News

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.

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.

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.

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.

If you’re anything like me, you’ve looked back and wondered what you could have done during the ’20-’22 timeframe to position yourself even better than you are now. “Why didn’t I buy that energy stock in March ’20?” “Why didn’t I go all in on that non-op working interest in Eddy County?” Or, hopefully you’re asking, “how can I use this unlikely gift of living through COVID to inform my strategic thinking so that next time, I’m ahead of the game.” That one took me a little longer to settle on.