Absolute Oil + Gas, LLC v. Chord Energy Corporation F/K/A Oasis Petroleum, Inc. Oasis Petroleum North America, LLC; Oasis Midstream Services, LLC; Crestwood Midstream Partners, LP; Oasis Midstream Partners LP; Crestwood Equity Partners LP; OMP GP, LLP; Michael Lou; Taylor Reid; Thomas Nusz; And Nickolas Lorentzatos

• Court: Texas Court of Appeals, 1st District (Houston)
• Decided: March 19, 2026
• Docket: 01-24-00180-CV
• Status: Published

Opinion

Opinion issued March 19, 2026

In The Court of Appeals For The First District of Texas ———————————— NO. 01-24-00180-CV ——————————— ABSOLUTE OIL + GAS, LLC, Appellant/Cross-Appellee v. CHORD ENERGY CORPORATION F/K/A OASIS PETROLEUM, INC., OASIS PETROLEUM NORTH AMERICA, LLC, CRESTWOOD MIDSTREAM PARTNERS LP, ROUGH RIDER MIDSTREAM SERVICES, LLC, LLC CRESTWOOD EQUITY PARTNERS LP, OMP GP LLC, THOMAS NUSZ, TAYLOR REID, MICHAEL LOU, AND NICKOLAS LORENTZATOS, Appellees CHORD ENERGY CORPORATION F/K/A OASIS PETROLEUM INC. AND OASIS PETROLEUM NORTH AMERICA, LLC, Cross-Appellants

On Appeal from the 269th Judicial District Court of Harris County, Texas Trial Court Cause No. 2023-08665-A

MEMORANDUM OPINION

This appeal arises from a midstream oil and gas contract dispute with related

tort claims brought by Absolute Oil + Gas, LLC (“AOG”) against multiple parties, including Chord Energy Corporation (“Chord”) formerly known as Oasis Petroleum

Inc. and Oasis Petroleum North America, LLC (“OPNA”) (collectively, the Chord

Parties); Crestwood Midstream Partners LP formerly known as Oasis Midstream

Partners LP, Rough Rider Midstream Services, LLC formerly known as Oasis

Midstream Services, LLC, Crestwood Equity Partners LP, and OMP GP LLC

(collectively, the Crestwood Parties); and Thomas Nusz, Taylor Reid, Michael Lou,

and Nickolas Lorentzatos (collectively, the Executive Parties). AOG alleged that the

appellees engaged in a scheme to inflate midstream costs.

After the appellees moved to dismiss certain claims under Texas Rule of Civil

Procedure 91a, the trial court dismissed the tort claims against all the appellees. The

trial court also dismissed the contract and unjust enrichment claims against the

Crestwood Parties and Executive Parties but did not dismiss the contract and unjust

enrichment claims against the Chord Parties. The trial court then severed the

dismissed claims.

AOG appealed the dismissal of the severed claims. The Chord Parties cross-

appealed the trial court’s severance order. In two issues, the Chord Parties contend

that the trial court abused its discretion by severing the dismissed claims.

We reverse and remand.

2 Background

The Chord Parties conduct oil and gas operations in the Williston Basin in

North Dakota.

AOG is a minority working interest owner of certain oil and gas wells

operated by the Chord Parties (“Subject Wells”). AOG acquired such interests

through a 2020 purchase from a third party not involved in this suit. The Subject

Wells are governed by a 1999 Joint Operating Agreement and related agreements

between the parties’ predecessors-in-interest.

In 2017, OPNA contracted with the Crestwood Parties to provide midstream

services on the Subject Wells (“2017 Midstream Agreements). AOG alleged that the

2017 Midstream Agreements passed artificially high midstream costs to AOG. AOG

further alleged that the Executive Parties, who are affiliated with one or more of the

Chord Parties or Crestwood Parties, directed and benefited from the 2017 Midstream

Agreements.

AOG asserted various claims against the Chord Parties, Crestwood Parties,

and Executive Parties, while using overlapping terms to refer to them in its live

petition. AOG referred to Chord, Oasis Midstream Services, LLC n/k/a Rough Rider

Midstream Services, and Crestwood Midstream Partners f/k/a Oasis Midstream

Partners LP as “Oasis.” AOG referred to OPNA, Oasis Midstream Services, LLC

3 n/k/a Rough Rider Midstream Services, LLC, and Crestwood Midstream Partners

f/k/a Oasis Midstream Partners LP as “Subsidiary Defendants.”

