At the Well Weekly (v.6.26.2026)
- George A. Bibikos
- Jun 30
- 19 min read
Oil + Gas Update: Royalties, Overrides, and Statutory Pooling Lead Mid-2026 Docket.
Since our last report, natural gas hovered around $3/MMBtu alongside volatile oil prices driven by continued conflict in the Middle East, while the rig count rose modestly.
In Appalachia, courts addressed post-production cost deductions and the gist-of-the-action doctrine in royalty fraud and conversion claims; severance-tax valuation reflecting transportation and processing costs; construction of assignments conveying overriding royalty and net-profits interests; deed construction and the creation of mineral reservations; statutory pooling and unitization, including whether unitization orders create enforceable contract rights and who may challenge them; surface-access injunctions against landowners interfering with well operations; the enforceability of arbitration clauses in expired leases; trespass litigation targeting the Point Pleasant formation; state preemption of local zoning of well operations; and pipeline-construction stay denials under the Clean Water Act.
In other regions, courts addressed post-production cost deductions on federal and private leases, including value-enhancement exceptions, lease riders barring deductions, and statutory interest; class certification in a royalty settlement dispute; fixed-versus-floating royalty construction and the presumed-grant doctrine; the conveyance, refund, washout, and bankruptcy treatment of overriding royalty interests; allocation of lease operating expenses among working-interest owners; extrinsic evidence in farmout payout disputes; federal-officer removal in coastal pollution suits; climate-change litigation, including standing and Clean Air Act displacement of state deceptive-marketing claims; federal lease-sale challenges under NEPA and FLPMA; and the FAA transportation-worker exemption and arbitration waiver.
Rig Counts, Spot Prices + Oil Prices
Rigs: National (🔺573); Marcellus (24); Utica/Point Pleasant (12)
Brent Crude: 🔻~$72.00/bbl
West Texas Intermediate: 🔻~$68.86/bbl
NYMEX: July 2026 @ 🔺~$3.29/MMBtu; 12-Month Strip @ 🔺~$3.42/MMBtu
Spot Prices: Henry Hub @ 🔺~$3.16/MMBtu; Appalachian Regional Avg. @ ~$2.30/MMBtu
U.S. Natural Gas Storage: 2,835 Bcf (+76 Bcf, national).
Headlines & Holdings - Appalachia
Sixth Circuit Says Landowner on the Hook for Interfering with Gas Wells. In a breach of contract dispute, the Sixth Circuit affirmed a $108,000 jury verdict in favor of a natural gas producer against a Kentucky landowner who shut off three wells on her property and barred company employees from accessing them, holding that the weight of the evidence supported the jury’s verdict and rejecting the plaintiff’s counterclaim for road-improvement reimbursements under a maintenance of easement theory. K. Petroleum, Inc. v. Hubacek, --- F.4th ----, No. 25-5759, 2026 WL 1047121 (6th Cir. Apr. 17, 2026).
Fourth Circuit Untangles ORRI, Net-Profits Interests in Assignment Dispute. In a dispute over assignment of certain royalty and net-profits interests in West Virginia, the Fourth Circuit held that an assignment broadly conveyed all the assignors’ right, title, and interest in the certain oil and gas leases without any exception or reservation under West Virginia law such that a trust had no claim to overriding royalty interests in several leases but otherwise vacated and remanded as to other leases to resolve a dispute over a remaining 1/64 net profits interest. McArdle Family P’ship v. Antero Resources Corp., --- F.4th ----, No. 25-1624, 2026 WL 1068674 (4th Cir. Apr. 20, 2026).
WV Supremes Uphold O+G Severance Tax Refund for PPCs Incurred. In consolidated severance tax appeals, the Supreme Court of Appeals of West Virginia held that the gross value of natural gas produced by the operator in West Virginia for tax years 2014, 2016, 2018, and 2019 should reflect deductions for actual transportation, transmission, and processing costs and upheld a refund for those amounts for those tax years. Statoil USA Onshore Properties Inc. v. Irby, --- S.E.2d ----, No. 23-760, 2026 WL 1194787 (W. Va. May 1, 2026).
