Lightning Oil Company v. Anadarko E&P Onshore LLC Fka Anadarko E&P Company, LP

480 S.W.3d 628, 2015 Tex. App. LEXIS 10542, 2015 WL 5964939
Court of Appeals of Texas·Decided October 14, 2015·No. 04-14-00903-CV·Published·Cited by 2 cases

Opinion

OPINION

Opinion by:

Patricia O. Alvarez, Justice

On August 19, 2015, this court issued an opinion and judgment in this appeal. Acting sua sponte, we withdraw our opinion and judgment of August 19, 2015, and substitute this opinion and judgment to clarify portions of the opinion. See Tex. R. App. P. 19.1.

This is a subsurface trespass case between lessees of two adjacent mineral estates. Lightning Oil Company sued Ana-darko E & P Onshore LLC to prevent Anadarko from siting a well on the land overlying Lightning’s mineral estate and from drilling through Lightning’s mineral estate to reach Anadarko’s adjacent mineral estate. Because the surface estate owner controls “the matrix of the underlying earth,” and the summary judgment evidence conclusively proves the surface estate owner gave Anadarko permission to site and drill, we affirm the trial court’s order.

BACKGROUND

This appeal involves adjacent surface estates in Dimmit County and the severed mineral estates beneath them,

A. Cutlass Lease

The Cutlass Lease is a severed mineral estate under a portion of the Briscoe Ranch. When a previous owner of the fee simple to what is now the Briscoe Ranch conveyed the fee by warranty deed, the grantor severed the mineral estate by reserving “all mines of, and all oil, gas and all minerals, on and under the said land.” The reservation did not expressly include any right to, or control of, any subterranean structures — the earth — underlying the surface estate.

B. Lightning’s Lease

In 2009, the Cutlass Lease owners executed a lease with Lightning. In 2013, the parties executed an amended lease that includes the following provisions:

[T]he right of exploring for, developing, operating, producing, owning, marketing, treating and transporting oil and gas from the Leased Premises, subject to the limitations contained in this Lease. The term “gas” shall mean hy *631 drocarbon -gases only and shall not include helium, carbon dioxide or other commercial gases. "
Lessor expressly excepts from this Lease and reserves to Lessor, all minerals of every kind and character, except those herein defined. Lessor further reserves all rights to geothermal water resources, including the rights to methane and other hydrocarbons from such water..

C. Anadarko’s Lease; Surface, Subsurface Agreement

Anadarko leased a mineral estate under the Chaparral Wildlife Management Area (CWMA), which is adjacent to the surface estate overlying the Cutlass Lease. Ana-darko’s lease allows it to explore, and produce oil and gas from, the CWMA. In a separate Surface Use and Subsurface Easement Agreement, Anadarko got permission from Briscoe Ranch to place drilling rigs on the surface estate overlying the Cutlass Lease and to drill through the earth under the Briscoe Ranch to form wells that open and bottom in the CWMA.

D. Lightning’s Suit, Arguments

Lightning sued Anadarko to prevent Anadarko from siting wells on the Briscoe Ranch and from drilling through the earth within the boundaries of the Cutlass Lease. As the leaseholder of the mineral estate, Lightning asserts it has. the right to exclude others from drilling. It contends it has the exclusive right to determine who can drill through the earth and the oil and gas within the boundaries' circumscribing the Cutlass Lease. Lightning insists that Briscoe Ranch’s permission is not enough, and Lightning should not have to trust Anadarko to not take any seismic surveys as Anadarko drills through subterranean structures that harbor Lightning’s oil and gas.

E. Anadarko’s Arguments

Anadarko acknowledges it has begun siting wells on the Briscoe Ranch overlying the Cutlass Lease. Anadarko also acknowledges it plans to drill wells 8,000 feet vertically before deviating the wellbores to reach its leasehold under the CWMA. Anadarko argues that Briscoe Ranch, as the surface estate owner, controls the subterranean structures, and Anadarko needs only Briscoe Ranch’s permission. Anadar-ko argues that, as a matter of law, it cannot commit a trespass by drilling through the subterranean structures in which Lightning’s oil and gas hydrocarbon molecules may lie. According to Anadar-ko, because it has the surface estate owner’s permission to site and drill, Lightning’s claim for tortious interference must fail as a matter of law.

F. Procedural Posture

When Lightning learned Anadarko was preparing to drill on land above the Cutlass Lease, Lightning sought an injunction to prevent Anadarko from drilling through the Cutlass Lease area to reach Anadar-ko’s adjacent mineral estate.

1. Anadarko’s Motions for Summary Judgment

After some discovery, Anadarko moved for summary judgment on traditional and no evidence grounds. In its traditional motion against Lightning’s claims of trespass and tortious interference with contract, Anadarko asserted it established its defense of justification as a matter of law. In its no evidence motion, Anadarko asserted there was no evidence of at least one essential element of each of Lightning’s claims.

2. Lightning’s Motions for Summary Judgment

*632 Lightning moved' for traditional summary judgment on (1) its request for a permanent injunction against Anadarko drilling through the Cutlass Lease and (2) its request for the court to declare that Briscoe Ranch' could not “grant Anadarko a right to trespass through Lightning’s property.” ' Lightning did not expressly move for traditional summary judgment on its: tortious interference with contract claim. In its no evidence motion, Lightning moved for summary judgment on Anadarko’s affirmative defense of justification. ;

3. Trial Court’s Actions

In its November 24,2014 order, the trial court denied Lightning’s motion, and. without stating the grounds for its decision, it granted Anadarko’s motion. It then severed the remaining issues to make its order final and appealable. Lightning appeals the trial court’s order.

STANDARDS OF REVIEW

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Lightning Oil Company v. Anadarko E&P Onshore LLC Fka Anadarko E&P Company, LP, 480 S.W.3d 628, 2015 Tex. App. LEXIS 10542, 2015 WL 5964939 (Tex. Ct. App. 2015).

480 S.W.3d 628 (Lightning Oil Company v. Anadarko E&P Onshore LLC Fka Anadarko E&P Company, LP) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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