Burlington Resources Oil & Gas Company, LP v. Petromax Operating Co., Inc., Woodbine Acquisition, LLC, N/K/A MD America Energy, LLC, Petro Texas, LLC, CH4 Energy II, LLC, and Texcal Energy South Texas, LP

Opinion

ACCEPTED

06-15-00044-CV

SIXTH COURT OF APPEALS

TEXARKANA, TEXAS 12/21/2015 4:21:49 PM

DEBBIE AUTREY

CLERK

No. 06-15-00044-CV

IN THE SIXTH COURT OF APPEALS FILED IN 6th COURT OF APPEALS

TEXARKANA, TEXAS TEXARKANA, TEXAS 12/22/2015 8:08:00 AM

BURLINGTON RESOURCES OIL & GAS COMPANY, LP, DEBBIE AUTREY Appellant, Clerk v.

PETROMAX OPERATING CO., INC., WOODBINE ACQUISITION, LLC, PETRO TEXAS, LLC, CH4 ENERGY II, LLC, AND TEXCAL ENERGY SOUTH TEXAS, L.P., Appellees.

BRIEF OF APPELLEES

THOMPSON & KNIGHT LLP HANKINSON LLP BECK REDDEN LLP Greg W. Curry Deborah G. Hankinson David J. Beck State Bar No. 05270300 State Bar No. 00000020 State Bar No. 00000070 greg.curry@tklaw.com dhankinson@hankinsonlaw.com dbeck@beckredden.com Richard B. Phillips, Jr. Stephanie Dooley Nelson David M. Gunn State Bar No. 24032833 State Bar No. 24002006 State Bar No. 08621600 rich.phillips@tklaw.com snelson@hankinsonlaw.com dgunn@beckredden.com Gregory D. Binns 750 N. St. Paul St., Suite 1800 Thomas E. Ganucheau State Bar No. 24027148 Dallas, Texas 75201 State Bar No. 00784104 greg.binns@tklaw.com 214-754-9190; Fax: 214-754-9140 tganucheau@beckredden.com One Arts Plaza Counsel for Appellee Jim Taylor 1722 Routh Street, Suite 1500 TexCal Energy South Texas, L.P. State Bar No. 00788512 Dallas, Texas 75201 jtaylor@beckredden.com 214-969-1700; Fax: 214-969-1751 PIERCE & O’NEILL, LLP 1221 McKinney, Suite 4500 Counsel for Appellee Jesse R. Pierce Houston, TX 77010 Woodbine Acquisition, LLC State Bar No. 15995400 713-951-3700; Fax: 713-951-3720 n/k/a MD America Energy LLC jpierce@pierceoneill.com Counsel for Appellees, Brian K. Tully PetroMax Operating Co., Inc., ATCHLEY, RUSSELL, WALDROP State Bar No. 24039217 Petro Texas LLC, and & HLAVINKA, LLP btully@pierceoneill.com CH4 Energy II, LLC Jeffery C. Lewis 4203 Montrose Boulevard State Bar No. 12280950 Houston, Texas 77006 CANTEY HANGER LLP jlewis@arwhlaw.com 713-634-3600; Fax: 713-634-3601 Brad D’Amico 1710 Moores Lane Counsel for Appellee State Bar No.00783923 Texarkana, Texas 75503 TexCal Energy South Texas, L.P. bd@canteyhanger.com 903-792-8246; Fax: 903-792-5801 1999 Bryan Street, Suite 3300 Counsel for Appellee Dallas, TX 75201 Woodbine Acquisition, LLC 214-978-4100; Fax: 214-978-4150 n/k/a MD America Energy LLC Counsel for Appellee PetroMax Operating Co., Inc.

ORAL ARGUMENT CONDITIONALLY REQUESTED

IDENTITY OF PARTIES AND COUNSEL

In addition to the counsel listed in Appellant’s Brief, please note the

appearance of the following additional counsel:

David M. Gunn Deborah G. Hankinson State Bar No. 08621600 State Bar No. 00000020 dgunn@beckredden.com dhankinson@hankinsonlaw.com Jim Taylor Stephanie Dooley Nelson State Bar No. 00788512 State Bar No. 24002006 jtaylor@beckredden.com snelson@hankinsonlaw.com BECK REDDEN LLP HANKINSON LLP 1221 McKinney, Suite 4500 750 N. St. Paul St., Suite 1800 Houston, TX 77010-2010 Dallas, Texas 75201 (713) 951-3700 Phone: 214-754-9190 (713) 951-3720 (Fax) Fax: 214-754-9140 Counsel for Appellees, Counsel for Appellee PetroMax Operating Co., Inc., TexCal Energy South Texas, Petro Texas LLC, and L.P. CH4 Energy II, LLC

Jeffery C. Lewis State Bar No. 12280950 jlewis@arwhlaw.com ATCHLEY, RUSSELL, WALDROP & HLAVINKA, LLP 1710 Moores Lane Texarkana, Texas 75503 Phone: 903-792-8246 Fax: 903-792-5801 Counsel for Appellee MD America Energy, LLC f/k/a Woodbine Acquisition LLC

TABLE OF CONTENTS

Page

IDENTITY OF PARTIES AND COUNSEL .......................................................................... i

TABLE OF CONTENTS ................................................................................................. ii

INDEX OF AUTHORITIES............................................................................................. iv

STATEMENT OF THE CASE ........................................................................................ vii

STATEMENT REGARDING ORAL ARGUMENT ........................................................... viii

ISSUE PRESENTED...................................................................................................... ix

STATEMENT OF FACTS.................................................................................................1

SUMMARY OF THE ARGUMENT ....................................................................................8

ARGUMENT ...............................................................................................................10

I. PRINCIPLES OF CONTRACT CONSTRUCTION. .........................................10

II. THE ONLY REASONABLE INTERPRETATION OF THE ASSIGNMENT. .......................................................................................11

III. BURLINGTON’S CONSTRUCTION IS NOT REASONABLE. ........................14

A. Burlington’s Construction Requires Ignoring Essentially All of the Granting Clause. ....................................16

B. Burlington’s Construction Makes No Sense in Light of the Obligations/Indemnity Clause. .............................17

C. Burlington’s Construction Does Not Explain Why Exhibit A Would Switch the Order From the Text, or Adequately Explain What “Associated Wells” Is Supposed to Mean. ...............................18

D. Burlington Does Not Explain Why It Would Be Necessary to Reserve the Odom Lease. ....................................20

ii

E. Burlington’s Construction Renders the “Less and Excepted” Clause Essentially Meaningless, or Completely Misleading.........................................................21

F. The Leases Cannot Be What Was Reserved Because They Cannot Be “From” the Wells. ...........................23

IV. PAROL EVIDENCE CANNOT BE USED TO ALTER THE PLAIN MEANING OF THE ASSIGNMENT AND DOES NOT CHANGE THE EQUATION IN ANY EVENT. ..............................................25

A. The Alleged Evidence of “Surrounding Circumstances.” ........................................................................26

1. The Auction Catalog. ......................................................26

2. The Understanding of the Purchaser and Seller. ..............................................................................30

B. The Post-Transaction Parol Evidence. ......................................32

C. This Court Should Not Rely on Parol Evidence in Construing a Deed. ...............................................................33

V. BURLINGTON IS NOT ENTITLED TO JUDGMENT ON ITS 25% ISSUE. ...........................................................................................35

PRAYER FOR RELIEF ..................................................................................................37

CERTIFICATE OF SERVICE ..........................................................................................41

CERTIFICATE OF COMPLIANCE ..................................................................................42

APPENDIX

Assignment and Bill of Sale (Supp. CR 1:64-69) .................................. TAB A

Order Granting Defendants’ Motion for Summary Judgment on Title Issues (CR 1617) ....................................................................... TAB B

Order Denying Burlington’s Motion for Partial Summary Judgment Seeking Various Declarations (CR 1618-19) ........................ TAB C

iii

INDEX OF AUTHORITIES

CASES Page(s)

Am. Mfrs. Mut. Ins. Co. v. Schaefer 124 S.W.3d 154 (Tex. 2003) .............................................................................. 36

Americo Life, Inc. v. Myer 440 S.W.3d 18 (Tex. 2014)...........................................................................26, 33

Anglo-Dutch Petroleum Int’l, Inc.

v. Greenberg Peden, P.C. 352 S.W.3d 445 (Tex. 2011) .............................................................................. 26

Capitan Enters., Inc. v. Jackson 903 S.W.2d 772 (Tex. App.—El Paso 1994, writ denied) ............................................................................................... 36

Cincinnati Life Ins. Co. v. Cates 927 S.W.2d 623 (Tex. 1996) .............................................................................. 35

Coker v. Coker 650 S.W.2d 391 (Tex. 1983) .............................................................................. 10

Day & Co., Inc. v. Texland Petroleum, Inc.

786 S.W.2d 667 (Tex. 1990) .............................................................................. 34

In re Dillard Dept. Stores, Inc.

186 S.W.3d 514 (Tex. 2006) .............................................................................. 33

State v. Dunn 574 S.W.2d 821 (Tex. Civ. App.—Amarillo 1978, writ ref’d n.r.e.) ......................................................................................... 34

El Paso Field Servs., L.P. v. MasTec N. Am., Inc.

389 S.W.3d 802 (Tex. 2012) .............................................................................. 10

Friendswood Dev. Co. v. McDade & Co.

926 S.W.2d 280 (Tex. 1996) .............................................................................. 10

Frost Nat’l Bank v. L&F Distribs., Ltd.

165 S.W.3d 310 (Tex. 2005) .............................................................................. 36

iv

Garza v. Prolithic Energy Co., L.P.