Ohio Supremes Say ODNR’s Suspension of Saltwater Injection Wells after Earthquakes is not a Taking. In a regulatory takings case arising from oil and gas wastewater disposal, the Supreme Court of Ohio held that the State’s temporary suspension of two saltwater-injection wells following two 2014 earthquakes attributed to those wells did not amount to either a total or a partial regulatory taking under the Penn Central framework, affirming the appellate court’s rejection of the total-takings claim, reversing its finding of a partial taking, and denying a writ of mandamus that would have required the State to initiate property-appropriation proceedings. State ex rel. AWMS Water Solutions, L.L.C. v. Mertz, --- N.E.3d ----, No. 2024-1433, 2026 WL 1161052 (Ohio Apr. 29, 2026).
Fed. Ct. in Ohio Rules on In Limine Motions in Utica/Point Pleasant Trespass Case. In a long-running case alleging trespass by targeting the Point Pleasant formation, a federal court in Ohio issued an omnibus order on both parties’ motions in limine addressing a wide range of potential evidence about the operator, industry use of “Utica Shale” and “Point Pleasant” and their understood meanings, bad-faith presumptions at common law, and expert testimony. J&R Passmore, LLC v. Rice Drilling D, LLC, No. 2:18-CV-1587, 2026 WL 1361500 (S.D. Ohio May 15, 2026).
Fed. Ct. in Ohio Says ODNR Unitization Orders are not Contracts. In a statutory pooling dispute, a federal court in Ohio held that (a) unitization orders issued by ODNR under Ohio Revised Code § 1509.28 are not contracts between the unit operator and unleased mineral owners whose interests are pooled within the unit; and (b) a mineral owner has no private right of action to sue for breach of contract for failure to pay royalties pursuant to the order. Vranish v. Gulfport Appalachia, LLC, --- F. Supp. 3d ----, No. 2:26-CV-71, 2026 WL 1295356 (S.D. Ohio May 12, 2026).
Ohio Supremes Say WI Option Holder Lacks Standing to Challenge Pooling Order. In a dispute over statutory pooling, the Ohio Supreme Court held on reconsideration that an entity holding a contractual option to acquire a working interest, but not a present working interest, lacked standing to appeal a unitization order issued by the Division of Oil and Gas Resources Management, reasoning that the order neither extinguished the option nor clouded title because the entity owned no working interest at the time of issuance. Eric Petroleum Corp. v. Vendel, --- N.E.3d ----, 2026-Ohio-1821, 2026 WL 1413185 (Ohio May 20, 2026).
Texas Ct. App. Says Deed Reserved Mineral Interest. In a dispute over whether a deed reserved a fixed royalty interest or a floating mineral interest, a Texas appellate court construed a century-old deed as reserving a 1/32 non-executive mineral interest with a floating royalty tied to leases, rather than a fixed 1/32 non-participating royalty, and rejected the successors’ invocation of the presumed-grant doctrine and equitable defenses despite decades of payment treating the interest as fixed. The dissenting justice would have applied the presumed-grant doctrine to hold that the the deed reserved a fixed 1/32 royalty interest. B.H.C.H. Mineral, Ltd. v. Needmore Minerals, LLP, --- S.W.3d ----, No. 04-24-00382-CV, 2026 WL 1430702 (Tex. App. May 20, 2026).
Fourth Circuit Denies Bid to Stop Pipeline Construction Pending Permit Appeal. In a dispute over a Section 404 permit issued by the Army Corps of Engineers under the Clean Water Act, a federal appellate court denied environmental groups’ request for a stay pending appeal of construction on Southeast Supply Enhancement Project, concluding the challengers had not shown a likelihood of success on their argument that the Army Corps’ discharge permit was arbitrary and capricious. Haw River Assembly v. U.S. Army Corps of Engineers, No. 26-1470 (4th Cir. May 18, 2026).