The Crestwood Parties and Executive Parties moved to dismiss all claims

against them under Rule 91a, and the Chord Parties moved to dismiss all tort claims

against them under Rule 91a. The Chord Parties’ only briefed basis for dismissing

the fraud, negligence, and gross negligence claims brought against them was that the

economic loss rule barred those claims. The trial court dismissed with prejudice

AOG’s tort claims against the Chord Parties and all counts against the Crestwood

Parties and Executive Parties. But the trial court did not dismiss the breach of

contract and unjust enrichment claims against the Chord Parties. And while AOG

brought its unjust enrichment claim against all the appellees, the trial court dismissed

AOG’s unjust enrichment claim against only the Crestwood Parties and Executive

Parties.

AOG moved for reconsideration, and alternatively, for severance of the

dismissed claims and a stay of the remaining claims. The Chord Parties responded

that severance of the dismissed counts was improper. The trial court denied the

request for reconsideration but took the motion for severance under advisement. The

trial court instructed AOG to prepare a proposed severance order and circulate it to

the appellees’ counsel before submitting it to the trial court. AOG submitted its

proposed severance order to the trial court without circulating it as instructed.

4 The trial court signed AOG’s proposed severance order over the Chord

Parties’ opposition. The trial court entered final judgment as to the severed action

and stayed the underlying proceedings for the remaining claims pending any appeal

in the severed action.1

Severance Order

In their first cross-issue, the Chord Parties argue that the trial court abused its

discretion because its severance order severed counts that were interwoven with the

remaining counts. AOG responds that the trial court properly severed the dismissed

tort claims from the claims sounding in contract.

A. Standard of Review

“Any claim against a party may be severed and proceeded with separately.”

TEX. R. CIV. P. 41. We review a trial court’s ruling on a severance order for abuse

of discretion. Sealy Emergency Room, L.L.C. v. Free Standing Emergency Room

Managers of Am., L.L.C., 685 S.W.3d 816, 822 (Tex. 2024). “But the court is not

vested with unlimited discretion, and is required to exercise a sound and legal

discretion within limits created by the circumstances of the particular case.” Boeing

Co. v. Sw. Airlines Pilots Ass’n, 716 S.W.3d 140, 155 (Tex. 2025). A trial court

abuses its discretion if it acts arbitrarily or unreasonably, does not refer to guiding

1 Although the trial court’s severance order is ambiguous as to whether the order severed certain dismissed claims, we assume for the purposes of this appeal that all dismissed claims are severed.

5 rules or principles, or plainly fails to analyze or correctly apply the law. Runcie v.

Foley, 274 S.W.3d 232, 233 (Tex. App.—Houston [1st Dist.] 2008, no pet.).

B. Analysis

A severance is proper when (1) the controversy involves more than one claim,

(2) the severed claim is one that would be the proper subject of an independently

asserted lawsuit, and (3) the severed claim is not so interwoven with the remaining

action that the actions involve the same facts and issues. Guar. Fed. Sav. Bank v.

Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990). Within this

framework, avoiding prejudice, doing justice, and increasing convenience are the

controlling reasons to allow a severance. Id. “When a trial court severs a lawsuit,

two or more independent suits result, and each suit leads to its own final appealable

judgment.” In re Henry, 388 S.W.3d 719, 726 (Tex. App.—Houston [1st Dist.] 2012,

orig. proceeding).

The Chord Parties contend that the severed claims are interwoven with the

remaining claims. Claims are interwoven when they involve the same facts and

issues to be litigated. F.F.P. Oper. Partners v. Duenez, 237 S.W.3d 680, 693–94

(Tex. 2007). “[S]everance of two or more causes of action involving the same facts

and issues is improper.” Sealy Emergency Room, L.L.C., 685 S.W.3d at 822.

Here, AOG asserted ten claims against the parties, including multiple breach

of contract theories and various torts, but each claim incorporates and is based on

6 AOG’s allegation that the Chord Parties, the Crestwood Parties, and the Executive

Parties collusively agreed to artificially inflate gas processing costs that were passed

to AOG. Thus, the severed claims are grounded in the same facts and issues to be

litigated as AOG’s remaining breach of contract and unjust enrichment claims

against the Chord Parties.

For example, AOG’s breach of contract claim stems from the 1999 Joint

Operating Agreement, but so do AOG’s claims for civil conspiracy, negligence,

tortious interference, and alter ego. Additionally, AOG incorporated in its breach of

contract claim its allegations of fraud, civil conspiracy, breach of fiduciary duty, and

knowing participation in breach of fiduciary duty. AOG’s breach of contract claim

explicitly includes allegations of “gross negligence and willful misconduct” and

“actual fraud.” AOG also alleged that the Chord Parties’ “breaches were committed

by [their] alter egos . . . .” Further, AOG’s unjust enrichment claim relies on its

fraud allegation and incorporates its breach of fiduciary duty allegation.

