Lightning Oil Company continues to assert its claim that off lease drilling locations constitute a subsurface trespass as to the mineral estate located under the drill site. A new Petition for Review was filed in the Texas Supreme Court in January of last year by Lightning, in which they ask the Court to reverse a decision issued by the Fourth Court of Appeals in San Antonio which upheld the trial court’s grant of Anadarko E&P Onshore, LLC’s Motion for Summary Judgement.

Although this case has been around for some time, and I have written about it before, here is a refresher. Lightning owns the mineral estate under approximately 3,000 acres in Dimmit County. Briscoe Ranch, Inc., is the owner of the surface estate. Nearby is a 15,200 acre wildlife sanctuary, the surface and 1/6 of the minerals of which is owned by Texas Parks and Wildlife. Anadarko is the owner of the lease that gives it the right to develop the minerals under the sanctuary.

Anadarko planned a drillsite on the surface owned by Briscoe, which necessarily would penetrate Lightning’s mineral estate, but would only have take points in the sanctuary’s mineral estate. Lightning filed suit against Anadarko, claiming trespass and tortious interference, as well as seeking an injunction preventing Anadarko’s location. At a Temporary Injunction hearing, the trial court denied Lightning’s Application for Temporary Injunction. The Court of Appeals upheld the denial, holding that Lightning did not show imminent and irreparable injury.

Lightning appealed this denial, arguing that the Court of Appeals, in refusing to consider whether a trespass occurred, which as a matter of law is an imminent and irreparable injury, erred. The Texas Supreme Court declined to hear the appeal.

At the trial level once again, the court granted Anadarko’s Motion for Summary Judgment, and dismissed Lightning’s claims of both trespass and tortious interference. Lightning appealed the trial court’s judgment, and the Fourth Court of Appeals in San Antonio agreed with Anadarko. The Court of Appeals held that not only was there no evidence that Anadarko trespassed, but also that Anadarko was justified in siting a well on Briscoe’s surface, since it had express permission from Briscoe to do so. Lightning appealed once more to the Texas Supreme Court, asking the high court to reverse both of the lower courts and agree with Lightning that off lease well locations are a subsurface trespass.

In its petition, Lightning argues that the “mineral-estate owner, as owner of the dominant estate, has the right to make any use of the surface that is necessarily and reasonably incident to the removal of the minerals. […] Accordingly, a mineral owner may enter the surface estate and use as much of the surface, including the subsurface, as is reasonably necessary to remove the minerals. […] Despite established law to the contrary, the court of appeals’ opinion demotes the mineral-interest owner’s vested property right—oil and gas in the subsurface—to a mere license to hunt for this property.”

As I’ve noted previously, most horizontal operators are aware that certain field rules allow an operator to locate a surface location off-lease so long as the operator has the surface owner’s permission and provides proper notice to affected mineral estate owners. If the Texas Supreme Court determines that drilling from an off-lease surface location, and through a mineral estate (with no take points), constitutes a trespass, it will affect many existing field rules, as well as many companies’ drilling plans. Oral argument is set for March, and hopefully the Court’s opinion will clearly address whether or not such off-lease locations could be a trespass or not, and settle the issue for good.