Slant Operating v. Octane Energy Operating

2025 Tex. Bus. 53

Opinion

FILED IN BUSINESS COURT OF TEXAS BEVERLY CRUMLEY, CLERK ENTERED 12/22/2025 2025 Tex. Bus. 53

THE BUSINESS COURT OF TEXAS EIGHTH DIVISION

SLANT OPERATING, LLC, and SLANT § WTX HOLDINGS II, LLC, § § Plaintiffs, § § v. § Cause No. 24-BC08A-0002 § OCTANE ENERGY OPERATING, LLC, § § Defendant. §

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Syllabus *

This opinion addresses competing motions for summary judgment regarding liability for Defendant’s alleged breach of a reciprocal waiver agreement. More specifically, the Court considers whether there are genuine issues of material fact concerning the definiteness of the agreement’s essential terms and the parties’ mutual assent to those terms. The Court concludes no such fact issues exist to preclude summary judgment for Plaintiff. Accordingly, the Court grants Plaintiff’s motion and denies Defendant’s motion.

* The syllabus was created by court staff and is provided for the convenience of the reader. It is not part of the Court’s opinion, does not constitute the Court’s official description or statement, and should not be relied upon as legal authority. OPINION

Before the Court are two competing motions for summary judgment:

(1) Plaintiff Slant Operating, LLC (“Slant Operating”)’s Motion for Partial Summary Judgment, filed March 19, 2025 (“Slant Operating’s Motion”);1 and

(2) Octane Energy Operating, LLC (“Octane”)’s Motion for Summary Judgment filed June 17, 2025 (“Octane’s Motion”).

¶1 The parties each filed responsive briefing. After considering the pleadings,

the briefings, evidence, and the oral arguments presented by counsel, the Court concludes

Slant Operating is entitled to partial summary judgment on liability. Accordingly, Slant

Operating’s Motion is GRANTED and Octane’s Motion is DENIED.

I. BACKGROUND

A. Slant Operating and Octane enter into a reciprocal waiver agreement.

¶2 Slant Operating and Octane are entities involved in oil-and-gas exploration

and production in several regions of the state. Plaintiffs’ Second Amended Petition (“2d

Am. Pet.”) ¶¶ 20, 24. As part of their business operations, both entities operate oil and gas

wells. Id. ¶ 24. On February 22, 2023, Slant Operating and Octane entered into a letter

agreement whereby each entity agreed to a reciprocal waiver of any objections they had to

the other’s “off-lease penetration point” permit applications (“Letter Agreement”). Id. ¶¶

31-33; Ex. 1. Specifically, Slant Operating agreed to waive its right to protest Octane’s

1 Plaintiffs’ Second Amended Petition is the live pleading before the Court. Slant Holdings WTX II, LLC (“Slant Holdings”) appeared as a plaintiff after Slant Operating filed its summary judgment motion. Slant Holdings did not file its own summary judgment on the same ground. The Court will therefore analyze Slant Operating’s Motion only as to Slant Operating.

OPINION AND ORDER, PAGE 1 permit application to drill Octane’s Green Gables Wells from a penetration point on Slant

Operating’s adjacent leasehold. Id. ¶ 33. Octane agreed to “waive its right to protest future

Slant drilling permit applications insofar . . . as they concern Off Lease Penetration Points

where Octane is the offset operator of record.” Id. In addition to exchanging waivers, the

parties also agreed to provide each other with “daily drilling, completion, and flowback

reports for each of the [w]ells” and “[d]aily production data for each of the [w]ells.” Id.,

Ex. 1.

¶3 Following the execution of the Letter Agreement, Slant Operating fully

performed its contractual obligation by waiving objections to Octane’s plan to drill its five

Green Gables Wells from a penetration point on Slant Operating’s adjacent leasehold. Id.