Va. Supremes Say Inflated Assessed Value of Minerals. In a tax assessment dispute involving the value of minerals, the Virginia Supreme Court held that a county assessor must value and assess lands “improved and under development” – meaning the underlying gas reserves in connection with physical well pads, pipes, etc. – when assessing mineral lands under Va. Code § 58.1-3286. The court rejected the county’s attempt to value the mineral estate based solely on the value of the cost of wells and related gas infrastructure (approximately $104-$134 million) without considering the present cash flow that the reserves could generate based on gas market realities (approximately $22-33 million). EQT Production Co. v. County of Wise, --- S.E.2d ----, No. 250430, 2026 WL 1424146 (Va. May 21, 2026).
Ohio Ct. App. Won’t Enforce Arbitration Clause in Allegedly Expired O+G Lease. In a case alleging trespass after an oil and gas lease allegedly expired, an Ohio appellate court denied the lessee’s motion to compel arbitration, holding that an arbitration provision in an allegedly expired lease did not govern any post-lease-expiration trespass and conversion claims when the leases contain no survival clause and the right to drill did not survive lease expiration. Stingle v. Ascent Res.-Utica, LLC, --- N.E.3d ----, No. 25 JE 0020, 2026 WL 1481929 (Ohio Ct. App. May 20, 2026).
W. Va. Supremes Say State Law Doesn’t Preempt Local O+G Zoning Ordinance. In a zoning dispute, West Virginia’s high court held that a local ordinance did not irreconcilably conflict with the state’s Natural Gas Horizontal Well Control Act, holding that the overlap between the DEP’s authority over well operations and the city’s land-use authority was merely incidental. City of Weirton v. SWN Prod. Co., --- S.E.2d ----, No. 23-753, 2026 WL 1584498 (W. Va. June 3, 2026).
Ohio Ct. App. Upholds Injunction Against Landowners Blocking O+G Activities. In a trespass action by an operator against new landowners who bought their property subject to a lease, a court of appeals in Ohio upheld magistrate judge orders compelling the landowners to remove obstructions on the surface and stop interfering with the operator’s access to its wells, holding that the landowners forfeited any objections to the magistrate’s findings by failing to file objections. Diamond Energy Partners, L.L.C. v. Stout, --- N.E.3d ----, No. 2025-P-0051, 2026-Ohio-2252, 2026 WL 1726398 (Ohio Ct. App. June 15, 2026).
Ohio Ct. App. Says 1977 Deed Created New Mineral Reservation. In a dispute over mineral rights, a court of appeals in Ohio held that a 1977 deed excepting “all minerals, coal, oil and gas” created a new reservation in the grantors rather than reciting an already-extinguished 1902 reservation. D S C Enterprises, L.L.C. v. Ascent Resources-Utica, L.L.C., --- N.E.3d ----, No. 25 JE 0026, 2026-Ohio-2272, 2026 WL 1736160 (Ohio Ct. App. June 16, 2026).
Fed. Ct. in W. Va. Says Gist-of-the-Action Doctrine Does Not Bar Royalty Owner’s Fraud and Conversion Claims. In a dispute over royalties and post-production costs, a federal court in West Virginia concluded that the gist-of-the-action doctrine does not bar the royalty owner’s fraud and conversion claims arising from a producer’s alleged improper deduction of post-production costs from royalties in violation of the lease, reasoning that the alleged tortious behavior is separate from the lease relationship and stating as follows: “[T]he mere fact that the parties in this case have a contract with each other should not, as a blanket rule, preclude liability for fraud or conversion where defendants are alleged to be cheating plaintiff out of royalty payments to which he is entitled and taking convoluted steps to hide that fact. To limit plaintiff solely to contractual damages would run the risk of leaving him without a remedy capable of making him truly whole.” Leonetti v. SWN Production Co., --- F. Supp. 3d ----, No. 5:22-CV-35, 2026 WL 1759205 (N.D. W. Va. June 18, 2026).
Fed. Ct. in W. Va. Tosses Suit Challenging Data Center Project. In a challenge to a proposed energy and data center development, a federal court in West Virginia dismissed claims against the U.S. Army Corps of Engineers, the U.S. Fish & Wildlife Service, and FERC, holding that the plaintiffs failed to establish standing and subject-matter jurisdiction over the federal agencies given the lack of any final agency action. Hatfield v. TransGas Dev. Sys., LLC, --- F. Supp. 3d ----, No. 3:25-cv-0714, 2026 WL 1783840 (S.D. W. Va. June 22, 2026).