195 S.W.3d 137 (Tex. App.—San Antonio 2006, pet. denied)................................................................................................ 32

Gonyea v. Kerby No. 10-12-00182-CV, 2013 WL 4040117 (Tex. App.—Waco Aug. 8, 2013, pet. denied) ................................................... 34

Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd. 352 S.W.3d 462 (Tex. 2011) ........................................................................25, 26

J.M. Davidson, Inc. v. Webster 128 S.W.3d 223 (Tex. 2003) ........................................................................14, 25

Kachina Pipeline Co., Inc. v. Lillis 471 S.W.3d 445 (Tex. 2015) ........................................................................14, 25

King v. First Nat’l Bank of Wichita Falls 192 S.W.2d 260 (Tex. 1946) .............................................................................. 12

Lewis v. Midgett 448 S.W.2d 548 (Tex. Civ. App.—Tyler 1969, no writ) ...................................................................................................... 34

Matagorda Cnty. Hosp. Dist. v. Burwell 189 S.W.3d 738 (Tex. 2006) .............................................................................. 25

MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.

995 S.W.2d 647 (Tex. 1999) .............................................................................. 10

Mitchell v. Mitchell 445 S.W.3d 790 (Tex. App.—Houston [1st Dist.] 2014, no pet.) ..................................................................................... 35

Pich v. Lankford 302 S.W.2d 645 (Tex. 1957) .............................................................................. 12

Sun Oil Co. (Delaware) v. Madeley 626 S.W.2d 726 (Tex. 1981) ........................................................................25, 26

v

Valence Operating Co. v. Dorsett 164 S.W.3d 656 (Tex. 2005) ........................................................................10, 35

OTHER AUTHORITIES

Bruce M. Kramer, The Sisyphean Task of Interpreting Mineral Deeds and Leases: An Encyclopedia of Canons of Construction, 24 TEX. TECH L. REV. 1, 14 (1993)..................................................................... 34

vi

STATEMENT OF THE CASE

Nature of the case This oil and gas case turns on the interpretation of a 1994 Assignment that is 3-pages long with a 1-page exhibit.

The parties dispute whether the assignment conveyed four described leases, or only four specific wells. If it conveyed four leases, then the area of mutual interest (“AMI”) on which Appellant’s claims rely expired and Appellant’s claims fail. If it conveyed only four specific wells, Appellant’s claims remain subject to Appellees’ other defenses and the case should be remanded.

Trial court 12th District Court, Madison County, Texas (Hon.

Donald L. Kraemer, presiding)

Course of proceedings Burlington filed suit against Appellees (collectively, the PetroMax Defendants) alleging a breach of the AMI provisions of a 1975 Letter Agreement. Appellees denied these claims and filed counterclaims seeking to quiet their title. The two sides filed competing summary judgment motions centering on the issue of whether the AMI had expired.

Trial court disposition The trial court denied Burlington’s summary judgment motion and granted the PetroMax Defendants’ summary judgment motion. The trial court ruled that

(1) Burlington owns no interest in the AMI; and

(2) the AMI provision has terminated.

The court severed the remaining claims to make its summary judgment final.

vii

STATEMENT REGARDING ORAL ARGUMENT

Oral argument is not necessary because this appeal involves application of

familiar contract-construction principles to an unambiguous assignment. But if the

Court grants Burlington’s request for oral argument, the PetroMax Defendants

reserve their right to participate.

viii

ISSUE PRESENTED

The issue on appeal is whether the trial court properly interpreted the 1994

Assignment as conveying four oil and gas leases and not just four wells without the

underlying leases.

ix

STATEMENT OF FACTS

The resolution of the case turns entirely on the interpretation of a 3-page

assignment with a 1-page exhibit. The important facts in this appeal, those

necessary for resolution, are simply stated.

In 1975, Buttes Resources Company owned an undivided one-half working

interest in nine oil and gas leases. CR:589. Buttes and Aztec Oil and Gas

Company entered into a letter agreement to facilitate joint efforts to explore for and

develop oil and gas. As part of that agreement, Buttes conveyed to Aztec an

undivided 25% interest in those nine leases. CR:589, 591-92.

In addition, Buttes and Aztec entered into an area of mutual interest (“AMI”)

agreement providing that if either party obtained an oil and gas interest within the

boundaries of the AMI, it was obligated to offer the other party a participation in

that interest proportionate to their ownership of the original nine leases. In other

words, Buttes would have to offer Aztec an undivided 25% interest, and Aztec

would have to offer Buttes an undivided 75% interest. CR:593.

The 1975 Letter Agreement provided that the AMI would remain in force

and effect only so long as there continued to exist jointly-owned leases within the

AMI. CR:593. It is undisputed that six of the original nine leases no longer exist

2

or are no longer jointly owned.1 The only three leases still at issue are 1) the Gibbs

Lease, 2) the Wilson Lease, and 3) the Buchanan Lease.

Much has changed since 1975. The original interests held by Buttes and

Aztec have changed hands multiple times. Ultimately, the PetroMax Defendants2

are assignees of a portion of Buttes’s interest. CR:437. Burlington3 is a successor

in interest to Aztec. CR:435, 437.4 Importantly, an intermediate successor in

interest to Aztec, in Burlington’s chain of title, was a company called Southland

Royalty Company. CR:435, 437.

This is significant because in 1994, Southland entered into an assignment

(the “Assignment”) with Samson Resources Company that involved all three of the

disputed leases – the Gibbs, Wilson, and Buchanan leases.5 Supp. CR 1:64-69.

More specifically, the Assignment stated that Southland

1 See Appellant’s Brief at 5. Four of the original leases terminated in 1979 at the end of their primary terms. CR:74. With regard to a fifth lease, all but one well was assigned to a third party 5in 1981, and the remaining well was assigned to another third party in 1997. Id. A sixth lease expired upon cessation of production in 1999. Id. 2 Defendants/Appellees PetroMax Operating Co., Inc. (“PetroMax”), Woodbine Acquisition, LLC (“Woodbine”), Petro Texas, LLC, CH4 Energy II, LLC, and TexCal Energy South Texas, L.P. (“TexCal”). 3 Plaintiff/Appellant Burlington Resources Oil & Gas Company, LP.

4 There are at least four other successors to Aztec’s interests. Supp CR 3:842, 3:1277-78, 3:2147-2763. Defendant Woodbine is also an assignee of a portion of Aztec’s interest. Supp CR 3:67-105, 2531-58. 5 The Assignment is attached as Appendix A.

3

does hereby assign, transfer, grant and convey to Samson Resources Company ... all of Assignor’s right, title and interest in and to the following: (i) The oil and gas leases ... particularly described on Exhibit “A” ... (collectively the “Leases”) ... (ii) The wells ... on the Leases ...

Supp. CR 1:64 (emphasis added). In addition, the Assignment contains a

reservation clause providing that Southland reserved from the conveyance certain

interests “specifically noted and reflected on Exhibit ‘A’.” Id.

Exhibit A described four oil and gas leases as follows:

Supp. CR 1:68.

The position of the PetroMax Defendants is that the four leases described in

Exhibit A were conveyed in 1994, that the conveyance included the non-exclusive

list of wells associated with the leases that is set forth at the bottom of the exhibit,

and that the only properties exempt from the assignment were the wells identified

in the “Less and Excepted” clause appended to the list of leases. Supp. CR 1:13-

17; Supp. CR 2:1339-40, 1352.

4

Indeed, that is what Samson believed it purchased. Supp. CR 2:1362-65.

Moreover, for more than sixteen years, that is what Southland, and its successors

(including Burlington), believed it sold. Supp. CR 1:115, 117, 119, 121-22; see

also Supp. CR 2:1464-73, 1873.

For its part, Burlington contends that the Assignment did not convey the four

leases described in Exhibit A, or any lease. Appellant’s Brief at 19. Rather,

Burlington takes the position that the Assignment conveyed only four specific wells,

and nothing else. Id.; CR:1411. Consequently, Burlington argues that Southland

continued to own the four oil and gas leases described in Exhibit A, and that it

(Burlington) eventually succeeded to those interests. Appellant’s Brief at 14.

There are other issues that would require adjudication at trial if the Court

were to accept Burlington’s interpretation of the Assignment. Because the trial

court determined that the AMI terminated, it never addressed other issues, such as

the affirmative defenses raised by the PetroMax Defendants,6 and the 25%

proportionate-reduction issue discussed in Appellant’s Brief. See CR:1148;

Appellant’s Brief at 34-35. However, this dispute rises or falls with the

interpretation of the Assignment.

6 These defenses include that Burlington (and its predecessors) waived enforcement of the AMI provision and that the AMI provision (i) does not satisfy the statute of frauds; (ii) lacks an essential term; and (iii) violates the Rule Against Perpetuities. Supp. CR 3:42-43. Burlington makes no effort to address these defenses in its brief.

5

PetroMax7 acquired its interest in the Wilson Lease in 2009 and embarked

on a plan to drill new wells on the lease. CR:647-58. Based on a 2007 title

opinion,8 PetroMax sent Burlington various Authorities for Expenditure (“AFEs”)

regarding participation in proposed wells on the Wilson Lease. Supp. CR 2:1326-

28, 1330-32, 1334-36, 1343, 1352.

After receiving these AFEs, Burlington9 reviewed its internal records, which

reflected that it no longer owned any such interest because the Wilson Lease had

been sold to Samson in the 1994 Assignment. Supp. CR 1:115, 117, 119, 121-22;

see also Supp. CR 2:699-700, 1464-73, 1873; Supp. CR 3:1494-1877, 1583, 1671,

1686-87, 1718, 1728-32, 1738. For instance, an internal memorandum dated

August 28, 2009, stated as follows:

Burlington Resources received multiple ballot letters in regards to the Wilson #1 H Well, James D Wilson Lease . . . . The ballot listed Burlington Resources Oil & Gas Company (BROG) as a successor in interest to Southland royalties . . . . The remaining interest was sold from BROG to Samson Resources in September 1994 . . . . The

7 The interests of the other Appellees (Petro Texas, LLC; CH4 Energy II, LLC; TexCal South Texas, L.P.; and Woodbine) derive from PetroMax’s original interest. 8 Attorney J. Jan Jircik prepared a Leasehold Estate Title Opinion dated as of January 4, 2007 that concluded that Burlington possessed an interest in the Wilson Lease. CR:861. Attorney Ron Moore performed subsequent title work. In part of his work, Moore simply incorporated, without critical analysis, Jircik’s conclusions with respect to the Southland Assignment. Supp. CR 2:1355. That is industry practice. Id. When subsequently requested to focus on the Southland Assignment, Moore concluded that it “apparently conveys all of Southland’s right, title and interest in and to” the leases at issue. Supp. CR:2:1359. 9 It should be noted that Burlington’s immediate predecessor was ConocoPhillips and some of this initial review was undertaken by ConocoPhillips.