¶ 36. Less than 18 months after the Letter Agreement was signed, Slant Operating sought

to drill its Gardendale Wells from an off-lease penetration point on Octane’s adjacent

leasehold. Id. From June to August 2024, Slant Operating and Octane discussed a possible

waiver of Octane’s right to object to Slant Operating’s application to drill the Gardendale

Wells. Id. ¶¶ 38-40; Exs. 2-3. After Slant Operating formally requested the waiver, Octane

informed Slant Operating it would not provide the waiver. Id. ¶ 41; Exs. 4-5. On September

16, 2024, after Slant Operating submitted its permit application to the Texas Railroad

Commission (“RRC”) without the waiver, Octane sent its official application objection to

Slant Operating and the RRC. Id. ¶ 43.

OPINION AND ORDER, PAGE 2 B. Slant Operating commences suit in the Business Court, the parties move for summary judgment.

¶4 On October 1, 2024, Slant Operating filed its Original Petition in the

Business Court of Texas, bringing a single breach-of-contract claim. Plaintiffs filed first and

second amended petitions. 2 Slant Operating brings several arguments in its pending

summary-judgment motion:

(1) The Letter Agreement is a valid contract that obligated Slant Operating to provide the Green Gables Wells waiver to Octane and Octane to provide the Gardendale Wells waiver to Slant Operating;

(2) Slant fully performed its obligation under the contract by providing the Green Gables waiver upon request;

(3) Octane breached the contract by not providing the Gardendale waiver upon request; and

(4) Slant Operating incurred damages because of this breach.

See Slant Operating’s Motion for Partial Summary Judgment (“Plaintiff’s Mot.”) at 5-8.

Slant Operating also requests summary judgment on liability, leaving damages to be

determined later. See generally, id.

¶5 Octane filed its competing motion for summary judgment, requesting the

Court grant summary judgment in its favor because (1) certain parts of the Letter

Agreement are too indefinite to enforce and (2) Slant Operating failed to exhaust

administrative remedies before initiating suit. See Octane’s Motion for Summary Judgment

(“Def.’s Mot.”) at 13, 22.

2 Slant Operating subsequently filed the Second Amended Petition and added Slant Holdings and Slant Energy II, LLC as plaintiffs.

OPINION AND ORDER, PAGE 3 II. LEGAL STANDARD

¶6 Summary judgment is governed by Texas Rule of Civil Procedure 166a. For

a traditional motion for summary judgment, the movant “bears the burden to show that no

genuine issue of material fact exists and that it is entitled to judgment as a matter of law.”

ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865 (Tex. 2018) (citing TEX. R. CIV. P.

166a(c)). To satisfy this burden, the movant must conclusively establish all essential

elements of its claim by presenting evidence. See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60

(Tex. 1986) (per curiam). The court must take all evidence favorable to the nonmovant as

true and “indulge every reasonable inference and resolve any doubts in the nonmovant’s

favor.” ConocoPhillips, 547 S.W.3d at 865.

¶7 Once the movant satisfies its burden for summary judgment, the burden

shifts to the nonmovant to provide evidence that raises a genuine issue of material fact. See

Wal-Mart Stores, Inc. v. Xerox State & Loc. Sols., Inc., 663 S.W.3d 569, 583 (Tex. 2023). If

a fact issue is raised, the court cannot grant summary judgment. Mahoney v. Webber, LLC,

608 S.W.3d 444, 447 (Tex. App.—Houston [1st Dist.] 2020, no pet.). For a defendant’s

traditional motion for summary judgment, the defendant satisfies its burden by

conclusively negating at least one element of the plaintiff’s cause of action or proving all

elements of an affirmative defense. Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016).

The burden then shifts to the plaintiff to raise a fact issue to defeat summary judgment. Id.

at 97.

OPINION AND ORDER, PAGE 4 III. OBJECTIONS TO SUMMARY-JUDGMENT EVIDENCE

¶8 Octane objects to three of Slant Operating’s summary-judgment exhibits and

one of Slant Operating’s response exhibits. As discussed below, Octane’s objections are

sustained in part and overruled in part.