Headlines & Holdings - Beyond Appalachia
Tex. App. Ct. Says AMI Claim Time-Barred. In a breach of contract dispute arising under an AMI, a Texas court of appeals held that the applicable four-year statute of limitations barred the plaintiffs’ claim arising as of the date of the acquisition and assignment of the mineral interests at issue. Compadre Royalty, LLC v. Jefe Interests, LLC, --- S.W.3d ----, No. 05-24-00172-CV, 2026 WL 992192 (Tex. App. Apr. 13, 2026).
Tex. App. Ct. Upholds Election to Participate in Fractionation Unit. In a joint venture dispute over NGL fractionation assets, a Texas court of appeals held that a restated operating agreement (“ROA”) governing the parties’ joint venture permitted expansions beyond the physical boundaries of the original project site and that a joint venturer validly accepted an offer to become a non-participating owner of the fractionation unit. Mont Belvieu Caverns, LLC v. DCP Partners MB II LLC, --- S.W.3d ----, No. 14-25-00085-CV, 2026 WL 1004270 (Tex. App. Apr. 14, 2026).
SCOTUS Applies Federal Officer Removal Statute in Pollution Suit against Majors. The U.S. Supreme Court held that pollution claims against Exxon and Chevron in Louisiana should be heard in federal court, holding that crude oil production in coastal zones during World War II “related to” performance of the companies’ duties under contract with the federal government to produce aviation gas for the military’s war efforts as required to satisfy requirement of federal officer removal statute. Chevron USA Inc. v. Plaquemines Par., Louisiana, --- U.S. ---, No. 24-813, 2026 WL 1040461 (U.S. Apr. 17, 2026).
Hawaii Judge Says Feds Can’t Block State from Bringing Climate Change Lawsuits. A Hawaii federal judge dismissed a U.S. government lawsuit seeking to prevent the state from suing oil and gas companies over climate change, holding that the feds lacked standing. United States v. Hawaii, --- F. Supp. 3d ----, No. CV 25-00179 HG-WRP, 2026 WL 1021227 (D. Haw. Apr. 15, 2026).
Texas Supremes Send Back Fixed vs. Floating Royalty Dispute. In a dispute over a 1933 deed reserving “an undivided one-fourth (1/4th) of the usual one eighth (1/8th) royalty,” the Texas Supreme Court held that the court of appeals had jurisdiction in a permissive interlocutory appeal to consider the presumed-grant defense and remanded to consider that defense in the context of deciding whether the reservation created a fixed vs. floating royalty. Boren Descendants v. Fasken Oil & Ranch, Ltd., --- S.W.3d ----, No. 25-0010, 2026 WL 1108688 (Tex. Apr. 24, 2026).
Tenth Circuit Says DOI Arbitrarily Disallowed $2.8 Million in PPC Deductions. In a royalty dispute with the federal government, the Tenth Circuit held that the Office of Natural Resources Revenue acted arbitrarily and capriciously when it ordered a lessee to pay roughly $2.8 million for disallowed transportation and processing deductions taken on federal gas leases for 2004-2008 without considering the effect of a prior settlement agreement between the agency and a related entity that had established formulas for calculating allowable deductions. Devon Energy Production Co., L.P. v. United States Department of the Interior, --- F.4th ----, No. 24-6132, 2026 WL 1129072 (10th Cir. Apr. 27, 2026).
Fed. Ct. in La. Says Operator Gets Lease Operating Expenses. In an accounting dispute between working-interest owners, a federal court in Louisiana concluded that the operator is entitled to “lease operating expenses” from non-operating entities and rejected claims that language in the operating agreements released the non-operating entities’ obligations. ANKOR Energy, LLC v. Merit Management Partners I, L.P., --- F. Supp. 3d ----, No. CV 24-1953, 2026 WL 1179137 (E.D. La. Apr. 30, 2026).