6

systems and files show that this Assignment conveyed all interest in the primary lease. All systems and files show that BROG does not have any interest in the proposed lease.

Supp. CR 1:121. Accordingly, Burlington responded that it owned no such

interest, and thus it would not participate. Supp. CR 1:121-22; Supp. CR 3:1671,

1684-85. This cycle was repeated several times over the next two years as

PetroMax, and subsequently Woodbine, proposed additional wells. See, e.g.,

Supp. CR 3, 1690-91, 1697-1706, 1774-77.

However, in late 2011, after several successful wells had been drilled,

Burlington changed its tune. Supp. CR 1:124. Supposedly based on a new

interpretation of the 1994 Assignment, Burlington took the position that it did, in

fact, own an interest in the Wilson Lease. Supp. CR 2:1807; Supp. CR 3:1740-43.

Furthermore, Burlington claimed that it had succeeded to Aztec’s rights under the

1975 Letter Agreement and that, pursuant to the AMI, it should have been offered

a 25% participation in all of the new wells. CR:12.

After further review of the 1994 Assignment, the PetroMax Defendants

determined that the Wilson Lease had been sold in the 1994 Assignment and thus

the AMI had terminated. Supp. CR 1:12.

Burlington filed suit seeking to enforce its alleged rights in the AMI.

CR:10-17. The PetroMax Defendants denied Burlington’s claims and filed

counterclaims seeking to quiet title. CR:313-20. Each side filed summary

7

judgment motions focusing mainly on whether the AMI remained in force and

effect. CR:479-528, Supp. CR 1:4-24. The trial court denied Burlington’s motion

and granted the PetroMax Defendants’ motion, ruling that Burlington does not own

any interest in the AMI and that the AMI had terminated.10 CR:1617-19. On a

joint motion by all parties, the trial court severed the remaining claims into a

separate lawsuit in order to render its summary-judgment ruling final. CR:1640-

45. Burlington then filed this appeal.

10 See Appendices B & C attached hereto.

8

SUMMARY OF THE ARGUMENT

The sole issue in this appeal is whether the 1994 Assignment conveyed

certain oil and gas leases or only four oil wells and not the underlying leases. If it

conveyed the described leases, as the trial court determined, the 1975 AMI

agreement on which Burlington’s claims rely terminated, and Burlington’s claims

cannot stand.

The Assignment on its face is unambiguously the sale of leases, including

the wells thereon, and not just the sale of individual wells separated from their

underlying leases. The Assignment explicitly sells and conveys “[t]he oil and gas

leases . . . particularly described on Exhibit ‘A’.” In turn, Exhibit A particularly

describes the leases subject to the sale. This language could not be clearer, and

certainly would not have been used if the intention were to sell only particular

wells and not the underlying leases.

The Assignment also expressly conveys “[t]he wells . . . on the Leases.”

Exhibit A lists four such associated wells, but this does not purport to be an

exclusive list of all the wells subject to the sale; it does not restrict the conveyance

to those four wells or deny conveyance of all other wells on the leases. To the

contrary, only a few wells were excepted from the sale. This was done pursuant to

the Assignment’s reservation clause, which reserved “from the Interests those

certain . . . interests . . . as specifically noted and reflected on Exhibit ‘A’.” The

9

only such reservation specifically noted and reflected on Exhibit A was the explicit

exception of the wells in the “Less and Excepted” clause.

This contractual language can have only one meaning. The Assignment

conveys the oil and gas leases particularly described on Exhibit A in their entirety,

including the four listed associated wells and all other wells on those leases,

subject only to the explicit exception of the specifically noted wells in the “Less

and Excepted” clause.

Burlington’s contrary interpretation departs from the Assignment’s plain

language and logical structure. Burlington’s argument, which rests on speculation

and empty theorizing about extrinsic historical facts, is wholly without merit.

10

ARGUMENT

I. PRINCIPLES OF CONTRACT CONSTRUCTION.

The dispute in this case turns on the interpretation of the Assignment. The

construction and interpretation of an unambiguous contract is a question of law for

the Court. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 664 (Tex. 2005)

(construing an oil and gas operating agreement); MCI Telecomms. Corp. v. Tex.

Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). Whether a contract is

ambiguous is a question of law for the Court. Friendswood Dev. Co. v. McDade &

Co., 926 S.W.2d 280, 282 (Tex. 1996); Coker v. Coker, 650 S.W.2d 391, 394 (Tex.

1983). The Supreme Court recently summarized the proper approach to contract

construction:

In construing a contract, we must ascertain and give effect to the parties’ intentions as expressed in the writing itself. In discerning the parties’ intent, “we must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless.” We begin our analysis with the contract’s express language. If we determine that the contract’s language can be given a certain or definite legal meaning or interpretation, then the contract is not ambiguous and we will construe it as a matter of law. But, “if the contract is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties’ intent.”

El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805-06 (Tex.

2012) (internal citations and quotations omitted). In this case, the Assignment can

be given a certain and definite legal meaning, and there is only one reasonable

interpretation.

11

II. THE ONLY REASONABLE INTERPRETATION OF THE ASSIGNMENT.

The Assignment begins with a very

broad grant. Specifically, it states

that Southland [Assignor] “does

hereby assign, transfer, grant, and

convey unto Samson [Assignee] all

of Assignor’s right, title and interest

in and to the following:”

(i) The “oil and gas leases” described on Exhibit A, including all the rights and interests that normally accompany a lease, which is defined as the “Leases.”

(ii) The wells and equipment on the Leases.

(iii) All the agreements related to, or affecting, the Leases.

(iv) The Assignor’s rights to certain revenues or gas attributable to Assignor’s interest in the Leases.

Supp. CR 1:64.

The sum total of these four

subsections is then defined as the

“Interests.”

The Assignment also has a narrow reservation clause excepting from

transfer only those certain interests “specifically noted and reflected on Exhibit

‘A’.” Supp. CR 1:64.

12

The first thing Exhibit A does, right at the top, is describe four leases:

Supp. CR 1:68. This list of the four leases being assigned corresponds to clause (i)

in the granting clause of the Assignment. Supp. CR 1:64, 68. Exhibit A also

includes a list of the key wells associated with these leases, set out at the bottom of

the exhibit, under the heading “Associated Wells.” Id. That list corresponds to

clause (ii) of the granting clause of the Assignment. Supp. CR 1:64, 68. Finally, the

“Less and Excepted” clause in Exhibit A identifies specific wells as exempted from

the Assignment and corresponds to the Assignment’s reservation11 clause. Id.

Numbered paragraph 1 of the Assignment sets forth an extensive

obligations/indemnity provision. Supp. CR 1:65. Pursuant to that provision,

Samson (the assignee) agreed to

11 Texas courts have long recognized that while there is a distinction between a reservation and an exception in a deed, the “terms are frequently used interchangeably and indiscriminately.” King v. First Nat’l Bank of Wichita Falls, 192 S.W.2d 260, 262 (Tex. 1946); see also Pich v. Lankford, 302 S.W.2d 645, 650 (Tex. 1957) (“The words ‘exception’ and ‘reservation’ are not strictly synonymous . . ., but they are often used interchangeably.”). It was Burlington itself that pointed this out to the trial court in its summary judgment briefing. CR:516.

13

assume and perform, any and all obligations and all of the liabilities ... of [Southland] under the Interests and existing oil and gas leases....

Furthermore, Samson agreed to

protect, defend, indemnify, and hold [Southland] harmless from and against any and all claims losses, damages ... attributable to or arising out of (i) ownership or operation of the Interests subsequent to the Effective Date, and (ii) [Samson’s] assumption of any liability or obligation in accordance with this paragraph.

Supp. CR. 1:65 (emphasis added). Because the term “Interests” was defined to

include all the Leases particularly described on Exhibit A, the wells and equipment

on the Leases, the agreements related to the Leases, and certain revenues related to

the Leases, Supp. CR 1:64, this indemnity provision further demonstrates that

Samson was acquiring all of Southland’s ownership interests with respect to those

leases, subject only to the narrow reservations clause.

In short, Southland conveyed all that it had related to the Interests to

Samson, and Samson accepted responsibility for it. Samson would not have

accepted responsibility for the operations on, and the liabilities of, the leases if it

14

was not receiving ownership of the leases. Nor would Samson have agreed to

indemnify Southland for claims arising from ownership of, or operations on, the

leases unless ownership of the leases was being transferred to it.

The PetroMax Defendants’ reading of the Assignment is the only

construction that conforms to the agreement’s plain language and logical structure.

Moreover, it harmonizes and gives meaning to each provision—the granting

clause, the reservation clause, the obligations/indemnity clause, the “Less and

Excepted” clause, and the “Associated Wells” listing. See J.M. Davidson, Inc. v.

Webster, 128 S.W.3d 223, 229 (Tex. 2003) (courts must examine the entire writing

in an effort to harmonize and give effect to all provisions). The Assignment can be

given a definite legal meaning. The granting clause states that Southland is

conveying all the leases described on Exhibit A, reserving only what is specifically

noted and reflected as being reserved. Exhibit A describes the four leases being

conveyed and refers to four associated wells on the leases, reserving only the

specifically identified wells in the “Less and Excepted” clause. There is no

ambiguity. Kachina Pipeline Co., Inc. v. Lillis, 471 S.W.3d 445, 450 (Tex. 2015).