A. Exhibit B

¶9 Octane objects to Exhibit B within Slant Operating’s Motion. Exhibit B is a

partial transcript of Octane attorney Joe Greenhill (“Greenhill”)’s statements at the

Court’s January 7, 2025, hearing on jurisdiction. The transcript statements attributable to

Greenhill are as follows:

• The “most economically fiscal way” for Slant Operating to drill the Gardendale Wells was to drill off-lease on Octane’s leasehold;

• “Octane agreed in a Letter Agreement to provide a waiver for future wells”;

• Slant Operating provided the Green Gables Wells waiver to Octane;

• Octane declined to provide the Gardendale Wells waiver to Slant Operating; and

• The parties agree that the Letter Agreement is clear and controlling.

See Plaintiff’s Mot. at 2–4, 6–7 (citing Ex. B at 35:7-8, 36:9, 36:24-37:2, 37:3-4, 47:11).

¶ 10 Octane asks the Court to strike Exhibit B because “[a]ttorney argument is not

evidence” and the rules of evidence require admission of Greenhill’s entire statements for

context. Octane’s Response to Plaintiffs’ Motion for Partial Summary Judgment (“De f.’s

Resp.”) at 11. Attorney argument is generally not evidence, although unsworn attorney

statements at a hearing may be deemed evidence “when the circumstances clearly indicate

OPINION AND ORDER, PAGE 5 that the attorney is tendering evidence on the record based on personal knowledge and the

opposing party fails to object.” Vaccaro v. Raymond James & Assocs., Inc., 655 S.W.3d 485,

49192 (Tex. App.—Fort Worth 2022, no pet.). Greenhill’s unsworn statements were not

based on personal knowledge of the underlying case facts. Further, it appears that some of

Slant Operating’s representations of his oral argument were misinterpreted. 3 Therefore,

Octane’s objection is sustained and Exhibit B is stricken. 4

B. Exhibit C

¶ 11 Octane objects to Exhibit C, Slant Operating’s July 12, 2024, request for the

Gardendale Wells waiver as hearsay and incomplete evidence. Def.’s Resp. at 11. Exhibit C

is not hearsay, as Slant Operating offered the exhibit to show that the waiver request was

made, not to show the truth of any matter asserted within the request. See Plaintiff’s Mot.

at 3 (“[I]n reliance on the [Letter] Agreement, Slant sought reciprocal waivers from Octane

for six wells.”); TEX. R. EVID. 801(d); Ash v. Hack Branch Distrib. Co., 54 S.W.3d 401, 411

(Tex. App.—Waco 2001, pet. denied). Regarding completeness, the evidentiary rule of

optional completeness states that “[i]f a party introduces all or part of a writing or recorded

statement an adverse party may introduce, at that time, any other part—or any other

3 For example, Slant Operating claims that Greenhill stated the “most economically fiscal way” for Slant Operating to drill the Gardendale Wells was to drill off-lease on Octane’s leasehold, but Greenhill actually stated “Slant decided it made plans to develop its Gardendale wells, and that the most economically fiscal way of doing that was to drill penetration points on leases for which Octane was the offsite operator.” Plaintiff’s Mot., Ex. B at 36:25-37:2. The Court interprets Greenhill to mean that Slant Operating made the determination that this was the most economical way to drill the wells, not that it was objectively the case (or that Octane agreed with that determination).

4 As the exhibit has been stricken on independent grounds, the Court will not address Octane’s remaining objection concerning Greenhill’s deposition transcript.

OPINION AND ORDER, PAGE 6 writing or recorded statement—that in fairness ought to be considered at the same time.”

