At the Well Weekly (v.11.7.2025)
- George A. Bibikos
- 6 days ago
- 18 min read
Oil + Gas Update: Pipeline Issues, Royalty Disputes, and Subsurface Trespass Shape Late Q3-Q4 Docket.
Since our last report, natural gas and oil prices climbed steadily alongside a modest movement in the national rig count.
In pipeline and midstream developments, federal courts addressed pipeline-access rights and subsidence issues, cost-causation limits on FERC rate approvals, and the scope of environmental review for interstate and cross-border pipeline projects.
In Appalachia, courts addressed pipeline easements, post production costs under Wellman/Tawney in WV, surface use, removal in royalty-accounting suits, PAPUC matters, class certifications in royalty litigation, arbitration, depth limitation cases, mineral-reservation and deed-construction issues, forum selection in subsurface trespass cases, bonus payments, and pipeline protests.
In other regions, courts addressed surface-use and lease-expiration disputes, ORRI and NPRI ownership, royalties and post production costs, the drainage covenant, produced-water contracts, force-majeure declarations in NAESBs, environmental reviews and federal leasing programs, oil and gas cases before the Texas Business Court, insurance and duty-to-defend issues, "negative royalty" class actions, co-tenant accounting issues, seismic testing, and indemnity limits under oilfield service agreements.
Rig Counts, Spot Prices + Oil Prices
Rigs: National (🔺548); Marcellus (23); Utica/Point Pleasant (14)
Brent Crude: 🔺$63.63/bbl
West Texas Intermediate: 🔺$59.75/bbl
NYMEX: December 2025 @ 🔺$4.232/MMBtu; 12-Month Strip @ 🔺$4.050/MMBtu
Spot Prices: Henry Hub @ 🔺$3.51/MMBtu
Headlines & Holdings - Appalachia
Fourth Circuit Says Pipeline Co. has Access Rights to Prevent Subsidence. The Fourth Circuit held that a pipeline company’s easement included the right to enter the surface owner’s property to perform necessary mitigation when subsurface coal mining threatened the pipeline. Columbia Gas Transmission, LLC v. RDFS, LLC, --- F.4th ----, No. 24-1387, 2025 WL 2112924 (4th Cir. July 29, 2025).
Fed. Ct. in WV Says Wellman + Tawney Prohibit PPCs in Royalty Fight. A federal court in West Virginia held that the royalty clause at issue in a dispute over post-production costs did not meet the language-specificity requirements of the state’s Wellman and Tawney decisions, rejecting the lessee’s claim that those “marketable product” rules shouldn’t apply because they are based on the implied marketing covenant that the lease expressly disclaimed and relying instead on express lease language that requires “marketing” of produced gas to enforce the Wellman/Tawney rules. Smith v. SWN Production (Ohio), LLC, --- F. Supp. 3d ----, No. 5:23-CV-243, 2025 WL 2210772 (N.D. W. Va. Aug. 4, 2025).
Fed. Ct. in WV Rejects Damage Claim for Wellsite Maintenance Activities. A federal court in West Virginia held that a landowner complaining about surface disturbance in connection with well maintenance and plugging activities failed to meet his burden of proving that the lessee both exceeded its right to reasonable use of the surface and caused recoverable damages. Comer v. Diversified Production LLC, --- F. Supp. 3d ----, No. 2:24-CV-00024, 2025 WL 2210775 (S.D. W. Va. Aug. 4, 2025).
Fed. Ct. in WV Denies bid to Remand Royalty Dispute. A federal court in West Virginia denied a bid to remand a dispute alleging improper accounting for royalties and interests and a related violation of the state’s royalty statute, holding that the amount in controversy at the time of removal exceeded the $75K threshold for diversity jurisdiction. L&D Investments, Inc. v. Antero Resources Corp., --- F. Supp. 3d ----, No. 1:25-CV-18, 2025 WL 2210771 (N.D. W. Va. Aug. 4, 2025).