III. BURLINGTON’S CONSTRUCTION IS NOT REASONABLE.

Burlington’s purported reading of the Assignment rests on a false premise. It

argues that because Exhibit A has two lists, one of oil and gas leases and another of

associated wells, one list must identify conveyed interests while the other list

15

identifies reserved interests. Appellant’s Brief at 11-12. This is a strained

misreading that ignores the Assignment’s language and logical structure. The two

lists in Exhibit A correspond to clauses (i) and (ii) of the Assignment’s granting

clause. Supp. CR 1:64, 68. Both lists identify conveyed interests. The first list on

Exhibit A “particularly described” the “oil and gas leases” being conveyed pursuant

to clause (i) of the Assignment; the second list identifies four of the “wells . . . on the

Leases” that are explicitly included in the conveyance pursuant to clause (ii) of the

Assignment. Id. The reserved interests subject to the Assignment’s reservation

clause are then separately identified in the “Less and Excepted” addendum to the list

of the leases being conveyed. Id. There is nothing difficult about this

straightforward reading of the Assignment and its Exhibit A.

Even so, Burlington argues that its contrary interpretation of the

Assignment—that only the four “Associated Wells” were assigned and no leases—is

the only reasonable interpretation, or is at least as reasonable as the interpretation of

the PetroMax Defendants. Appellant’s Brief at 29-30. But it is not. An assignment

conveying only four specific wells would never have been drafted in the manner of

the 1994 Assignment, with its primary focus on leases (including the Odom lease,

where none of the four “Associated Wells” was located).

16

A. Burlington’s Construction Requires Ignoring Essentially All of the Granting Clause.

The Assignment clearly states that

Southland is assigning the “oil and gas

leases ... described on Exhibit ‘A’.” Supp.

CR 1:64. In turn, Exhibit “A” describes

four leases. Supp. CR 1:68. The granting

clause goes so far as to define these leases,

and all rights, wells, equipment, and

agreements attendant to them, as the

“Leases.” Supp. CR 1:64. In fact, the

granting clause uses some form of the term

“lease” no fewer than fourteen times. Id.

Burlington’s construction requires the

Court to ignore all of this because,

according to Burlington, the reservation

clause essentially nullifies the entire Supp. CR 1:64.

granting clause rendering it effectively

surplusage. Rather, according to

Burlington, Southland was not assigning

any leases, only four wellbores.

17

Burlington’s argument that “Leases” actually means “wells” defies

credibility. If the intention really had been to assign just four wellbores, surely the

granting clause would not have looked anything like it does.

B. Burlington’s Construction Makes No Sense in Light of the Obligations/Indemnity Clause.

In the obligations/indemnity clause, Samson agreed to assume and perform

all of Southland’s liabilities and obligations in the Interests. Supp. CR 1:65.

Furthermore, Samson agreed to indemnify Southland for any claims, liabilities, or

obligations arising out of ownership or operation of the Interests. Id.

“Interests” is a defined term in the Assignment. It includes

(i) the leases described on Exhibit A (defined as the “Leases”);

(ii) the wells and equipment on the Leases;

(iii) all agreements related to the Leases; and

(iv) certain revenues related to the Leases.

Supp. CR 1:64. Moreover, the definition of “Interests” is not diminished or curtailed

in any way by the reservation clause. Id. Hence, when Samson agreed to these

obligations, it agreed to them with respect to all of the leases described in Exhibit

A—the Odom, the Gibbs, the Wilson, and the Buchanan. Supp. CR 1:65, 68.

If all that Samson received in this Assignment was four specific wellbores,

and not the Leases themselves, it would make no sense for Samson to assume the

obligation to perform under the Leases and to indemnify Southland for claims

18

arising out of the ownership or operation of the Leases. It makes even less sense

given that none of the Associated Wells was on the Odom Lease. Supp. CR 2:12;

RR 36. Why would Samson agree to any obligations with respect to the Odom

Lease when it was not receiving any well or other interest from that lease?

The only reasonable construction is that Southland was assigning to Samson

all of its interests in the Leases and saying—it is your baby now.

C. Burlington’s Construction Does Not Explain Why Exhibit A Would Switch the Order From the Text, or Adequately Explain What “Associated Wells” Is Supposed to Mean.

This agreement was an assignment. Hence, it is hardly any surprise that the

text of the Assignment starts off, right out of the box, with a description of what is

being assigned. Supp. CR 1:64. Only after describing what is being assigned does

the text of the Assignment discuss what is being reserved. Id.

One might expect that Exhibit A would follow the same structure. But,

according to Burlington, the drafters of the Assignment, for some unexplained

reason, and without identifying what they were doing, switched the order12 in

Exhibit A. Hence, according to Burlington, this is how the Assignment is to be

construed:

12 The PetroMax Defendants contend that the leases described at the top of Exhibit “A” were being assigned, including the wells on those leases, specifically including the “Associated Wells” identified in the Exhibit. The wells being reserved from the Assignment were identified in the “Less and Excepted” addendum immediately below the descriptions of the leases being assigned.

19

Supp. CR 1:64, 68.

But it makes no sense that the drafters of the Assignment would switch the

order from the text of the Assignment to Exhibit A. Moreover, it makes no sense

that in an assignment, Exhibit A would focus on, and place front and center, not

what was being assigned, but rather what was being reserved.

Also, if the intent were to assign just the four wells, why would Exhibit A

list those four wells at the bottom of the exhibit in what looks like a footnote under

the heading “Associated Wells”? Why not call them “Assigned Wells” if that were

the intent? And why not list them first?

Finally, Burlington’s explanation of what those wells were “associated” with

is inadequate. According to Burlington, they were not “associated” with anything

referenced in the Assignment itself. Rather, Burlington contends that they were

“associated” with an auction that is nowhere identified in the Assignment.

20

Appellant’s Brief at 32. The PetroMax Defendants’ construction, that these key13

wells were “associated” with the leases to be assigned, described three-inches up

the page on Exhibit A, is the only reasonable interpretation.

D. Burlington Does Not Explain Why It Would Be Necessary to Reserve the Odom Lease.

Supp. CR 1:68.

According to Burlington, the four leases described at the top of Exhibit A

were being reserved, and only the four “Associated Wells” listed at the bottom

were being conveyed. But not a single one of those four wells was on the Odom

Lease. Supp. CR 2:12; RR 36. Hence, why would it be necessary to reserve the

13 Burlington argues that this list of “Associated Wells” could not have been a list of all wells on the identified leases because it did not identify the Wilson #1 Well. Appellant’s Brief at 26. But this listing was not intended to be a listing of all wells. Rather, it was only a listing of the key wells associated with the leases. The Wilson #1 well was subject to a 600% after payout penalty when Southland went non-consent. Id. at 33; CR:1417. Hence, it might never have had any value.

21

Odom Lease when it was not implicated by what was being conveyed? Burlington

does not even attempt to address this question.

E. Burlington’s Construction Renders the “Less and Excepted”

Clause Essentially Meaningless, or Completely Misleading.

Supp. CR 1:68.

Burlington argues that the “Less and Excepted” clause is not a true

reservation because the assignor had no continuing ownership in the wells

identified in that clause. Appellant’s Brief at 24. That is a trivial debating point

that ignores the substance of what the parties to the Assignment were doing.

Southland reserved, or excepted, the named wells in the “Less and Excepted”

clause precisely because it no longer owned them and therefore was unable to

convey them.

Burlington’s argument with regard to this point rests in its entirety on the

boilerplate language “reserves and retains unto itself.” Id.; Supp. CR 1:64. To be

sure, the assignor could not retain an interest it had already lost or conveyed away,

22

but Southland did, in fact, continue to own an interest in these wells—a 5%

override. Supp. CR 1:126-34; Supp. CR 2:571-74. Burlington ignores this

undisputed evidence. Southland did retain unto itself an interest in those wells that

was excepted from the Assignment.14 However, even if Southland had not

continued to own that interest, the boilerplate phrase—retains unto itself—is

merely a lawyer’s unnecessarily elaborate way of saying “excepts from transfer.”

It would be nonsensical to read that phrase, as Burlington apparently does, to deny

a seller the power to exclude from the terms of a sale a property it no longer owns.

Moreover, Burlington’s argument just does not make sense. Essentially,

Burlington argues that the particularized list of leases itself must be the reservation,

and that the only purpose of the “Less and Excepted” clause was to clarify what

was not included in the leases that were being reserved. Appellant’s Brief at 24.

But it would not be necessary to clarify what was not included in leases that were

not being assigned. Rather, this provision was only necessary to clarify what was

not included in what was being assigned, which was the leases listed “above.”

14 Southland sold this interest to Tri-Union in a subsequent transaction. Supp. CR 1:170-75; Supp. CR 2:691-92. An internal Southland email states that the purpose of this transaction was to sell the remainder of Southland’s interest in the original leases. CR:2015. Thus, the fact that this 5% override was the only interest sold to Tri-Union is consistent with the conclusion that the 1994 Assignment conveyed Southland’s interest in the four leases, not just the specific wells.

23

In fact, if the drafters of this Assignment were “less and excepting”

something from interests that were being reserved, then the logical conclusion

would be that the wells identified in the “Less and Excepted” clause were, in fact,

being assigned. But Burlington itself admits that those wells were not subject to

conveyance under the Assignment.

F. The Leases Cannot Be What Was Reserved Because They Cannot Be “From” the Wells.

Supp. CR 1:64.

The granting clause defines the term “Interests” to include (i) the Leases

described on Exhibit A; (ii) the wells and equipment on the Leases; (iii) all

24

agreements related to the Leases; and (iv) certain revenues related to the Leases.

The reservation clause then states that what is reserved is “from the Interests.”

Supp. CR 1:64.

Supp. CR 1:68.

Burlington’s construction is that what was assigned was the four

“Associated Wells” listed at the bottom of Exhibit A and what was reserved is the

four leases at the top. But that simply cannot work. For instance, because none of

the “Associated Wells” are on the Odom Lease, the Odom Lease cannot be “from”

the “Associated Wells.” More generally, however, the leases are broader than just

the four “Associated Wells.” While the “Associated Wells” could be “from” the

leases, the leases could not be “from” the “Associated Wells.” As an analogy,

Texas can be “from” the United States, but the United States cannot be “from”

Texas.