Although the trial court dismissed and severed AOG’s unjust enrichment

claim against the Crestwood Parties and the Executive Parties, AOG’s unjust

enrichment claim against the Chord Parties remains. But the basis of AOG’s unjust

enrichment claim was that Crestwood Midstream Partners f/k/a Oasis Midstream

Partners LP, one of the Crestwood Parties, received monies that should have been

paid to AOG, among other working interest owners. Further, the severance of

7 AOG’s unjust enrichment claim against the Crestwood Parties and Executive Parties

from the unjust enrichment claim against the Chord Parties risks inconsistent rulings,

including on whether an express contract bars restitution. See Christus Health v.

Quality Infusion Care, Inc., 359 S.W.3d 719, 724 (Tex. App.—Houston [1st Dist.]

2011, no pet.) (explaining that an express contract bars recoveries under quasi-

contract theories). For instance, if the dismissal of the severed claims is reversed,

and the claims are remanded to the trial court, the factfinder in one case may find

that the benefits sought by AOG are governed by the 1999 Agreement, but the

factfinder in the other case may find that no existing contract governs. Such potential

findings lead to inconsistent rulings and obligations of the parties.

The allegations against the appellees are also largely interwoven according to

AOG’s live petition. See Jones v. Ray, 886 S.W.2d 817, 820 (Tex. App.—Houston

[1st Dist.] 1994, no writ) (explaining that trial court should look to live pleadings on

file when determining severance issue). AOG’s live petition overlaps the Chord

Parties and the Crestwood Parties in several ways, including: (1) AOG’s definitions

of “Oasis” and “Subsidiary Defendants,” both of which include some of the Chord

Parties and Crestwood Parties; (2) AOG’s allegations that all the appellees were

agents and/or co-conspirators of each other and acted at all material times on behalf

of each other; (3) AOG’s allegations that the corporate appellees were or are closely

interrelated business entities which share corporate office holders and business

8 interests; and (4) AOG’s allegations that the appellees acted at all material times “in

their individual corporate capacities as well as by and through their unincorporated

divisions and departments, corporate parents, subsidiaries and/or other affiliates,

alter ego corporations and other entities, its predecessors and/or its successors.” The

alleged interrelation between the appellees demonstrates shared operative facts

across all claims.

The trial court implicitly agreed that certain tort claims were interwoven with

the breach of contract count by dismissing certain tort claims under the economic

loss rule, which prohibits recasting breach of contract claims as torts involving

contractual duties and injury based on the loss of a contractual benefit. AOG also

acknowledged the interwoven nature of the severed claims. At the hearing on the

severance motion, AOG explained to the trial court that the severed claims “can be

rejoined; and we can proceed with one case, one trial, one set of discovery, one scope

of discovery.” AOG also requested a stay of the original proceeding and remaining

claims to prevent “duplication of efforts and potentially unnecessary discovery,”

explaining that the parties will be forced to spend significant resources in proceeding

with discovery when appellate review may result in restoration of the dismissed

claims. And AOG told the trial court it had considered a discretionary interlocutory

appeal but decided against it, noting that “the court of appeals doesn’t take them.”

9 Severance is improper where claims involve the same testimony on damages

and require the same proof of conduct. In re State, 355 S.W.3d 611, 614 (Tex. 2011).

Here, the damages that AOG alleges overlap in both the remaining and the severed

claims, creating a risk of duplicate and inconsistent recoveries from fragmented

adjudication. See id.; State Dep’t of Highs. & Pub. Transp. v. Cotner, 845 S.W.2d

818, 819 (Tex. 1993). The same expert testimony and the same factual issues are

relevant to determine the amount and recoverability of damages. For instance, both

the remaining and severed claims require resolution of factual disputes over whether

the midstream rates were inflated and what rate is a proper non-inflated rate.

In summary, the severed claims and the remaining claims involve the same

subject matter, the same actors, the same time frame, and the same contracts. AOG’s

live petition relies on the same facts and circumstances to support both its tort and

contract claims. If the severance order is upheld, the parties would pay the same

attorneys to represent them and the same experts to testify in separate cases when

the issues could be tried once in a single action. See In re State, 355 S.W.3d at 614.

If allowed to stand, the severance would not only inconvenience the parties by

causing such duplication, but it could also result in inconsistent judgments, which

would prejudice the parties. See id.; Jones, 886 S.W.2d at 822.

For these reasons, we hold that the trial court erred in granting AOG’s motion

for severance.

10 We sustain the Chord Parties’ first issue. Because it is dispositive, we do not

reach the Chord Parties’ second issue.

Conclusion

We reverse the trial court’s judgment and remand this cause to the trial court

with instructions to consolidate the severed and the remaining counts.2

Clint Morgan Justice

Panel consists of Justices Rivas-Molloy, Guiney, and Morgan.

2 Because reversing the severance order results in a final disposition, we do not consider the issues raised in AOG’s appeal.