Ohio Ct. App. Affirms Valuation of Interstate Pipeline for Tax Purposes. A court of appeals in Ohio affirmed the state’s valuation of Rover Pipeline for tax year 2019, rejecting the company’s claim that the board erred in adopting the state appraiser’s valuation. Rover Pipeline, L.L.C. v. Harris, --- N.E.3d ----, No. 2024-0484, 2025 WL 2324921 (Ohio Aug. 13, 2025).
Pa. Cmwlth. Ct. Upholds PUC’s Alternative Energy Regs. The Pennsylvania Commonwealth Court upheld the Public Utility Commission’s regulations implementing the “Alternative Energy Portfolio Standards Act” despite challenges from a customer-generator, holding that the regs are consistent with the statute and within the commission’s authority. Hommrich v. Pa. PUC, --- A.3d ----, No. 463 M.D. 2022, 2025 WL 2325316 (Pa. Cmwlth. Aug. 13, 2025).
Fed. Ct. in Ohio Says Gas Co. can Discover Non-Testifying Expert Info in Utica/Point Pleasant Dispute. In a class action dispute over whether a company unlawfully produced gas from the Utica/Point Pleasant formation despite a depth limitation in relevant leases, a federal court in Ohio held that the husband of a plaintiff identified as an “expert” in oil and gas is a non-testifying expert subject to discovery who couldn’t shield communications under the marital privilege, but the court left open the possibility that some materials may still be protected by attorney-client or work-product immunity. Honey Crest Acres, LLC v. Rice Drilling D, LLC, --- F. Supp. 3d ----, No. 2:22-CV-3943, 2025 WL 2341749 (S.D. Ohio Aug. 13, 2025).
Ohio App. Ct. Says No PPC Deducts for ORRIs. A court of appeals in Ohio held that overriding royalty interests are not subject to post-production costs when the ORRI contract is silent on the issue. Gateway Royalty, LLC v. EAP Ohio, LLC, --- N.E.3d ----, No. 24 CA 0980, 2025 WL 2402064 (Ohio Ct. App. August 15, 2025).
Fourth Circ. Upholds Royalty Class Certification. The Fourth Circuit upheld a trial court order certifying a class of West Virginia landowners alleging that their lessee underpaid royalties despite potentially thousands of varied lease forms. Glover v. EQT Corp., --- F.4th ----, No. 23-2204, 2025 WL 2405514 (4th Cir. Aug. 20, 2025).
Fed. Ct. in PA Compels AAA Arbitration. A federal court in Pennsylvania concluded that landowners could not seek to compel arbitration under the FAA because they already are participating in AAA arbitration proceedings with their lessees involving a royalty dispute and therefore have no standing to compel non-AAA arbitration under the FAA. Dollison v. Antero Resources Corp., --- F. Supp. 3d ----, No. 2:24-CV-01494-CCW, 2025 WL 2468070 (W.D. Pa. Aug. 27, 2025).
Third Circ. Says Supremacy Clause Invalidates PUC Order Blocking Federal Electric Transmission Project. The Third Circuit affirmed a district court’s ruling that the Pennsylvania PUC’s denial of permits for federally selected transmission projects violated the Supremacy Clause by creating obstacles to federal objectives. Transource Pennsylvania, LLC v. Pa. Pub. Util. Comm’n, --- F.4th ----, No. 24-1045, 2025 WL 2554133 (3d Cir. Sept. 5, 2025).
Ohio Ct. App. Says Reservation Limited to Minerals “Heretofore Conveyed.” A court of appeals in Ohio held a deed’s language excepted only minerals “heretofore conveyed” and did not create a new reservation of all oil and gas to the grantor. Vickers v. Capstone Holding, --- N.E.3d ----, Case Nos. 24 JE 00023 & 00025, 2025 WL 2555830 (Ohio Ct. App. Sept. 4, 2025).
Fed. Ct. in Ohio Remands Subsurface Trespass Case to State Court. In a dispute over whether a company unlawfully produced gas from below the base of the Utica formation based on an alleged depth limitation in the parties’ lease, a federal court in Ohio remanded the case to state court, rejecting arguments that the plaintiffs joined certain defendants to circumvent diversity jurisdiction. Edge v. Rice Drilling D, LLC, --- F. Supp. 3d ----, No. 2:24-CV-4136, 2025 WL 2601922 (S.D. Ohio Sept. 9, 2025).
