May v. INEOS USA Oil & Gas

Opinion

FILED IN 2026 Tex. Bus. 20 BUSINESS COURT OF TEXAS BEVERLY CRUMLEY, CLERK ENTERED 5/1/2026

THE BUSINESS COURT OF TEXAS FOURTH DIVISION

ROBERTS. MAY, FOXBOROUGH ENERGY § COMPANY, LLC, WEST GEORGE § PROSPECT, LLC, STEVEN C. HOWARD, § METEOR ENERGY, LLC, ALAMO BEACH § LIMITED PARTNERSHIP, ALLEN 4A § PROPERTIES, LLC, BARRY SWITZER § Cause No. 25-BC04B-0007 FAMILY, L.L.C., PATRICIA A. BEAN, § INDIVIDUALLY AND AS INDEPENDENT § EXECUTRIX OF THE ESTATE OF JOE C. § BEAN, DECEASED, JOEL G. BEAN, § COMMONWEALTH INVESTMENT § CORPORATION, PATRICIA MARIE § FERMAN, FREDERICK E. GRABOYES, § HANNA JOYCE HODGE, ERIC T. § HOLMES, HUNTER MILLER FAMILY, § L.L.C., J & P FAMILY PROPERTIES, LTD, § GLENN C. JENKINS & VIVAN S. JENKINS, § JREY PROPERTIES, LLC, LARA ENERGY, § INC., NEUHAUS BROOKS INVESTMENTS, § LLC, OLD LIPAN LIMITED, OMAR E. § ORTEGA, OWLAW REAL ESTATE § HOLDINGS, LLC, RRJ ENERGY, LLC, § JERRY S. STOKES, WESTENERGY, LLC, § DALE M. WILCOX, TRUSTEE OF THE § WILCOX MARITAL BYPASS TRUST, JANE § A. WHITE, JAMES V. WILLIS & § CHARLENE M. WILLIS, and WORSHAM § ENERGY HOLDINGS, LLC, § Plaintiffs § v. § § INEOS USA OIL & GAS LLC, CHESAPEAKE § EXPLORATION, LLC, CHESAPEAKE § OPERATING, INC., CNOOC ENERGY USA § LLC, LARCHMONT RESOURCES, L.L.C., § and GREG WINKLER, INDEPENDENT EXECUTOR OF THE ESTATE OF MARK A. § DOPPS, DECEASED, § Defendants §

MEMORANDUM OPINION AND ORDER

Evidence and Plaintiffs' response. The parties presented their arguments at a

hearing on April 28, 2026.

912 In its Memorandum Opinion rendered March 27, 2026, this court partially

granted and partially denied Defendants' motion for partial summary judgment.

Mayv. INEOS USA Oil&GasLLC, 2026 Tex. Bus, 14, 2026 WL867698 (4th Div).

In doing so, the court construed the parties' oil and gas Farmout Agreement, which

lies at the heart of their dispute. The court rejected Plaintiffs' contention that their

reversionary back-in interest is triggered on a "well by well" basis. The court held

the contractually defined "Payout" is triggered only by an Earning Well, not by any

well, and is calculated based on aggregated cost recovery for the Earning Well

together with all wells on its corresponding acreage.

a matter of law in their favor that Payout is calculated on a well-by-well basis. To

convince the court of their interpretation, they attach evidence that is extrinsic to

the Agreement, comprising Defendants' reports, records, and emails that, according

to Plaintiffs, show "how [the Agreement]'s provisions were implemented in

2 practice." Plaintiffs' counsel concedes the challenged exhibits are "post-Farmout

Agreement records, communications, documents."

post-execution "course of performance" evidence. In Plaintiffs' response, the

entirety of their legal authority rests in a single footnote citing six cases. Despite

Plaintiffs' statement to the contrary, not one of those cases allowed course-of-

performance or other post-execution evidence to construe an unambiguous contract:

• In two of the cases, the Court considered only pre-execution evidence-

not evidence of contractual performance. Barrow-Shaver Res. Co. v.

Carrizo Oil & Gas) Inc., 590 S.W.3d 471, 483-84 (Tex. 2019)

(considering circumstances of contractual negotiations); Houston Expl.

Co. v. Wellington Underwriting Agencies) Ltd., 352 S.W.3d 462, 471-72

(Tex. 2011) (considering draft revisions during negotiations).

• In the remaining cases, the Court reversed a lower court's use of extrinsic

evidence to construe a contract. URI) Inc. v. Kleberg Cnty., 543 S.W.3d

755, 758, 782 (Tex. 2018); First Bank v. Bi·umitt, 519 S.W.3d 95, 110

(Tex. 2017); Sun Oil Co. v. Madeley, 626 S.W.2d 726, 732-33 (Tex.

1981); see Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 453 (Tex.

2015) (affirming reversal of trial court's ruling and rejecting use of

evidence regarding parties' post-execution acquiescence to disputed

fees).

3

unambiguous, but they now also urge that Defendants' construction "is not the only

reasonable construction" of the Agreement. For the reasons described in the court's

prior opinion, only "one reasonable meaning clearly emerges" after applying

established contract-construction rules to the Agreement. See Bd. ofRegents of Univ.

of Tex. Sys. v. IDEXX Labs., Inc., 691 S.W.3d 438, 444 (Tex. 2024). The court holds

the plain language concerning Plaintiffs' reversionary back-in interest is reasonably

susceptible to only one meaning, preventing consideration of their extrinsic

evidence. See Equinor Energy LP v. Lindale Pipeline, LLC, 69 Tex. Sup. Ct. J . 343

(Mar. 13, 2026) ("[C]ourts can't consider course-of-performance evidence to

interpret an unambiguous contract").

CONCLUSION AND ORDER

law, the court ORDERS that Defendants' objections to Exhibits D through N of

Plaintiffs' Motion are SUSTAINED. The court strikes these exhibits from the

summary-judgment record.

SO ORDERED.

Judge of tlie Texas Business Court, Fourth Division

SIGNED ON: May 1, 2026