25

In the end, the Assignment rather clearly says that Southland was conveying

to Samson the “Leases” described in Exhibit A, and all that normally comes with

leases. Burlington spent a mountain of ink trying to convince the trial court that,

even though the Assignment did in fact say this in the granting clause, it took it all

away in the reservation clause and all that was conveyed was four specific wells.

The trial court properly rejected Burlington’s construction, though, because it is

unreasonable. It makes a mockery of the Assignment’s structure, is at odds with

its language, and renders various provisions of the Assignment either meaningless

or nonsensical.

IV. PAROL EVIDENCE CANNOT BE USED TO ALTER THE PLAIN MEANING OF THE ASSIGNMENT AND DOES NOT CHANGE THE EQUATION IN ANY EVENT.

“In construing a contract, the primary concern of the court is to ascertain

the true intentions of the parties as expressed in the instrument.” J.M. Davidson,

128 S.W.3d at 229. “‘In the usual case, the instrument alone will be deemed to

express the intention of the parties for it is the objective, not subjective, intent that

controls.’” Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd.,

352 S.W.3d 462, 469 n.25 (Tex. 2011) (quoting Sun Oil Co. (Delaware) v.

Madeley, 626 S.W.2d 726, 731 (Tex. 1981)); Matagorda Cnty. Hosp. Dist. v.

Burwell, 189 S.W.3d 738, 740 (Tex. 2006). If a “contract is so worded that it can

be given a definite or certain legal meaning, then it is not ambiguous.” Kachina

Pipeline Company, Inc. v. Lillis, 471 S.W.3d 445, 450 (Tex. 2015) (internal

26

quotations omitted). Moreover, the “parol-evidence rule precludes considering

evidence that would render a contract ambiguous when the document, on its face,

is capable of a definite legal meaning.” Americo Life, Inc. v. Myer, 440 S.W.3d 18,

22 (Tex. 2014).

The rule does not prohibit consideration of surrounding circumstances that

aid in the construction of the contract’s language by showing context. Sun Oil, ,

626 S.W.2d at 731; Houston Exploration, 352 S.W.3d at 469. However, there are

limits. Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d

445, 451 (Tex. 2011). While

[u]nderstanding the context in which an agreement was made is essential in determining the parties’ intent as expressed in the agreement, [] it is the parties’ expressed intent that the court must determine. Extrinsic evidence cannot be used to show that the parties probably meant, or could have meant, something other than what their agreement stated.

Id. (emphasis in original). Hence, the Court can only consider “surrounding

circumstances that inform, rather than vary from or contradict, the contract text.”

Houston Expl., 352 S.W.3d at 469.

A. The Alleged Evidence of “Surrounding Circumstances.”

1. The Auction Catalog.

In this case, Burlington urges the Court to consider an auction catalog as

evidence of surrounding circumstances. Appellant’s Brief at 12, 23, & 33. But

there is only one reasonable interpretation of the Assignment and it can be given a

27

definite legal meaning. Specifically, the Assignment conveyed four leases to

Samson with limited exceptions. Burlington cannot resort to extrinsic evidence of

surrounding circumstances to create an ambiguity, or vary or contradict the text.

Id.

Moreover, consideration of this catalog does not aid in the construction of

the Assignment. The catalog is a hearsay marketing brochure developed by a third

party, based on information provided by numerous sellers that the clearinghouse

did not purport to verify, over two decades ago. CR:1445-1523. It simply does

not, by itself, provide sufficient context of anything. It certainly does not, for

instance, support Burlington’s construction of the Assignment.

Essentially, Burlington notes that the auction catalog, which listed some 500

oil and gas properties for sale from multiple sellers, listed four Southland wells—the

Gibbs Bros. #1, Wilson #3, Wilson #2, and Buchanan #1. Because the catalog only

listed these wells, and does not reference the leases on which the wells were situated,

Burlington argues that this must mean that only those four wells were up for auction,

and not any Southland leases. Appellant’s Brief at 27. Burlington further reasons

that because there is a header on the first page of the Assignment identifying those

wells, and they are listed on Exhibit A under the heading “Associated Wells,” that

must mean that those four wells were all that was conveyed in the Assignment.

Appellant’s Brief at 12, 23, & 27-28; Supp. CR 1:64, 68.

28

Burlington’s syllogism does not work. First, neither this Court, nor

Burlington, nor the auction participants themselves, can/could rely on the catalog

as providing a completely accurate description of what was being sold. For

instance, the catalog made the following disclaimers:

CR:1453-54. Moreover, the bottom of every page of property listings in the

catalog bore the following disclaimer:

29

CR:1459.

Instead, the catalog stated that there would be copies of the sale documents

at the auction for review prior to the bidding. CR:1446.

CR:1454.

The message was clear. It would be the sale documents the sellers would

bring to the auction that would control what was actually sold, not the auction

catalog. Indeed, Southland executed and notarized the Assignment on

September 9, 1994—five days prior to the auction. Supp. CR 1:66-67. Moreover,

Brian Exline, who executed the Assignment on behalf of Samson, testified that he

reviewed the Assignment prior to making the purchase, and Samson executed the

Assignment on the day of the auction. Supp. CR 1:66; Supp. CR 2:1364.

Another problem is that Burlington’s argument assumes that when the

catalog listed the wells, and not the underlying leases, that meant that the wells

would be sold separately from the leases. But in actual fact, multiple listings in the

catalog identified significant numbers of wells for sale as being “WBO” or

“Wellbore Only.” See, e.g., CR:1467, 1475-77, 1485, 1489-95, 1498, 1508-09,

30

1512-13, and 1515-19. That was not the case with the wells at issue here,

suggesting that more than just the wells would be sold. CR:1497.

Indeed, that was confirmed by the testimony of Brian Exline who, in 1994,

was employed by Samson, the purchaser, as a Supervisor—Special Projects. Supp.

CR 2:1362. In that capacity, he executed the Assignment on Samson’s behalf.

Supp. CR 1:66. He testified that Wellbore Only properties sell for less than those

that include the leasehold. Supp. CR 2:1364-65. He further testified that had these

properties been Wellbore Only, Samson may not have purchased them. Id. But

the auction catalog does not list them as being Wellbore Only. Id.; CR:1497. In

fact, Exline confirmed that he reviewed the Assignment prior to the purchase and

concluded that it was not a Wellbore Only assignment. Supp. CR 2:1364-65.

Most importantly, however, Exline understood that the Assignment “convey[ed]

the wells and the leases with only a limited exclusion.” Id. at 1365.

2. The Understanding of the Purchaser and Seller.

In the end, perhaps the best evidence of the surrounding circumstances to

this sale of oil and gas interests is the understanding of the buyer and the seller.

These are not the subjective opinions of interested parties to the litigation. Neither

Samson nor Southland has any dog in this fight. And Southland clearly believed it

sold, and Samson clearly believed it purchased, the four leases described on

Exhibit A, and all their wells and equipment and related agreements, save for the

31

specific wells set out in the “Less and Excepted” carve-out. Supp. CR 2:1363-64;

Supp. CR 1:115.

It may have been that the four “Associated Wells”—the Gibbs Bros. #1,

Wilson #3, Wilson #2, and Buchanan #1—were what got Samson’s attention and

made it interested in the purchase. But that does not mean that Samson would not

have been interested in acquiring the underlying leases on which those wells were

situated. Moreover, it may be that, because these were the important wells

underlying the purchase, the drafters of the Assignment, in an abundance of

caution, listed those four wells in a tag line on the front page of the Assignment

and in the “Associated Wells” clause at the bottom of Exhibit A to make it

abundantly clear that the these four wells were among the assets being conveyed.

Supp. CR 1:64, 68. It was twenty-one years ago and we may never know.

But the point is, both Samson and Southland, the actual participants in the

transaction, were aware of the auction catalog at the time of sale. Despite this,

they interpreted the Assignment as assigning the four leases described in

Exhibit A, and not just the four “Associated Wells.” If this evidence of

“surrounding circumstances” did not aid the parties to the transaction in reaching

the interpretation Burlington now places on the Assignment, it is hard to see how it

could aid this Court in arriving at that interpretation.

32

In short, the Assignment unambiguously states that Southland was

conveying the leases described on Exhibit A to Samson, and both Samson and

Southland believed that the auction catalog was consistent with that proposition.

Hence, the auction catalog provides no support whatsoever for disturbing the trial

court’s proper construction of the Assignment.

B. The Post-Transaction Parol Evidence.

The confused history of the parties’ understandings or misunderstandings

long after the execution of the Assignment15 can shed no light on the proper

construction of the 1994 Assignment.

Basically, the PetroMax Defendants, based on the faulty Jircik title opinion,

took actions, over a period of several years, consistent with the understanding that

Burlington owned an interest in the Wilson Lease. However, a title opinion is not

proper evidence in the consideration of an unambiguous contract or deed. Garza v.

Prolithic Energy Co., L.P., 195 S.W.3d 137, 146 (Tex. App.—San Antonio 2006,

pet. denied).

For its part, Burlington, relying on the land files from Southland and

subsequent parties in Burlington’s chain of title, took the position, over a period of

15 Southland and Samson executed this Assignment in 1994. The confusion that is the subject of the post-Assignment parol evidence is dated long after 1994 and relates to parties other than Southland or Samson.

33

years, that it did not own an interest in the Wilson Lease. See Supp. CR3:308, 310,

312, 314-15.

After the success of the wells drilled by PetroMax, Burlington suddenly got

motivated. It re-examined everything, abandoned its long-held position, and then

espoused the position the PetroMax Defendants originally advanced based on the

faulty Jircik title opinion. This prompted the PetroMax Defendants to re-examine

everything, abandon their initial position, and espouse Burlington’s initial position.

In the end, the Court should ignore the post-contract actions of both sides to

this dispute. While this history may shed light on why Burlington filed this action,

it sheds no light on, and cannot change, the unambiguous meaning of the

Assignment. In re Dillard Dept. Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006)

(“The objective intent as expressed in the agreement controls the construction of an

unambiguous contract, not a party’s after-the-fact conduct.”). The Assignment is

unambiguous, and the parol evidence rule precludes consideration of the post-

contract conduct of both sides. Americo Life, 440 S.W.3d at 22.