Fed. Ct. in Ohio Says No Waiver of Removal in Forum-Selection Clause. In a lease dispute, a federal court in Ohio denied a motion to remand and concluded that a forum-selection clause in the parties’ agreement said nothing about limiting the right to remove a diversity case to federal court and therefore lacked a “clear and unequivocal” waiver of the defendants’ right to remove. Clover Ridge Holdings, LLC v. Rice Drilling D, LLC, --- F. Supp. 3d ----, No. 2:24-CV-4137, 2025 WL 2599493 (S.D. Ohio Sept. 9, 2025).
Fed. Ct. in WV Strikes Proposed O+G Royalty Class Action. In a dispute over underpaid royalties, a federal court in West Virginia granted a motion filed by the lessee to strike a proposed class given that the court would compelled to engage in a lease-by-lease analysis to determine whether each royalty provision complied with the requirements of WV royalty cases such as Wellman and Tawney (regarding post-production costs). Braxton Minerals III, LLC v. Antero Res. Corp., --- F. Supp. 3d ----, No. 1:21-CV-119, 2025 WL 2778996 (N.D.W. Va. Sept. 26, 2025).
D.C. Cir. Says FERC Order Approving TGP’s Rates Violates Cost-Causation. In a case involving FERC’s approval of Tennessee Gas Pipeline’s two-tiered rate for fuel used to move gas through its pipeline, which imposed upon Antero as a shipper to pay the highest marginal fuel rate irrespective of actual use of capacity on an expanded pipeline, the D.C. Circuit held that FERC’s approval was arbitrary and capricious and violated the principle of cost causation. Antero Res. Corp. v. FERC, --- F.4th ----, No. 24-1076, 2025 WL 2779324 (D.C. Cir. Sept. 30, 2025).
D.C. Cir. Says FERC Complied with NEPA and NGA in TVA Pipeline Approval. The D.C. Circuit denied petitions filed by environmental groups challenging FERC’s approval of a 32-mile pipeline serving a TVA gas turbine, holding that FERC’s environmental review and statutory determinations complied with NEPA and the Natural Gas Act. Sierra Club & Appalachian Voices v. FERC, --- F.4th ----, No. 24-1099, 2025 WL 2779345 (D.C. Cir. Sept. 30, 2025).
Fed. Ct. in Pa. Tackles Bonus Payment Claims. In a dispute over whether a lessee improperly failed to pay bonus for leases for a number of landowners, a federal court in Pennsylvania issued a mixed decision holding that, for some landowners, the parties never had an enforceable contract such that they could not recover unpaid bonus monies for the lease; and other landowners failed to demonstrate clear title such that the obligation to pay bonus never arose. Warner v. Shell Legacy Holdings, LLC, --- F. Supp. 3d ----, No. 1:19-CV-326, 2025 WL 2783702 (W.D. Pa. Sept. 30, 2025).
Fed. Ct. in Ohio Says Well Permit Doesn’t Preclude O+G Trespass Claims. A federal court in Ohio denied a motion to dismiss trespass, conversion, and unjust enrichment claims against a well operator that allegedly violated a depth limitation by tapping the Point Pleasant formation, rejecting the operator’s argument that the claims represent unlawful collateral attacks on ODNR’s drilling permits and holding instead that the tort claims derive from the parties’ oil and gas lease rather than state permits. Senterra Limited v. Rice Drilling D, LLC, --- F. Supp. 3d ----, No. CV 2:24-CV-3181, 2025 WL 2958658 (S.D. Ohio Oct. 20, 2025).