Texas Biz Court Says No Course-of-Performance Evidence in Farmout Dispute. In a farmout dispute over reversionary back-in interests, the Texas Business Court rejected “course of performance” evidence such as internal reports, records, and emails to support the plaintiffs’ contention that payout is calculated on a well-by-well basis, holding that the unambiguous farmout agreement is reasonably susceptible to only one meaning under established Texas contract-construction rules and therefore precludes consideration of extrinsic course-of-performance evidence. May v. INEOS USA Oil & Gas LLC, --- S.W.3d ----, No. 25-BC04B-0007, 2026 Tex. Bus. 20, 2026 WL 1195929 (Tex. Bus. Ct. May 1, 2026).
Wash App. Ct. Says Climate Change Case Survives Dismissal. In a climate change case brought by two coastal tribes seeking compensation and an abatement fund for sea-level rise and other climate-related harms, a Washington state appeals court denied motions by the majors to dismiss state-law deceptive marketing claims, holding that the Clean Air Act does not displace state-law deceptive marketing claims. Shoalwater Bay Indian Tribe v. Exxon Mobil Corp., --- P.3d ----, Nos. 23-2-25216-1 & 23-2-25215-2 (King Cnty. Super. Ct. Apr. 29, 2026).
Tenth Circuit Says Class Action is Proper to Resolve Royalty Settlement Dispute. In a royalty dispute, the Tenth Circuit reversed a denial of class certification in a suit alleging that lessees breached a 2008 settlement governing post-2008 deduction limits on gas royalties, holding that under Cline v. Sunoco, 159 F.4th 1171, 1194 (10th Cir. 2025), which rejected an “administrative feasibility” requirement for class certification, the proposed royalty owner class is ascertainable with reasonable (not perfect) accuracy and satisfies Rule 23(a) and (b)(3) without class-wide proof of standing or title. Rider v. OXY USA, Inc., --- F.4th ----, No. 25-3142, 2026 WL 1218374 (10th Cir. May 5, 2026).
Tex. Ct. App. Says Interstate Pipeline Tech Exempt from Arbitration Under FAA. In a wrongful-death and personal-injury arbitration, a Texas appellate court held that a worker who maintained and repaired valves on interstate natural-gas pipelines belongs to a class of “transportation workers” exempted from the Federal Arbitration Act under § 1, that the parties’ agreement to apply the FAA does not eliminate that threshold legal question, and that a broad delegation clause does not commit the exemption issue to the arbitrator even though all other arbitrability questions go to the arbitrator. Energy Transfer LP v. Purland, --- S.W.3d ----, No. 14-25-00110-CV, 2026 WL 1216766 (Tex. App.—Houston [14th Dist.] May 5, 2026).
N.D. Supremes Tackle Yellowstone River Mineral Ownership. In a quiet-title action involving lands near the Yellowstone River, the North Dakota Supreme Court held that the state does not own the “North Island” — formed by an “avulsive event” that changed the river’s course rather than accretion — but reversed as a matter of law the lower court’s ruling that the state does not own the “West Bank,” holding that those interests were not included in the state’s earlier conveyance of government lots on the opposite side of the river. State ex rel. N.D. State Eng’r v. Leland, 2026 ND 99, --- N.W.3d ----, No. 20250328, 2026 WL 1251362 (N.D. May 7, 2026).
Fed. Ct. in Tex. Says Royalty is Mostly Free of PPCs Except for Enhancement Activities. In a royalty dispute, a federal court in Texas held that the plaintiff’s “royalty share” based on the price received is generally “free of post-production costs” and therefore certain costs must be added back before paying royalty per Devon Energy vs. Sheppard, but the lessee may deduct other costs such as taxes and the “costs of construction, operation or depreciation of any plants or other facilities or equipment for processing or treating” minerals, so long as those costs “result in enhancing the value of the marketable oil, gas or other products to receive a better price.” Gringita, Ltd. v. INEOS USA Oil & Gas, L.L.C., --- F. Supp. 3d ----, No. SA-25-CA-00595-XR, 2026 WL 1329914 (W.D. Tex. May 8, 2026).