C. This Court Should Not Rely on Parol Evidence in Construing a Deed.

The Assignment is a title document filed of record in the Madison County

Clerk’s office. Supp. CR. 1:64. Although some courts have consulted evidence of

surrounding circumstances in construing an unambiguous deed, “the majority of

deed and mineral deed cases clearly prefer the route of using other canons and not

34

extrinsic evidence or surrounding circumstances to ascertain the intent of the

parties.” Bruce M. Kramer, The Sisyphean Task of Interpreting Mineral Deeds

and Leases: An Encyclopedia of Canons of Construction, 24 TEX. TECH L. REV. 1,

14 (1993). There is an important policy reason for this: “Title examiners would

no longer be able to rely on the written word. Individual adjudication of deeds

would lead to disparate results depending on factors extraneous to the instrument.”

Id. at 19.

In this case, relevant canons of construction include the following:

 The assignment should be interpreted to convey the greatest possible estate. See Day & Co., Inc. v. Texland Petroleum, Inc., 786 S.W.2d 667, 668 (Tex. 1990).

 Uncertain reservations or exceptions fail. See Lewis v. Midgett, 448 S.W.2d 548, 551-52 (Tex. Civ. App.—Tyler 1969, no writ).

 The assignment must be construed against Burlington (the grantor)

and in favor of Samson (the grantee). See Gonyea v. Kerby, No. 10-12-00182-CV, 2013 WL 4040117, at *3 (Tex. App.—Waco Aug. 8, 2013, pet. denied); State v. Dunn, 574 S.W.2d 821, 824 (Tex. Civ. App.—Amarillo 1978, writ ref’d n.r.e.).

Each of these canons of construction supports the construction of the PetroMax

Defendants that the Assignment conveyed the four leases described in Exhibit A,

not just the four wells under the “Associated Wells” heading.

35

V. BURLINGTON IS NOT ENTITLED TO JUDGMENT ON ITS 25% ISSUE.

Burlington also seeks rendition of a judgment that it is entitled to be offered

the full 25% interest that Buttes agreed to offer to Aztec in the 1975 Letter

Agreement, even though Burlington at most owns only a fraction of Aztec’s

original interest. Appellant’s Br. at 34-35. The trial court denied Burlington’s

motion on this issue. See id. at xii (Burlington’s Issue 2 asks: “Did the trial court

err in denying Burlington summary judgment on this issue?”); CR:1618.

This issue is not properly here. Appellate courts normally do not review

denials of summary judgment. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623,

625 (Tex. 1996). This rule has an exception for cases where the parties file cross-

motions on the same issue. Valence Operating Co. v. Dorsett, 164 S.W.3d 656,

661 (Tex. 2005). But the PetroMax defendants did not file a cross-motion on this

issue (Supp. CR 1:8), so the exception does not apply. See Mitchell v. Mitchell,

445 S.W.3d 790, 801 (Tex. App.—Houston [1st Dist.] 2014, no pet.) (“[T]he

cross-motion exception is inapplicable . . . because the parties did not move for

summary judgment on the same issue . . . .”). The Court should decline to reach

the issue.

This issue will not arise at all if the Court rejects Burlington’s Issue 1, as it

should. But even if Burlington were to prevail on Issue 1, the procedural posture

of the case would still make it inappropriate for the Court to reach Issue 2.

36

Finally, and in any event, Burlington’s argument in this regard lacks merit.

In the 1975 Letter Agreement, Buttes agreed to offer Aztec 25% of interests

acquired in the AMI in the future. CR:593. Under Burlington’s construction, every

successor to Aztec would be entitled to be offered 25% of any interests acquired

within the AMI by Buttes or its successors. This would require Buttes’s successors

to offer more than 25% of interests they acquire and would impermissibly change

the terms of the 1975 Letter Agreement. See Am. Mfrs. Mut. Ins. Co. v. Schaefer,

124 S.W.3d 154, 161 (Tex. 2003) (holding that courts “may neither rewrite the

parties’ contract nor add to its language”); Capitan Enters., Inc. v. Jackson, 903

S.W.2d 772, 776 (Tex. App.—El Paso 1994, writ denied) (holding that rights of

non-assigning party “are neither enhanced nor diminished by the assignment”).

Burlington’s construction is unreasonable and even absurd. There are more

than five assignees of Aztec’s interests in the land covered by the AMI (including

Defendant Woodbine). Supp. CR 3:2147-2763. Under Burlington’s construction,

Defendant Woodbine would be required to offer itself 25% of any interest that it

acquires. Moreover, Burlington’s construction would require each of Aztec’s

successors to be offered 25% of any interest acquired by a successor to Buttes,

which would be mathematically impossible. See Frost Nat’l Bank v. L&F

Distribs., Ltd., 165 S.W.3d 310, 313 (Tex. 2005) (rejecting a construction of a

contract that would be unreasonable, inequitable, and oppressive).

37

PRAYER FOR RELIEF

The trial court properly construed the unambiguous Assignment. In that

Assignment, Southland conveyed the leases described in Exhibit A, along with

their wells, equipment, and related agreements, to Samson, save for a narrow

exception not relevant here. That is the only reasonable interpretation of the

Assignment. Accordingly, Burlington has no interest in the Gibbs, Wilson or

Buchanan leases. Consequently, there are no longer any leases jointly owned

between the parties to the 1975 Letter Agreement, and the AMI created by that

agreement expired. Hence, Burlington’s claims, which all depend upon the

continued existence of the AMI, have no basis. The Court should affirm. 16

16 Should the Court determine that the Assignment is ambiguous, it should remand. Likewise, should the Court somehow determine that Burlington’s construction of the Assignment is the only reasonable construction, it should also remand in light of the numerous affirmative defenses asserted by the PetroMax Defendants, which the court below had no occasion to consider.

38

Respectfully submitted, BECK REDDEN LLP

By: /s/ David M. Gunn David J. Beck State Bar No. 00000070 dbeck@beckredden.com David M. Gunn State Bar No. 08621600 dgunn@beckredden.com Thomas E. Ganucheau State Bar No. 00784104 tganucheau@beckredden.com Jim Taylor State Bar No. 00788512 jtaylor@beckredden.com 1221 McKinney, Suite 4500 Houston, TX 77010-2010 (713) 951-3700 (713) 951-3720 (Fax) Counsel for Appellees, PetroMax Operating Co., Inc., Petro Texas LLC, and CH4 Energy II, LLC

CANTEY HANGER LLP

By: /s/ Brad D’Amico Brad D’Amico State Bar No.00783923 bd@canteyhanger.com 1999 Bryan Street, Suite 3300 Dallas, TX 75201 (214) 978-4100 (214) 978-4150 (Fax) Counsel for Appellee PetroMax Operating Co., Inc.

39

HANKINSON LLP

By: /s/ Deborah G. Hankinson Deborah G. Hankinson State Bar No. 00000020 dhankinson@hankinsonlaw.com Stephanie Dooley Nelson State Bar No. 24002006 snelson@hankinsonlaw.com 750 N. St. Paul St., Suite 1800 Dallas, Texas 75201 (214) 754-9190 (214) 754-9140 (Fax)

PIERCE & O’NEILL, LLP Jesse R. Pierce State Bar No. 15995400 jpierce@pierceoneill.com Brian K. Tully State Bar No. 24039217 btully@pierceoneill.com 4203 Montrose Boulevard Houston, Texas 77006 (713) 634-3600 (713) 634-3601 (Fax)

Counsel for Appellee TexCal Energy South Texas, L.P.

40

THOMPSON & KNIGHT LLP

By: /s/ Greg W. Curry Greg W. Curry State Bar No. 05270300 greg.curry@tklaw.com Richard B. Phillips, Jr. State Bar No. 24032833 rich.phillips@tklaw.com Gregory D. Binns State Bar No. 24027148 greg.binns@tklaw.com One Arts Plaza 1722 Routh Street, Suite 1500 Dallas, Texas 75201 (214) 969-1700 (214) 969-1751 (Fax)

ATCHLEY, RUSSELL, WALDROP & HLAVINKA, LLP Jeffery C. Lewis State Bar No. 12280950 jlewis@arwhlaw.com 1710 Moores Lane Texarkana, Texas 75503 (903) 792-8246 (903) 792-5801 (Fax) Counsel for Appellee Woodbine Acquisition, LLC n/k/a MD America Energy LLC

41

CERTIFICATE OF SERVICE

I hereby certify that on December 21, 2015, a true and correct copy of the above and foregoing Brief was forwarded to all counsel by the Electronic Service Provider, if registered, otherwise by email, as follows:

Kirsten M. Castañeda Roger D. Townsend kcastaneda@adjtlaw.com rtownsend@adjtlaw.com ALEXANDER DUBOSE JEFFERSON ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP & TOWNSEND LLP 4925 Greenville Avenue, Suite 510 1844 Harvard Street Dallas, TX 75206 Houston, TX 77008

John R. Mercy Fred Hagans jmercy@texarkanalawyers.com fhagans@hagans-law.com MERCY CARTER TIDWELL, L.L.P. Kendall C. Montgomery 1724 Galleria Oaks Drive kmontgomery@hagans-law.com Texarkana, TX 75503 HAGANS BURDINE MONTGOMERY & RUSTAY, P.C.

Vincent L. Marable III 3200 Travis, Fourth Floor trippmarable@sbcglobal.net Houston, TX 77006 PAUL WEBB, P.C. 221 N. Houston Street Wharton, TX 77488

Counsel for Appellant,

Burlington Resources Oil & Gas Company LP

/s/ David M. Gunn David M. Gunn

42

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of Tex. R. App. P. 9.4 because it contains 7,589 words, excluding the parts of the brief exempted by Tex. R. App. P. 9.4(i)(2)(B).

2. This brief complies with the typeface requirements of Tex. R. App. P.

9.4(e) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2007 in 14 point Times New Roman font.