Ohio App. Ct. Says Plaintiff Must Initiate Arbitration Under Lease Terms. A court of appeals in Ohio affirmed a trial court's order directing the plaintiff to initiate arbitration proceedings, holding that the arbitration provision in the parties’ oil and gas lease, which states that “[e]ither party may initiate any arbitration proceeding,” required the party seeking relief (the plaintiff here) to initiate proceedings with the AAA and rejecting arguments previously considered and rejected in three prior cases involving similar lease language. Buckeye Boy Scout Foundation v. Encino Energy, LLC, --- N.E.3d ----, 2025-Ohio-4868, 2025 WL 2986511 (Ohio Ct. App. Oct. 23, 2025).
WV. Ct. App. Says MVP Stated Tort Claims Against Protesters. A court of appeals in West Virginia held that Mountain Valley Pipeline stated trespass and tortious interference claims against protesters but otherwise upheld the dismissal of various other claims, including a stand-alone request for punitive damages. Mountain Valley Pipeline, LLC v. Martha Ann Zinn, --- S.E.3d ----, No. 24-ICA-447, 2025 WL 3101007 (W. Va. Ct. App. Nov. 6, 2025).
Headlines & Holdings - Beyond Appalachia
D.C. Circuit Upholds Limited FERC Review of Cross-Border Pipeline Section. The D.C. Circuit upheld FERC’s decision to limit its environmental review of a Texas pipeline to a 1,000-foot segment near the U.S.–Mexico border, finding that the agency provided sufficient justification for not undertaking a broader review. Sierra Club v. FERC, --- F.4th ----, No. 24-1199, 2025 WL 2178519 (D.C. Cir. Aug. 1, 2025).
Fed. Ct. in Ark. Enjoins Enforcement of “Net Proceeds” Royalty Statute. A federal court in Arkansas preliminarily enjoined the Arkansas Oil & Gas Commission from retroactively enforcing a statute requiring that lessees pay mineral owners one-eighth of the “net proceeds” received from production, holding that the statute likely violates the state and federal Contract Clauses. Flywheel Energy Prod. LLC v. York, --- F. Supp. 3d ----, No. 4:25-CV-616-DPM, 2025 WL 2201374 (E.D. Ark. Aug. 1, 2025).
Tex. App. Ct. Transfers Venue in Dispute over O+G Lease Assignments. A court of appeals in in Texas transferred a dispute over oil and gas lease assignments to the county that includes the properties covered by the leases in accordance with state procedural rules, holding that the venue-selection clause in the assignment is unenforceable because the parties’ agreement is not a “major transaction” under state rules that require filing a lawsuit in a venue other than the county in which the properties are located. In re INEOS USA Oil & Gas LLC, --- S.W.3d ----, No. 13-25-00335-CV, 2025 WL 2222738 (Tex. App. Aug. 1, 2025).
Fed. Ct. in La. Says O+G Sublease Expired after Consecutive Production Gaps. A federal court in Louisiana held that a sublease expired when the last producing well on the leased premises ceased production for two separate 120-day periods without any meaningful efforts to resume operations. Olympia Minerals Leasing LLC v. J-Lu Ltd Co LLC, --- F. Supp. 3d ----, No. 2:22-CV-05754, 2025 WL 2246982 (W.D. La. Aug. 6, 2025).
CA5 Rejects Challenge to LNG Permit after Texas High Court Clarifies BACT. The Fifth Circuit upheld TCEQ’s decision to pass on imposing emissions limits on a new LNG facility, holding that under Texas law “best available control technology” – as interpreted by the state’s high court – cannot require methods that are not yet operational. Port Arthur Cmty. Action Network v. Tex. Comm’n on Env’t Quality, --- F. 4th ----, No. 22-60556, 2025 WL 2318680 (5th Cir. Aug. 12, 2025).
Tex. Bus. Ct. Remands Dispute over Produced Water. The Texas Business Court remanded a dispute involving a 2019 produced water delivery and disposal agreement, holding that the case didn’t meet the criteria for the business court’s jurisdiction. OWL AssetCo 1, LLC v. EOG Resources, Inc., --- S.W.3d ----, No. 25–BC11B–0027, 2025 Tex. Bus. 30, 2025 WL 2306527 (Tex. Bus. Ct. Aug. 11, 2025).
