Citation 2002 Investment LLC and Endeavor Energy Resources L.P. v. Occidental Permian, LTD., Occidental Petroleum Corporation, Oxy USA, Oxy USA WTP LP, and Rodeo Midland Basin, LLC

CourtCourt of Appeals of Texas
DecidedDecember 22, 2022
Docket08-21-00029-CV
StatusPublished

This text of Citation 2002 Investment LLC and Endeavor Energy Resources L.P. v. Occidental Permian, LTD., Occidental Petroleum Corporation, Oxy USA, Oxy USA WTP LP, and Rodeo Midland Basin, LLC (Citation 2002 Investment LLC and Endeavor Energy Resources L.P. v. Occidental Permian, LTD., Occidental Petroleum Corporation, Oxy USA, Oxy USA WTP LP, and Rodeo Midland Basin, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Citation 2002 Investment LLC and Endeavor Energy Resources L.P. v. Occidental Permian, LTD., Occidental Petroleum Corporation, Oxy USA, Oxy USA WTP LP, and Rodeo Midland Basin, LLC, (Tex. Ct. App. 2022).

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

CITATION 2002 INVESTMENT LLC, § and ENDEAVOR ENERGY No. 08-21-00029-CV RESOURCES, L.P., § Appeal from the Appellants, § 112th Judicial District Court v. § of Reagan County, Texas OCCIDENTAL PERMIAN, LTD., § OCCIDENTAL PETROLEUM (TC# CV02236 & CV02237) CORPORATION, OXY USA INC., OXY § USA WTP LP, and RODEO MIDLAND BASIN, LLC, §

Appellees. §

OPINION

This permissive appeal involves a dispute over ownership of certain oil-and-gas interests

in Reagan County, Texas. Appellants Citation 2002 Investment LLC (Citation), and Endeavor

Energy Resources, L.P. (Endeavor), appeal a partial summary judgment in favor of Appellees,

Occidental Permian, Ltd., Occidental Petroleum Corporation, Oxy USA Inc., Oxy USA WTP LP

(collectively referred to as the Oxy Parties) and Rodeo Midland Basin, LLC (Rodeo). Specifically,

Appellants appeal the trial court’s declaration that a 1987 assignment from Shell Western

E&P, Inc. (Shell Western) to Citation 1987 Investment Limited Partnership—Citation’s

predecessor-in-interest—only included interests in certain oil-and-gas leases down to specific depths. For brevity, we refer to the 1987 assignment as the “Shell-Citation Assignment.” We

reverse the trial court’s partial summary judgment and vacate its declaration regarding the disputed

interests, determining instead that Shell Western E&P conveyed all its interest in the properties at

issue without depth limitation of any kind; and we remand this case for further proceedings

consistent with this opinion.

I. BACKGROUND

A. Factual background

The facts of the case are undisputed; only the interpretation of the Shell-Citation

Assignment is at issue in this appeal. To start, we provide a bit of background about the parties

and other information relevant to the underlying litigation. Necessarily, this factual background

includes information about two chains of conveyances involving the parties and properties at issue.

The Shell Western to Citation Chain of Conveyances

In 1987, Shell Western E&P, Inc. sold a large acreage position of oil and gas properties to

Citation 1987 Investment Limited Partnership, a predecessor-in-interest of Citation, in exchange

for just over $75 million. This transaction included properties in West Texas and New Mexico. To

effectuate this transaction, the parties executed a document titled “Shell Western/Citation

(N.M./TX.) Purchase and Sale or Exchange Agreement” (PSA). Subject to the terms of the PSA,

the conveyance of properties occurred according to the terms of a separate document, the Shell-

Citation Assignment. The Shell-Citation Assignment incorporated and attached an Exhibit A

purportedly describing the “oil and gas fee, mineral and leasehold estates” included in the subject

conveyance. Exhibit A consists of over 50 pages of spreadsheet entries describing properties to be

conveyed. Some of Exhibit A’s descriptions include references to property depth; for example,

some entries describe a tract of land “down to 8,393 feet.”