Dated: December 21, 2015.

/s/ David M. Gunn David M. Gunn Counsel for Appellees, PetroMax Operating Co., Inc., Petro Texas, LLC, and CH4 Energy II, LLC

No. 06-15-00044-CV

IN THE SIXTH COURT OF APPEALS TEXARKANA, TEXAS

BURLINGTON RESOURCES OIL & GAS COMPANY LP, Appellant,

v.

PETROMAX OPERATING CO., INC., WOODBINE ACQUISITION, LLC, PETRO TEXAS, LLC, CH4 ENERGY II, LLC, AND TEXCAL ENERGY SOUTH TEXAS L.P., Appellees.

On Appeal from the 12th District Court, Madison County, Texas Trial Court Cause No. 12-13130-012-10

APPENDIX

Tab

A Assignment and Bill of Sale (Supp. CR 1:64-69) B Order Granting Defendants’ Motion for Summary Judgment on Title Issues (CR 1617) C Order Denying Burlington’s Motion for Partial Summary Judgment Seeking Various Declarations (CR 1618-19)

TAB A

Assignment and Bill of Sale (Supp. CR 1:64-69)

64

".'·'

, ...,

~OL 417 "''' 709

V»>fi Name; BUCHANAN 1, GIBBS BROS. 1, WlLSON JAMES 2AND WILSON JAMES 3

ASSIGNMENT AND BILL OF SALE

STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS THAT:

COUNTY OF MADISON §

SOUTHLAND ROYALTY COMPANY, a Delaware Corporation, whose address is 400 N. Sam Houston Parkway East, Suite 1200, Houston, Texas 77060 (''Assignor"), for and in consideration of ONE HUNDRED DOLLARS ($100.00) and other good and valuable consideration, receipt of which is here acknowledged, does hereby assign, transfer, grant ~d convey unto whose address is \.>::. ~<._>;::, c.; f'Assignee"), all of Assignor's right. title and interest mand to the following:

(i) The 011 and gas leases, leasehold interests, rights. and interests attributable or allocable to the oil and gas leases or leasehold interests by virtue of pooling, unitization, communitization, and operating agreementS, licenses, pennits, and other agreements, all more particularly described on Exhibit "A" hereto, llmited as to the lands and depths indicated on Exhibit •A" (collectively the •Leases"), together with identical undivided interests in and to aJI the property and rights incident thereto, including, but not limited to, all rights in, to and under an i agreements, product purchase and sate contracts, leases, permits, ' rights-of~way, easements, licenses, farmouts, options, orders, and other contracts or agreements of a similar nature to the extent same relate to the Leases;

The wells, equipment, materials and other personal property, fixtures and improvements on the Leases as of the Effective Date (as hereinafter defined), appurtenant thereto or used or obtained in connection with the Leases or with the production, treatment, sale or disposal of hydrocarbons or waste produced therefrom or attributable thereto, and all other appurtenances thereunto belonging (the "Equipment'}; provided, however, Equipment shall not include vehicles, communications equipment, toots. warehouse stock, compressors or leased equipment located on the Leases;

Qii) All unitization, communitization, pooling, and operating agreements, and the units created thereby which relate to the Leases or interests therein described on Exhibit "A• or which relate to any units or wells located on the leases, including any and all units formed under orders, regulations, rules, and other official acts of the governmental authority having jurisdiction, together.with any right, title and interest created thereby in the Leases; and

Qv) All of Assignor's rights to claim revenues or gas resulting from any underproduction attributable to Assignor's interest in the Leases.

All of Assignor's interest in the above-mentioned assets is herein collectively referred to as the "Interests". .Assign~;Jr reseJVes and retains unto itself from the Interests those certain lands, leases, -properties, interests, leasehold rights, depths or fonnations as speci1ically noted and reflected on:Exhibit "A", .and the right of joint use of any agreements assigned hereunder where needed f.orthe exploration, development, and operation of any rights or acreage (either horizontally or verti.~11y) retain~ by Assignor or where needed in order to exercise ancillary rights in, or for .access to, adjoining· or-nearby properties.owned by Assignor.

TO HAVE.AND TO HOLD the Interests unto Assignee, its successors and assigns, forever, ,s_ubject to ·the fol)pwing terms and conditions:

SM:ASSIGNR.Q9C R~~ 8130194

-1-

11-'lliAI~'eOrrect Copy oi Original Filed in Madison County ClerK's Office

65

--. -~--.-. ----------

..,

'IOL 417 t>•» 710

1. This Assignment is accepted subject to, and Assignee agrees to assume and perform any and all of the liabilities and obligations, or alleged or threatened Dabilities and. obligations, of Aulgnor under the Interests and existing oi1 and gas leases assignments, operating agreements, product purchase and sale contracts, leases' permits, rights-of-.way, licenses, easements, options, orders, and any othe~ agreements or contracts attributable to and affecting the lnteres1s, inclu<;ting but not limited to, any and aD obligations (i) to pay and deliver royalties, overr1ding royalties, non-parUcipa:ting royalties, and other burdens on production, 00 in connecfion with or alising out of balancing of overproduction or underproduction from the Interests, and Oii) in compliance with aU laws and governmental regulations With respect to the Interests including, but not limited to, the lawful plugging and abandonment of oil and gas wells and the restoratio.n of the surlace of the land as nearly as possible to its prelease condition, whether or not such liabirlties aOO obrtgations, or alleged or threatened liabilities and obligations, are caused by Assignor's negligence and whether or not such liabilities and obligations, or alleged or threatened liabiTd:ies and obligations, arise .during the period of, or from, or in connection with Assignor's ownership or operation of the Interests. Without fimitation of the foregoing, Assignee agrees to assume and perform any and an of the liabilities and obligations. or alleged or threatened liabilities and obligations, of Assignor for claims., losses, damages, costs, expenses, diminutions in value, suits, and causes of action of any kind or character, with respect to the environmental condition of the Interests, regardless of when the events occurred that caused such cond'Jtion to exist and whether or not caused by or atbibutable to Assignor's negligence. Assignee shall, to the fullest extent permitted by taw, protect, defend, indemnify and hold Assignor and its directors, officers, employees, agents and representatives of each of them, harmless from and against any and all daims, losses, damages, costs, expenses, diminutions in value, suits, causes of action or judgments of any kind or character with respect to any and all liabilities and obOgations or alleged or threatened tiabftfties and obr~gation~ inc:luding, but not limited to, any interes~ penalty and any attorneys' fees and other costs and e>cpenses incurred in connection with investigating or defending any claims or actions, whether or not resulting in any liability, attributable to or arising out of (i) ownership or operation of the Interests subsequent to the Effective Date, and (ii} Assignee's assumption of any liability or obligation in accordance with this paragraph.

THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS ASSIGNMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE GROSS, . ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ASSIGNOR.

2. THIS ASSIGNMENT AND BILL OF SALE IS EXECUTED, DELIVERED, AND ACCEPTED WITHOUT ANY REPRESENTATION, W~TY OR COVENANT OF TITLE OF ANY KIND OR NA1URE, EITHER EXPRESS, IMPLIED OR STA1UTORY. THE INTERESTS ARE BEING CONVEYED ANO ASSIGNED TO AND ACCEPTED BY THE ASSIGNEE IN THEIR "AS IS, WHERE IS" CONDITION AND STATE OF REPAIR, AND WITH ALL FAULTS AND DEFECTS, WITHOUT Af{'( REPRESENTATION, WAAJ'Wfrf OR COVENANT OF ANY KIND OR NA1URE, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MARKETABILITY, QUALITY, CONDITION, MERCHANTABILITY, AND/OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. IT IS UNDERSTOOD AND AGREED THAT ASSIGNEE -~ SHALL ACCEPT ALL OF THE SAME IN THEIR "AB IS, WHERE IS" CONDITION AND STATE OF REPAIR AND WITH ALL FAULTS AND DEFECTS, INCLUDING, BUT NOT LIMITED TO, THE PRESENCE OF NA1URAU.Y OCCURRING RADIOACTIVE MATERIAL (NORM). IN ADDITION, ASSIGNOR MAKES NO REPRESENTATION, COVENANT OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA DELIVERED TO ASSIGNEE WITH RESPECT TO THE INTERESTS, OR CONCERNING THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES, IF At-ff, ATTRIBUTABLE TO 11-IE INTERESTS, OR THE ABILITY OF THE INTERESTS TO PRODUCE HYDROCARBONS; OR THE PRICES WHICH ASSIGNEE IS OR WILL BE ENTITLED TO RECEIVE FOR ANY SUCH HYDROCARBONS.

3. TO THE EXTENT APPLICABLE TO THE INTERESTS OR ANY PORTION THEREOF,

2

' A True and Correct I Copy at Original -~ Filed in Madison . ---.,-,_,..-.----,.-.,.-.,.--=-"""""------------eoo-n_ty..,.C-Ie_rl<'s_Ofli"""""ce,_--

;,:'

66

.......

. ..

ASSIGNEE HEREBY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 TilROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVIED), TEXAS BUSINESS & COMMERCIAL CODE.

4. This Assignment and Sill of Sale shall inure to the benefit of and be binding upon the parties hereto, their heirs, successors and assigns.

5. This Assignment and Bill of Sale may _be executed by Assignor and Assignee in any number of counterparts, each of which shall be deemed an original instrument. but all of which together shall constitute one and the same instrument.

-I"'

IN WlTNESS WHEREOF, this instrument is executed the ....:1__ d:::.y of September, 1994, but shaD be effective as of the 1st day of September, 1994 (the "Effective Date").

ASSIGNOR SOUTHLAND ROYALTY COMPANY ATTEST: By: _ _ _ _ _ __ By: Name: Kent Beers Title: AttomeyMjn..fact

ASstqNEE

~h"SF> ~"i?-SN-'-~5S ~~~~~ ATTEST:

~:~~g·~2f·

By: _ _ _ _ _ _ __ _

!

'.