Fed. Cl. Ct. Says Gov. Didn’t Breach Fiduciary Duties to Tribes. The Court of Federal Claims held that the federal government did not breach its fiduciary duties to members of Native American Tribes owning property held in trust by the federal government by failing to prevent drainage of oil or gas reserves underlying the property in question, failing to ensure diligent oil/gas development, or failing to secure royalties for vented or flared gas in connection with well operations, holding instead that plaintiffs failed to prove the government’s alleged breaches cost the beneficiaries tens of millions in royalties. Birdbear v. United States, --- Fed. Cl. ----, No. 16-75L, 2025 WL 2371334 (Fed. Cl. Aug. 14, 2025).
Tex. App. Ct. Confirms ORRI Ownership. A court of appeals in Texas construed two assignments and related exhibits and held that one assignment unambiguously transferred overriding royalty interests and the other transferred the entire fee despite purported depth limitations. Thagard Min. P’ship, LP v. Cass, --- S.W.3d ----, No. 11-23-00207-CV, 2025 WL 2412837 (Tex. App. Aug. 21, 2025).
Tex. App. Ct. Says Trespass to Quiet Title Doesn’t Work for Non-Possessory Interests. A court of appeals in Texas held that trespass-to-try-title claims are not the appropriate method to recover a nonpossessory interest, such as royalty interests. Devon Energy Prod. Co., L.P. v. McClure Oil Co., Inc., --- S.W.3d ----, No. 11-23-00083-CV, 2025 WL 1657598 (Tex. App. Aug. 21, 2025).
ND Supremes Address NPRI Calculations. The North Dakota Supreme Court held that certain non-participating royalties interests should be recalculated to include a 2% royalty on all oil and gas produced from an entire tract of land and remanded for equitable accounting. Garaas v. Continental Res., Inc., --- N.W.3d ----, No. 20250046, 2025 WL 2471154 (N.D. Aug. 28, 2025).
D.C. Circ. Upholds DOI’s Leasing Program. The D.C. Circuit held that DOI’s decision-making for offshore leasing under the OCSLA met the reasoned-decision standard and rejected challenges brought by certain environmental groups to the five-year leasing program adopted by DOI. Healthy Gulf v. U.S. Dep’t of Interior, --- F.4th ----, No. 24-1024, 2025 WL 2486119 (D.C. Cir. Aug. 29, 2025).
D.C. Circ. Says EPA Termination of GHG Reduction Funds is OK. The D.C. Circuit vacated a district-court injunction that ordered EPA to continue funding $16 billion in grants to green nonprofit groups, holding the grantees were unlikely to prevail because their claims are essentially contractual and thus belong in the Court of Federal Claims. Climate United Fund v. Citibank, N.A., --- F.4th ----, No. 25-5122, 2025 WL 2502881 (D.C. Cir. Sept. 2, 2025).
Fifth Circ. Says Offshore Platform Services Contract is not Maritime. The Fifth Circuit concluded that a master services contract governing services at an offshore oil-and-gas platform is not maritime in nature and therefore Louisiana law applies and nullifies an indemnity provision within the contract the appellant sought to enforce. Offshore Oil Servs., Inc. v. Island Operating Co., Inc., --- F.4th ----, No. 24-30674, 2025 WL 2541914 (5th Cir. Sept. 4, 2025).
Tenth Circ. Says Quiet Title Act Applies to Drill-Through Dispute. In a dispute in which a company sought to drill from the surface estate of its affiliated company through some federal minerals to access an adjacent subsurface estate, the Tenth Circuit held that the company’s challenge to BLM’s requirement of a permit for the proposed drill-through activity must have been brought under the Quiet Title Act rather than the APA. Consequently, the court resolved the appeal on jurisdictional grounds without reaching the merits. True Oil, LLC v. Bureau of Land Mgmt., --- F.4th ----, No. 23-8082, 2025 WL 2600137 (10th Cir. Sept. 9, 2025).