2 The Shell Western to Altura Chain of Conveyances

Ten years later, in 1997, Shell Western purported to transfer by assignment certain oil-and-

gas interests to Altura Energy, Ltd. (Altura) (the Shell-Altura Assignment). Some of the interests

assigned purportedly involved the properties previously conveyed to Citation, but for deeper

interests than those referenced in Exhibit A of the Shell-Citation Assignment. For ease of

discussion, we refer to these rights as “deep rights,” although no such designation was used in the

assignments themselves. In 2000, Altura changed its name to Occidental Permian, Ltd. (Occidental

Permian).

Subsequent Conveyances by Citation and Occidental Permian

In 2006, Citation assigned to Endeavor some of the interests it had obtained under the

Shell-Citation Assignment. In 2019, Occidental Permian, assigned some of the interests from the

Shell-Altura Assignment to Rodeo. The deep rights purportedly conveyed in the Shell-Altura

Assignment are the subject of this dispute. The Oxy Parties contend—and the trial court agreed—

that certain interests conveyed in the Shell-Citation assignment were depth limited, and as a result,

Shell remained free to assign its deep rights to Altura. In opposition, Citation and Endeavor argue

the Shell-Citation Assignment was not depth limited regarding any of the leases, and that, between

them, they own all rights to the leases and other interests described in Exhibit A.

B. Procedural background

In April of 2019, Occidental Permian sued Endeavor for trespass to try title and other

claims, asserting superior title to the deep rights in certain disputed properties (the Endeavor Suit).

The Endeavor Suit was docketed by the 112th Judicial District Court under case number CV02236.

Days after the Endeavor Suit was filed, Citation sued Occidental Permian and two of its affiliates

for trespass to try title and other claims, regarding a different set of disputed properties (the Citation

Suit). The Citation Suit was filed in the same district court and docketed under case number

3 CV02237. Soon, Endeavor counterclaimed for trespass to try title against Occidental Permian in

the Endeavor Suit, and the Oxy Parties intervened in the Citation Suit. In total, eight properties

were in dispute in the Endeavor Suit and twenty-two properties were in dispute in the Citation

Suit. The trial court then granted an agreed motion to consolidate the two cases, ruling that the

“issues and claims asserted by the Parties [] relating to the construction or interpretation of the

[Shell Western-Citation Assignment] will be tried together[.]”

Following the consolidation, the parties filed a Rule 11 agreement, agreeing that the Shell-

Citation Assignment is unambiguous and further agreeing “to a phased-in approach to the litigation

by first seeking a ruling from the Court on cross motions for partial summary judgment regarding

the interpretation of the [Shell-Citation Assignment] as a matter of law.” Pursuant to that

agreement, the parties filed cross-motions for partial summary judgment on the issue of whether

the Shell-Citation Assignment was a depth-limited grant. After briefing and a hearing, the trial

court ultimately granted the Oxy Parties’ motion and denied Citation and Endeavor’s motions. The

trial court held that the Shell-Citation Assignment “is a limited grant that conveyed certain shallow

rights to Citation” and “did not convey Shell’s deep rights to Citation.”

The trial court then granted Citation and Endeavor’s unopposed motion to appeal the

interlocutory summary judgment order. See TEX. R. CIV. P. 168; TEX. CIV. PRAC. & REM. CODE

ANN. § 51.014(d). In granting permission for appeal of this issue, the trial court identified the

following controlling question of law:

Is the Shell-Citation Assignment[:]

(1) a depth-limited grant that conveyed only certain shallow rights to Citation and did not convey deep rights to Citation (as Oxy contends)? or (2) an unlimited grant that conveyed to Citation all right, title and interest owned by [Shell Western] in the oil and gas fee, mineral, and leasehold estates, and contracts or instruments affecting such property, described anywhere in

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Bluebook (online)
Citation 2002 Investment LLC and Endeavor Energy Resources L.P. v. Occidental Permian, LTD., Occidental Petroleum Corporation, Oxy USA, Oxy USA WTP LP, and Rodeo Midland Basin, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citation-2002-investment-llc-and-endeavor-energy-resources-lp-v-texapp-2022.