TEX. R. EVID. 106. Put differently, and echoing Slant Operating’s argument, the remedy for

an incomplete exhibit is not to strike it. Jones v. Colley, 820 S.W.2d 863, 866 (Tex. App.—

Texarkana 1991, writ denied) (“Rule 106, however, is not enforced by excluding the partial

statement, but by allowing the opposing party to contemporaneously introduce any other

part of the statement that should be considered with the portion introduced by the

proponent.”); see Plaintiffs’ Reply to Octane’s Response to Plaintiffs’ Motion for Partial

Summary Judgment (“Plaintiffs’ Reply”) at 20. Therefore, Octane’s objections to Exhibit

C are overruled.

C. Exhibit D

¶ 12 Octane objects to Exhibit D, a September 16, 2024, email from Octane

representative Jared Blong (“Blong”) to the RRC objecting to Slant Operating’s

Gardendale Wells drilling application. Octane argues incompleteness and claims the

exhibit is missing a necessary attachment. Def.’s Resp. at 11. For the same reasons set

forth above, Octane’s objection is overruled.

D. Exhibit A

¶ 13 Octane objects to Slant Operating’s Response Exhibit A, the Declaration of

Slant Operating’s counsel, Kenneth A. Young (“Young”), which lodges objections to

Young’s statements:

• On February 22, 2023, Slant Operating, LLC and Octane Energy Operating, LLC entered into an agreement whereby each party mutually agreed to waive objections to certain of the opposing party’s drilling permits.

OPINION AND ORDER, PAGE 7 • In the summer of 2024, in reliance on the [Letter Agreement], Slant sought reciprocal waivers from Octane for six wells: Gardendale 12-01 02WB, Gardendale 12-01 03MS, Gardendale 12-01 04MS, Gardendale 12-01 01WB, Gardendale 12-01 01MS, and Gardendale 12-01 02MS.

Plaintiff’s Resp., Ex. A, ¶¶ 3, 5. Octane argues “[a]ffidavits submitted to a trial court in

opposition to a motion for summary judgment must be made on personal knowledge.”

Octane’s Reply in Support of Its Motion for Summary Judgment (“De f.’s Re ply”) at 2-3

(citing TEX. R. CIV. P. 166a(f); Woods Expl. & Producing Co. v. Arkla Equip. Co., 528 S.W.2d

568 (Tex. 1975)). Young’s statements, like Greenhill’s, are not based on personal

knowledge. Accordingly, Octane’s objection to the above statements is sustained and the

statements are stricken.

IV. SLANT OPERATING’S PARTIAL MOTION FOR SUMMARY JUDGMENT

A. Slant Operating has established liability.

¶ 14 Slant Operating has conclusively established that the parties entered into a

valid, enforceable contract. To prevail on a breach-of-contract claim, the plaintiff must

prove:

(1) There is a valid contract;

(2) the plaintiff performed its obligations under the contract;

(3) the defendant breached the contract; and

(4) the plaintiff sustained damages as a result of the breach.

Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 890 (Tex. 2019). A

valid, enforceable contract requires an offer, acceptance, consideration, a meeting of the

minds (i.e., mutual assent) on the contract’s essential terms, consent to those essential

OPINION AND ORDER, PAGE 8 terms, and execution and delivery of the contract with the intent it be mutual and binding.

USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018); see Tex. Gas

Utils. Co. v. Barrett, 460 S.W.2d 409, 412-13 (Tex. 1970) (discussing consideration as

mutuality of obligation).

¶ 15 To obtain partial summary judgment on liability for breach of contract, Slant

Operating must conclusively establish (1) the Letter Agreement was a valid, enforceable

contract; (2) Slant Operating performed its obligations under the Letter Agreement; and

(3) Octane breached the Letter Agreement. See Pathfinder Oil & Gas, 574 S.W.3d at 890.

The Court considers each element in turn.

1. Valid, Enforceable Contract

¶ 16 The Letter Agreement is a valid contract. First, there was an offer in the form

of the Letter Agreement. Octane indicated that it agreed to the Letter Agreement’s terms

by executing it and the Letter Agreement was supported by consideration. Slant Operating

agreed to provide a waiver for Octane’s Green Gables wells in exchange for various forms

of production data. Octane agreed to provide waivers for all future Slant Operating Wells,

including Slant Operating’s Gardendale wells, in exchange for the same kinds of data.