Tex. App. Ct. Says Lessor Can Bury Pipelines as Self-Help but without Cost Reimbursement. In a dispute over a company’s delays in burying flow lines to plow depth as required by a lease, a court of appeals in Texas held that the landowner could exercise self-help and bury the line herself but could not recover the costs. Byrne Oil Co. v. Walraven, --- S.W.3d ----, No. 11-23-00157-CV, 2025 WL 2617716 (Tex. App. Sept. 11, 2025).
Fed. Ct. in Colo. Dismisses Challenge to NatGas Appliance Ban. A federal court in Colorado concluded that constitutional and preemption challenges to the City of Denver’s natural-gas appliance standards were not ripe, holding that the “fitness” and “hardship” factors in the analysis weigh against adjudication. Sierra Club v. City & County of Denver, --- F. Supp. 2d ----, No. 24-cv-01862-PAB-KAS, 2025 WL 2652871 (D. Colo. Sept. 16, 2025).
Tex. Biz Ct. Says NAESB TCs are Part of an Integrated Gas Purchase Transaction. The Texas Business Court concluded that the seller’s and buyer’s competing transaction confirmations (“TCs”) pursuant to a standard NAESB contract form for the sale of natural gas did not materially conflict with one another such that the TCs and NAESBs form one integrated agreement and neither TC overrides the other. Marathon Oil Co. v. Mercuria Energy America, LLC, --- S.W.3d ----, No. 25-BC11A-0013, 2025 Tex. Bus. 36, 2025 WL 2675794 (Tex. Bus. Ct. Sept. 18, 2025).
D.C. Circ. Says FERC Enforcement Decision Unreviewable. The D.C. Circuit held that FERC’s decision to refrain from taking enforcement action – allowing a project sponsor to construct and operate a pipeline to an emergency Army Corps generator while FERC reviewed licensing – is an unreviewable exercise of enforcement discretion. El Puente de Williamsburg, Inc.-Enlace Latino de Accion Climatica, Inc. v. FERC, --- F.4th ----, No. 23-1333, 2025 WL 2679775 (D.C. Cir. Sept. 19, 2025).
Tex. App. Ct. Says O+G Title Claim not Barred by Res Judicata. A court of appeals in Texas disagreed that the resolution of title to certain mineral interests at issue in the case were subject to previous litigation and therefore reversed a trial court order holding that res judicata barred this title dispute. Ridgefield Permian Mins., LLC v. DOH Oil Co., --- S.W.3d ----, No. 08-25-00081-CV, 2025 WL 2783562 (Tex. App. Sept. 30, 2025).
La. App. Ct. Scraps Mandatory Injunction against ETC that Prevents Pipeline Work. In a dispute between pipeline companies, one operated by ETC and another proposed by Gateway that will underlie ETC’s, a court of appeals in Louisiana reversed a mandatory injunction that prevented ETC from “taking any action that impedes, interferes with, or obstructs the construction, operation, or maintenance” of Gateway’s pipeline. ETC Texas Pipeline, Ltd. v. Louisiana Energy Gateway, LLC, --- So.3d ----, No. 56,493, 2025 WL 2787556 (La. App. 2 Cir. Oct. 1, 2025).
Tex. App. Ct. Says Drainage Covenant Claim not covered by TCPA. A court of appeals in Texas denied a motion to dismiss a claim under the Texas Citizens Participation Act, concluding that a plaintiff’s claim for breach of the implied covenant to protect against drainage was not “based on” or “in response to” a drilling-permit application filed by the lessee with the Railroad Commission and therefore not subject to dismissal under the TCPA. EOG Resources, Inc. v. CNH Enterprise Holdings, Ltd., --- S.W.3d ----, No. 04-24-00160-CV, 2025 WL 2807775 (Tex. App. Sept. 30, 2025).