Tex. Supremes Confirm Jurisdiction in Dispute Over WV Mineral Rights. In a suit to enforce an alleged agreement to convey West Virginia mineral interests, the Texas Supreme Court held that a Texas court with personal jurisdiction over the defendants does not lack subject-matter jurisdiction over the case simply because the underlying real property is located in another state, reasoning that an in personam judgment compelling a contractually obligated party to convey out-of-state land has long been within the equitable power of Texas courts. Braxton Minerals III, LLC v. Bauer, --- S.W.3d ----, No. 24-0438, 2026 WL 1354753 (Tex. May 15, 2026).
Tex. Bank. Ct. Grapples with ORRIs. In an ORRI dispute arising from an oil and gas debtor’s bankruptcy, a bankruptcy court in Texas held that consulting agreements purporting to convey overriding royalty interests contained sufficient present intent to satisfy the Texas statute of conveyances but failed to identify the ORRIs with reasonable certainty under the Texas statute of frauds such that a remand is necessary to determine any exceptions. The court also concluded that any ORRIs conveyed would not be excluded from the bankruptcy estate as a “farmout” under § 101(21A) but would be protected from avoidance by the trustee’s inquiry notice and reasonably equivalent value. In re Barrow Shaver Resources Co., LLC, --- B.R. ----, No. 24-33353, 2026 WL 1399325 (Bankr. S.D. Tex. May 18, 2026).
Fed. Ct. in D.C. Says EIS Redo Doesn’t Moot Out Gulf Lease Sale Challenge. In a challenge to an offshore oil and gas lease sale, a federal district court in D.C. held that a court-ordered supplemental EIS prepared by the Bureau of Ocean Energy Management did not render moot the environmental groups’ challenge, but the court stopped short of invalidating the EIS or the lease sales as requested and instead remanded without vacatur. Healthy Gulf v. Burgum, --- F. Supp. 3d ----, No. 23-CV-604 (APM), 2026 WL 1430514 (D.D.C. May 21, 2026).
Ninth Circuit Says No Federal Preemption of Alaska Well-Data Disclosure Statute. In a regulatory disclosure dispute, a federal appeals court held that federal law does not preempt an Alaska statute requiring the state’s oil and gas conservation commission to release well data, holding that federal law neither expressly preempts the statute nor reflects a congressional purpose the statute would obstruct. ConocoPhillips Alaska, Inc. v. Alaska Oil & Gas Conservation Comm’n, --- F.4th ----, No. 23-35512, 2026 WL 1477823 (9th Cir. May 27, 2026).
Fed. Ct. in Tex. Construes Disputed Terms in Wellhead-Greasing Patent Case. In a patent infringement suit over a remote greasing system for wellhead equipment, a federal court in Texas assigned a plain and ordinary meaning to disputed terms “grease trunk line” and to “manual controls including buttons or dials,” while construing “hazardous zone” as the unsafe area around the wellhead or frac manifold based on anticipated operating conditions. Cactus Wellhead, LLC v. Cameron International Corp., --- F. Supp. 3d ----, No. 2:24-CV-01010-JRG, 2026 WL 1482756 (E.D. Tex. May 27, 2026).
Fifth Circuit Says No Arbitration in O+G Confidentiality Dispute. In a dispute over disclosure of confidential information about a wastewater treatment system, the Fifth Circuit upheld an order denying motions to compel arbitration, holding that the defendants waived their arbitration rights by substantially invoking the judicial process. Global Advantech Resources Ltd. v. Brown, --- F.4th ----, No. 25-20413, 2026 WL 1483966 (5th Cir. May 27, 2026).
Tex. Ct. App. Declines to Recognize “Bad-Faith Washout” Claim by ORRI Holder. In a dispute over a washout of overriding royalty interests, a Texas appellate court declined to recognize, for the first time, a common-law bad-faith washout claim by an overriding royalty interest holder, holding that the lessee generally has no special duty to the owner of an ORRI to keep a lease alive absent lease language or other special relationship, and this lease’s surrender clause did not impose an implied duty of good faith in surrendering the lease. Craddick v. Cimarex Energy Co., --- S.W.3d ----, No. 08-24-00010-CV, 2026 WL 1500933 (Tex. App. May 28, 2026).
