appeal’s decision by noting that the court of appeals had reached the correct result, but misconstrued the opinion in Burlington Resources Oil & Gas Co. v. Texas Crude Energy, LLC, as establishing a rule that delivery “into the pipeline,” or similar phrasing, is always equivalent to an “at the well” valuation point. The Supreme Court clarified that the Burlington Resources opinion merely emphasized that all contracts are construed as a whole to ascertain the parties’ intent from the language they used to express their agreement.

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Quantum Meruit and Future Contract Conundrum

Giant Resources, LP v. Lonestar Resources, Inc., No. 02-21-00349-CV, 2022 WL 2840265 (Tex. App.—Fort Worth June 21, 2022, no pet.). Quantum Meruit Claim.

In Giant Resources, LP v. Lonestar Resources, Inc., the Texas Court of Appeals for Fort Worth held that Giant Resources (“Giant”) is not entitled to recover under a quantum meruit claim when the claim is based on services provided in anticipation of obtaining a future contract. That is, no recovery can be had for preliminary services performed to obtain a hoped-for future contract. The court’s holding here is consistent with other Texas courts.

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Guidance from Texas Courts on PSA Wells (or is it?)

The Texas 3rd Court of Appeals recently issued the Magnolia v. Opiela decision on Production Sharing Agreement (“PSA”) wells. While this case provides a nice history of pooling, allocation wells, and production sharing agreement wells, including some strong guidance that PSA wells do not implicate pooling concerns, I believe that the 3rd Court’s narrow ruling is as significant for what it does not cover, as for what it does.

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Navigating New Mexico's Oil and Gas Landscape: Understanding Key Stakeholders

New Mexico, with its abundant natural resources, presents a myriad of opportunities in the oil and gas sector. However, the landscape is also characterized by a complex web of ownership and regulatory requirements that industry professionals must navigate. In this post, we delve into crucial aspects of New Mexico’s oil and gas landscape as outlined in the Landman’s Guide to New Mexico.

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