Indiana Ct. Says Rule of Capture Precludes Coalbed Methane Drainage Claims. A court of appeals in Indiana concluded that the rule of capture precluded a production company’s claims that a nearby coalbed-methane operation drained methane from the plaintiff’s leasehold, reasoning that Indiana is an exclusive-right state such that no one owns underlying oil and gas given its fugacious nature and that the plaintiff failed demonstrate any physical invasion into the subsurface such that the rule of capture precluded claims for drainage damages. Pioneer Oil Co., Inc. v. ECC Bethany, Inc., --- N.E.3d ----, No. 24A-PL-2878, 2025 WL 2858581 (Ind. Ct. App. Oct. 9, 2025).
Tex. App. Ct. Says O+G Deed Fails the Statute of Frauds. A court of appeals in Texas concluded that a deed purporting to convey a one-half interest in oil, gas, and minerals that may be found in “any part of” a tract of roughly 2,100 acres lacked an adequate legal description of property sufficient to comply with the statute of frauds. Alcott v. 1893 Oil & Gas, Ltd., --- S.W.3d ----, No. 13-23-00492-CV, 2025 WL 2858113 (Tex. App. Oct. 9, 2025).
Tex. App. Ct. Says Absent Mineral Owners are Necessary Parties in O+G Title Dispute. A court of appeals in Texas held that absent parties claiming an interest in oil, gas, and minerals at issue in a title dispute are necessary parties because any judgment could implicate the their interests without giving them an opportunity to defend their title and, accordingly, affirmed a trial court’s decision to dismiss the case after the plaintiff failed to join those necessary parties despite having a reasonable opportunity to do so. Norman Ross Becken et al. v. 1893 Oil & Gas, Ltd. & ELP2 Minerals, LLC, --- S.W.3d ----, No. 13-23-00491-CV, 2025 WL 2858111 (Tex. App. Oct. 9, 2025).
Tex. Biz Ct. OK’s NatGas Seller’s Force Majeure Declaration in Uri Fight. In a dispute arising from Winter Storm Uri, the Texas Business Court held that a natural gas sales contract did not obligate the seller to purchase gas on the spot market to cover production shortfalls or to buy back its delivery obligation as a prerequisite or alternative to declaring force majeure or as a contractually required "reasonable effort." Marathon Oil Co. v. Mercuria Energy America, LLC, --- S.W.3d ----, Cause No. 25-BC11A-0013, 2025 Tex. Bus. 39, 2025 WL 2926758 (Tex. Bus. Ct. Oct. 14, 2025).
Fed. Ct. in Tex Also OK’s Force Majeure Declaration in Uri Fight. A federal court in Texas held that a natural gas seller did not breach its contract by failing to deliver 20,000 MMBtu of natural gas during Winter Storm Uri, concluding that Uri was a force majeure event in the contract and the seller exercised due diligence to make reasonable efforts to avoid the adverse impacts of the storm. MIECO LLC v. Pioneer Natural Resources USA Inc., --- F. Supp. 3d ----, No. 3:21-CV-1781-B, 2025 WL 2933076 (N.D. Tex. Oct. 15, 2025).
Mont. Fed. Ct. Scraps Kids’ Challenge to Trump EOs. A federal court in Montana dismissed a lawsuit brought by a group of youths challenging President Donald Trump’s energy-related emergency orders, concluding that federal courts do not have the authority to determine U.S. environmental and energy policy. Lighthiser v. Trump, --- F. Supp. 3d ----, No. CV 25-54-BU-DLC, 2025 WL 2930569 (D. Mont. Oct. 15, 2025).
Fifth Circuit Says Insurer has Duty to Defend in O+G Well Loss. In a case involving recovery of losses stemming from a bad cement job, the Fifth Circuit reversed a magistrate judge’s dismissal of the well operator’s duty-to-defend and duty-to-indemnify claims and holding that the plaintiff adequately pled facts stating those claims but upheld the dismissal of the operator’s common-law bad-faith claims under Texas law. BPX Production Company v. Certain Underwriters at Lloyd's London, --- F.4th ----, No. 23-20034, 2025 WL 2952911 (5th Cir. Oct. 20, 2025).