Ninth Circuit Says Kids Lack Standing to Challenge Trump Energy Orders. In a climate-change case, a federal appeals court held that young plaintiffs lacked Article III standing to challenge executive orders promoting fossil-fuel development, reasoning that their alleged injuries are not fairly traceable to the orders and that enjoining the agencies would not remedy those addressed injuries because the agencies could pursue similar, lawful actions under authorities other than the executive orders. Lighthiser v. Trump, --- F.4th ----, No. 25-6714, 2026 WL 1555982 (9th Cir. June 2, 2026).
La. Supremes Extend Subsequent-Purchaser Rule to Mineral Leases. In a legacy oilfield-contamination dispute, the Louisiana Supreme Court held that the subsequent-purchaser rule of Eagle Pipe, Inc. v. Amerada Hess Corp., 79 So. 3d 246 (La. 2011), extends to mineral leases such that a subsequent purchaser of property has no right of action against prior operators for pre-acquisition exploration damage absent an assignment of that personal right. Vinton Harbor & Terminal Dist. v. Reunion Energy Co., --- So. 3d ----, No. 2025-00971, 2026 WL 1584405 (La. May 29, 2026).
Texas Ct. App. Remands ORRI Refund Dispute. In an overriding royalty dispute, a Texas appellate court said fact issues precluded summary judgment in favor of an operator seeking refunds of mistakenly paid overrides, holding that the operator’s right to refunds is expressly made “subject to” an unrecorded letter agreement that the operator never produced. Brown v. Endeavor Energy Res., L.P., --- S.W.3d ----, No. 11-24-00320-CV, 2026 WL 1593646 (Tex. App.—Eastland June 4, 2026, no pet. h.).
N.M. Ct. App. Says Late Payment Doesn’t Save Expired Lease. In a dispute over a lease covering state lands, a New Mexico appellate court held that the Commissioner of Public Lands properly determined a state oil and gas lease expired and that the state had no obligation to accept late or claimed overpayments to reinstate it such that the lessee held no property interest in the expired lease supporting a due-process or takings claim. Snow Oil & Gas, Inc. v. Garcia Richard, --- P.3d ----, No. A-1-CA-42387, 2026 WL 1602323 (N.M. Ct. App. June 4, 2026).
Colo. Ct. App. Upholds $1.9 Million Penalty Against O+G Operator. A court of appeals in Colorado upheld an order from the state’s Energy and Carbon Management Commission that terminated a “compliance-plan agreement” with an operator for various environmental and regulatory transgressions, holding that a $1.9 million penalty for rule violations and a corresponding suspension of the operator’s certificates of clearance were neither arbitrary or capricious nor “cruel and unusual” punishments. K.P. Kauffman Co. v. Oil & Gas Conservation Comm’n, --- P.3d ----, No. 25CA1249, 2026 WL 1618420 (Colo. App. June 4, 2026).
Fed. Ct. in Okla. Says Interest Owners can Re-plead Gas-Diversion Fraud Claims. In a revenue-diversion dispute, a federal court in Oklahoma denied oil and gas interest owners’ Rule 59(e) motion to alter a judgment dismissing their claims but granted leave to file a second amended complaint to re-plead allegations that the operator diverted production away from its midstream providers to capture undisclosed “earnout” payments. Pratt v. Calyx Energy III, LLC, --- F. Supp. 3d ----, No. 24-CV-452-GLJ, 2026 WL 1664093 (E.D. Okla. June 9, 2026).
Fed. Ct. in N.D. Says Lease Rider Bars Deducts from Royalties. In a royalty dispute, a federal court in North Dakota held that a lease rider barring deductions for compressing or transporting produced gas prohibited the lessee from reducing royalties through certain “adjustments” that an unaffiliated midstream purchaser applied under a separate gas purchase contract, reasoning that the rider controlled over any contrary lease language and contained no exceptions. Phelps Min. Holdings, LLC v. Cont’l Res., Inc., --- F. Supp. 3d ----, No. 1:23-CV-00219, 2026 WL 1662157 (D.N.D. June 9, 2026).