A True and Correct Copy o1 Oliginal Rled in MadisOn County Clerk's Office

67

-~---· --'---- ,_,__ ____ __ _ . __._.,_

--. ~---~. ------

.......... ;. ____ ·- ... .,·,.·-·-·---- '··- ....!0....•

1 '

'/OL 4:17 >Ac> 712

I STATE OF TI:XAS § §

COUNTY OF HARRIS §

B~FORE ME, the undersigned authority, on this day petsenally appeared Kent Beers, Attorney-tn-Fact for Southland Royalty Company, a Delaware Corporation, known to me to be the person whose name is subsa1bed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed and in the capacity therein stated. /li.J GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this L day of September, 1994.

CORPORATION ACKNOW\_EQGMENT

STATE OF TEXAS § §

COUNTY OF HARRIS § I BEFORE ME, the undersigned authority, on this day personally appeared of

known to me to be

the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the· same for the purposes and consideration therein expressed and in the capacity therein stated as the act and deed of said corporation.

GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this _ _ day of September, 1994.

MY COMMISSION EXPIRES:

Notary Public in and for the State of Texas

ATTORNEY4N-FACT

STATEOFTEXAS § §

COUNTY OF HARRIS §

~~ersonally~eared~M

BEfORE; ME, the undersigned authority, on this F)!( ll )"'f", , Allomey~n-Eact for · Ct3C£l;SOO known to me to be the person whose name is subscribed to the foregoing instrument.;!

~50'~ ":"TLJ acknowledged to me that she/he executed the same -for the purposes and consideration therein express~d and In the capacity therein stated.

I _i GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this 1.4_ day of September, 1994.

MY COMMISSION EXPIRES:

4 ATrue and Correct CollY of Original Rled in Madison CouniV Cle<l<l; Office

68

···· ·-~··- ·- ··------------~2L

EXHIBIT A

hoe 1 or Exh1b1t CO Fill NO ........ lYPE INSliWHENT... • INST DATE. GRANTOR. lESSOR ............................... GRAHl££ LESSEE .................. , ..... , ...... RECOUIII«l OATA. LEGAL J)ESCRIPTlON., ... , .......... , ..... , • , •• , 02118700 OJL 00 GAS LEASE 10/08/74 HENRY K. OOOM, ET UX CURIWI R. CAMPBELL, INC. 21/661 BRAZ.OS 943 ,t,CRES, l«lRE 00. LESS. DESCRIBED IN LEASE.

COUNlY

02116800 OIL AND GAS LEASE 08/14/74 GIBBS RROlllERS .AND COMPANY CURRAN R. CAMPBELL. IHC. 203/414 HADISOH 184.1 ACRES, HORE. OR LESS, DESCRIBED IN COIJHTY LEASE.

02l1B!IOO OIL AI() Gf\5 LEASE 08/29174 JAMES D. WILSON, IUD. & IND. EX. CURRAN R. CAMPBELL, INC. 203/464 HADISON 2072.33 ACRES. MORE OR lESS. DESCRIBED IN COIIHY, 21/667 LOOE. BRAZOS COUtm

02119500 OIL AND !lAS ·LEASE 10/ll/74 RAVHOND B. BUCHANAN, ET UX CURRAN R. CAMPBELL. IHC. 21/679 BMZOS 22Z.Il6 ACRES, MORE DR LESS, DESCRIBED IN coum LEASE.

LESS AND EXCEPTED FROM THE ABOVE ARE THE L.ANilS ATTRIBUTABLE 10 Tl\E H. K. OOOH·WE.LLS, J.AJlES D. WILSOll. f.4 WELL AliO ntE Bl.IOIAl:~ 12. I£Ll.

ASSOCIATED WELLS: PROPERTY HU!IRER ••• 01' WEll NI.IHBER !,Ell !OOIE... .. .. .. .. • .. • .. .. .. ............. . ... , LOCATION •.••.••••••••••• ,. 21198 24300 GIBBS BROS 1 A. NUNLEY SVY., A·176 21189 1409,81464 WILSON JAHES D *3 JESSE K. DAVIS SVV. A·l03 21189 8S9fl0 WILSON JAI£S 0 #Z JESSE K. DAVIS SVY., A·103 21195 6900 BUCHANAN 1 HARDIN NEVEUE SVV., ,.-185

R

,.._ ...... --J ~

i!ii nfa~ --J ~

his ~=>!!!~ '6 ~- \

~---~----

·-. ·.....-• .. --···

, .....~-- .:.. .:I:.

FILED

I{[ p.• QO D'Q.OCK._>:Ci/"---~

~~£P21W94

Il STATE OF TEXAS

COUNTY OF MADISON ~ 0"

*- ~.

~ -~--······.:';j':"- ••,-.

,:·•. ~· ..;,~~C"{:~"'COLEMAN, Clerk of the CountY Coon io and f:'·!:~;··_· . :____:;~-~~}?.

in;;*~;-~~\ti_;g~~d ~e ~- ,day of if.:. ,19?. Y., for said County do hereby certify that the above of':"~- _·. ... · ~· 19.tf.'f:... at .• //./!'.~-, ... o'ctock av

wasfiledforrecord in my office the .).(#..dav ...

(!_ .m. and re:;;~d~e; ;u;..._ ... - .. day of.

~ -~" · :' 9f. 'l' 6. . .... o.dock . ~:;~_ ... ;":'":•'19 ..••.. at ... ... I.

....

... t{ .m. in •. -#~:Co ~ecords of said CountY, in Vol.. '1117 ...... , of pages .7(1.9.,, ..... . WliNESSmv hand and seal of~id office, this-??~.~- ,day of -~~;t'ka 11 :&.t.,., .._..... , 19 .9¥. .. ,.

8!!=lrl-~ Countv Oerlt, Madison County, Texas

;,;,.·

I ~ L~----

STATE OF TE._,: ••::., COUNTY OF fAP.OISON • I. C~e Bamltl, County Clac'k ofUad!Uin County, Teal> .:Jo herebY certify that the toregOing • a true .00 Cl:lfl'«ll copy of the or!gw· record am .. aamo ~on \'eiCD'U In n Lillo! ,._. ""· -''i:!:!;:11!-,;;=-

Page<SJ:4·3"" . tn~nclitny. T_.. Given u~&r lfiV ':nd and •81 of - . . an 1hia d!IY til . B p±ll!l.•V IQ .. 20'"1k"'---

., Cbpl<il- mri!M!AnR

69 ~Iizabeth Mother!il

TAB B

Order Granting Defendants’ Motion for Summary Judgment on Title Issues (CR 1617)

No. 12-13130-012-10

BURLINGTON RESOURCES OIL & GAS § IN THE DISTRICT COURT OF COMPANYLP, § §

Plaintiff, § §

V. § §

PETROMAX OPERATING Co., INC., MD § MADISON COUNTY, TEXAS AMERICA ENERGY LLC § f/k/ a/WOODBINE ACQUISITION LLC, § PETRO TEXAS LLC, CH4 ENERGY II, § LLC, and TEXCAL ENERGY SOUTH § TEXAS, LP, § §

Defendants § 12TH JUDICIAL DISTRICT

ORDER GRANTING DEFENDANTS'

MOTION FOR SUMMARY JUDGMENT ON TITLE ISSUES

On this day came on for consideration Defendants Motion for Summary Judgment

on Title Issues (the "Motion"). This Court having considered the Motion, all responses

and replies, together with any exhibits, and the arguments of counsel, has determined

that the Motion should be, and hereby is, GRANTED.

It is therefore, ORDERED, ADJUDGED, and DECREED that:

1. Burlington does not own any interest in the AMI described in the 1975 Letter Agreement made the basis of this suit; and

2. The AMI provision in the 1975 Letter Agreement has terminated.

Signed this /0 day of--+'~""------'--'-'-'----'----~· 2014

~

...1

Filect~his ' "- Day of i ,r_-~•'iL • I

,20/C,·

, ' \e at~··'· ~ . · 1• 0<. ~O'clock Judge Presiding -l t{_. /.5 ,_ - . Cieri< L<_ c · -

t2fh 1278th Judicial District c 0 ,, .

MADISON COUNTY' r",: c C.\.. ..._.

- - - - - - D·s•·· · 1617

TAB C

Order Denying Burlington’s Motion for Partial Summary Judgment Seeking Various Declarations (CR 1618-19)

No.12-13130-012-10

BURLINGTON RESOURCES OIL & GAS § IN THE DISTRICT COURT OF COMPANYLP, § §

Plaintiff, § §

v. § §

PETROMAX OPERATING Co., INC., MD § MADISON COUNTY, TEXAS AMERICA ENERGY LLC § f/k/ a/WOODBINE ACQUISITION LLC, § PETRO TEXAS LLC, CH4 ENERGY II, § LLC, and TEXCAL ENERGY SOUTH § TEXAS, LP, § §

Defendants § 12TH JUDICIAL DISTRICT

ORDER DENYING BURLINGTON'S MOTION FOR PARTIAL SUMMARY JUDGMENT SEEKING VARIOUS DECLARATIONS

On this day came on for consideration Burlington Resources Oil & Gas Company

LP's ("Burlington") Motion for Partial Summary Judgment Directed to Defendants

Woodbine and PetroMax and Seeking Declarations that: 1) the Area of Mutual Interest

of the January 7, 1975, Letter Agreement Remains in Force and Effect, 2) Burlington

Jointly Owns a Leasehold Interest Within the Area of Mutual Interest and 3)

Burlington's Rights Under the 1975 Letter Agreement and AMI Are Not Subject to

Reduction or Limitation Based on the Amount of Burlington's Leasehold Ownership

(the "Motion"). This Court having considered the Motion, all responses and replies,

together with any exhibits, and the arguments of counsel, has determined that the

Motion should be, and hereby is, DENIED. ,_!._ ) i ',......_

Filed Tpis 1 Day -~ of (~ -e , 20 I~· ·.. \ at£. ~l~:L m O'clock '//..:1 oc.J · ~ · . Clerk 12th /278th Judicial District Court 1618 -1- MADISON COUNTY, TEXAS _ _ _ _ _ _ Deputy

Judge Presiding