Fed. Ct. in N.D. Strikes “Negative Gas Royalty” Subclass. In a case alleging that an oil and gas lessee breached royalty clauses in leases when post-production costs exceed revenues for royalty payments, a federal court in North Dakota struck a proposed “negative gas royalty” subclass on the pleadings, holding that the subclass plaintiffs could not satisfy typicality and predominance requirements for class actions. Ronald Penman & Adelante Oil & Gas, LLC v. Hess Bakken Investments II, LLC, --- F. Supp. 3d ----, No. 1:22-CV-097, 2025 WL 2962575 (D.N.D. Oct. 20, 2025).
Tex. App. Ct. Says No Royalty Underpayment or Cotenant Accounting Damages. A court of appeals in Texas affirmed a jury verdict in favor of an operator on landowners' claims for royalty underpayment and mineral cotenant accounting, holding that the operator paid royalties in accordance with the lease agreement and, although the operator failed to account as mineral cotenants for certain production from wells, the jury concluded that the cotenants suffered no damages either because they didn’t meet their burden of proof. Evans Resources, L.P. v. Diamondback E&P, LLC, --- S.W.3d ----, No. 11-24-00107-CV, 2025 WL 2980661 (Tex. App. Oct. 23, 2025).
Texas Bus. Ct. Sends Back Force Majeure Dispute. The Texas Business Court held that fact issues precluded the court from determining whether a liquidated-damages clause in the parties' NAESB is an unenforceable penalty given the gap between the NAESB’s measure of damage and the plaintiff’s actual damages. The court also held that, under the circumstances of the case, the defendant's cost-basis theory of damages is not the correct measure and remanded for further proceedings. Marathon Oil Co. v. Mercuria Energy America, LLC, --- S.W.3d ----, 2025 Tex. Bus. 40, 2025 WL 3018176 (Tex. Bus. Ct. Oct. 28, 2025).
Tex. Supremes Reject Res Judicata for Unripe Subsurface Trespass Claims. In a Lightning-Oil type of dispute – one involving an oil and gas lessee’s claims for subsurface trespass by another – the Texas Supreme Court held that res judicata cannot bar the suit (as the court of appeals concluded) based on a prior surface-injury claim when the lessee’s subsurface claims are not ripe and could not have been brought earlier. Ageron Energy, LLC v. ETC Texas Pipeline, Ltd., --- S.W.3d ----, No. 24-0200, 2025 WL 2025 WL 3038997 (Tex. Oct. 31, 2025).
Tex. Ct. App. Addresses Mineral vs. Royalty Distinction in Reservation. The Texas Court of Appeals resolved inconsistent language in a mineral reservation by holding that each grantor reserved a 1/4 mineral interest stripped of all rights except for the right to royalty payments equal to 1/4 of the lease royalty, affirming in part and reversing in part the trial court's judgment on whether the grantors retained participation in bonus and delay rentals or executive and development rights. Kevin P. Karl v. James W. Dobbs, --- S.W.3d ----, No. 08-24-00063-CV, 2025 WL 3039609 (Tex. App. Oct. 30, 2025).
Tex. Ct. App. Says No Seismic Testing Absent Permit. A court of appeals in Texas held that a separate surface use agreement between an oil and gas company and its lessor granting permission to conduct seismic operations on the surface “only after” they mutually agreed to a seismic surface use permit constituted a valid condition precedent that never occurred and therefore precluded seismic operations. Endeavor Natural Gas III, LLC v. Comanche Maverick Ranch Investments, L.P., --- S.W.3d ----, No. 14-24-000639-CV, 2025 WL 3072694 (Tex. App. Nov. 4, 2025).
Fed. Ct. in Tex. Says NM Oilfield Anti-Indemnity Act Bars Indemnification. A federal court in Texas held that, after a choice-of-law analysis, New Mexico’s Oilfield Anti-Indemnity Act barred a production company’s claim that its MSA with its service company required defense and indemnification in connection with injuries sustained by the service company’s employee. ConocoPhillips Company v. Totem Well Service, LLC, --- F. Supp. 3d ----, No. 4:23-CV-3383, 2025 WL 3101793 (S.D. Tex. Nov. 6, 2025).
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