Fed. Ct. in Okla. Says PRSA Entitles Owner to 12% Interest on Wrongly Charged Fees. In a royalty dispute over fees charge to interest owners, a federal court in Oklahoma held that Oklahoma’s Production Revenue Standards Act entitles an interest owner to 12% statutory interest without proof of gross negligence or willful misconduct and that the Act’s five-year limitations period governs over an operating agreements’ two-year notice provision. New Dominion, LLC v. H&P Investments, LLC, --- F. Supp. 3d ----, No. 20-CV-00592-CVE-CDL, 2026 WL 1693007 (N.D. Okla. June 11, 2026).
CA4 Denies Stay of Water Quality Certification for Southgate Pipeline. In a challenge to a pipeline water quality certification, a federal appeals court denied environmental groups’ motion to stay North Carolina’s certification for MVP’s Southgate Project pending review, holding that the petitioners did not make a strong showing that they were likely to succeed on the merits. Sierra Club v. N. Carolina Dep’t of Env’t Quality, --- F.4th ----, No. 26-1044, 2026 WL 1689722 (4th Cir. June 11, 2026).
Fed. Ct. in Mont. Says BLM’s 2018 Sage-Grouse Memo and Lease Sales Violated FLPMA. In a challenge to lease sales on federal land, a federal court in Montana held that BLM’s 2018 sage-grouse memo and its related 2019 Wyoming and Montana/Dakota lease sales violated the Federal Land Policy and Management Act as inconsistent with its requirements to manage public lands in accordance with land use plans and to implement the prioritization requirement to protect sage-grouse habitat. Montana Wildlife Federation v. Burgum, --- F. Supp. 3d ----, No. CV-18-69-GF-BMM, 2026 WL 1707576 (D. Mont. June 12, 2026).
D.C. Circ. Upholds OSHA Citation Against Oil Well Contractor for Hazard. In an OSHA enforcement case arising from a pipe rupture at an oil well, a federal appeals court upheld a citation against a contractor whose employees stood unnecessarily close to a depressurizing well, rejecting the company’s as-applied constitutional challenge to OSHA’s enabling statute and holding that the company could feasibly have abated the hazard with a buffer zone even though it neither supplied the piping nor directed the operation. TCP Specialists, LLC v. Sec’y of Lab., --- F.4th ----, No. 25-1173, 2026 WL 1700571 (D.C. Cir. June 12, 2026).
Tex. Ct. App. Uphold’s O+G Well Operator’s Surface Use. In a surface-use dispute, a court of appeals in Texas held that a provision in and oil and gas lease limiting ingress and egress “to the frac pond and designated water wells” to begin and end at the original gate did not bar the operator from constructing and using a separate access gate and road for its other operations. Davenport v. EOG Res., Inc., --- S.W.3d ----, No. 04-25-00062-CV, 2026 WL 1811019 (Tex. App.—San Antonio June 24, 2026).
Colo. Supremes Say “Economic Loss” Rule Doesn’t Bar Fraud Claim. In a dispute arising from the design and construction of a facility to treat hydraulic-fracturing wastewater, the Colorado Supreme Court held that (a) the economic loss rule does not bar a fraud claim where the alleged misconduct preceded and induced the relevant contract; and (b) the interrelated-contracts doctrine does not apply to a series of stand-alone transactions between two parties. Veolia Water Techs., Inc. v. Antero Treatment LLC, 2026 CO 52, --- P.3d ----, 2026 WL 1813192 (Colo. June 22, 2026).
Cali. Supremes Say No CEQA Exemption for Converting O+G Well. In a dispute over converting a dormant oil and gas well into a wastewater-injection well, the California Supreme Court held that a categorical exemption in the California Environmental Quality Act for “negligible or no expansion of existing or former use” does not apply to this conversion because the statute measures the change in a facility’s use rather than evaluating the risk of environmental harm. Sunflower All. v. Dep’t of Conservation, --- P.3d ----, No. S287414, 2026 WL 1830258 (Cal. June 25, 2026).
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