There also appeared to be a meeting of the minds on the contract’s essential terms and the

parties’ consent to those terms, as both parties executed the Letter Agreement. Lastly, the

partiers executed and delivered the Letter Agreement by signing and emailing copies to

each other. See Plaintiff’s Mot., Ex. A.

OPINION AND ORDER, PAGE 9 2. Performance

¶ 17 Slant Operating has conclusively established that it performed its contractual

obligations as set forth in the Letter Agreement. It is uncontroverted that Slant Operating

provided Octane a waiver for the Green Gables Wells. Def.’s Resp. at 7 (“Slant and Octane

revised the proposed [Green Gables Wells] waiver, which Slant signed.”); Def.’s Resp., Ex.

A-14.

3. Breach

¶ 18 Slant Operating has conclusively established Octane breached the Letter

Agreement by refusing to provide a waiver and objecting to the off-lease drilling of the

Gardendale Wells. Plaintiff’s Mot., Ex. D. Octane admitted it did not provide the requested

waiver. See Def.’s Resp. at 10, 17-18, 21.

B. Octane fails to raise a genuine issue of material fact.

1. Slant Operating’s claim is not based on a “nonexistent” agreement.

¶ 19 Octane cannot prevail on its argument that an agreement does not exist.

Consideration of Octane’s argument requires the Court to use tools of contractual

construction. When construing contracts, courts are required to ascertain and effectuate

the parties’ intent as expressed in the contract. Frost Nat. Bank v. L & F Distribs., Ltd., 165

S.W.3d 310, 311-12 (Tex. 2005). The court focuses on “objective manifestations of intent,

not what one side or the other alleges they intended to say but did not.” URI, Inc. v. Kleberg

Cnty., 543 S.W.3d 755, 763-64 (Tex. 2018) (internal quotation marks omitted). Courts

consider the entire contract and “attempt to harmonize and give effect to all” provisions.

OPINION AND ORDER, PAGE 10 Frost Nat. Bank, 165 S.W.3d at 312. “If, after the pertinent rules of construction are

applied, the contract can be given a definite or certain legal meaning, it is unambiguous”

and can be construed as a matter of law. Id. However, if the contract is susceptible to more

than one reasonable interpretation, it is ambiguous. Id. Contract interpretation and the

determination of ambiguity are questions of law. URI, 543 S.W.3d at 763.

¶ 20 Octane argues it never promised to provide Slant Operating with—and Slant

Operating never asked for—future waivers in exchange for the Green Gables waiver. De f.’s

Resp. at 13. Instead, Octane asserts the plain language of the Letter Agreement indicates

Slant Operating only requested production data in exchange for the Green Gables waiver,

and Octane argues this is consistent with the parties’ negotiations. Id. at 12. The Court

disagrees.

¶ 21 Octane’s interpretation of the parties’ promises ignores the plain language of

the Letter Agreement. See Plaintiff’s Mot., Ex. A. The plain language reveals Octane

promised to provide future waivers to Slant Operating, and Slant Operating promised to

provide production data to Octane for those wells. The drafts and delivery were part of the

negotiation process. See Def.’s Resp., Ex. A-3. Additionally, Blong’s signature on the

agreement indicates Octane agreed to the terms that were proposed by Slant Operating. See

Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) (“Evidence of mutual assent

in written contracts generally consists of signatures of the parties and delivery with the

intent to bind.”). Accordingly, the Court is not persuaded by Octane’s argument to deny

Slant Operating’s Motion on this ground.

OPINION AND ORDER, PAGE 11 2. The Letter Agreement is enforceable.

¶ 22 Octane’s argument that the Letter Agreement’s Future Waiver Provision is

an unenforceable “agreement to agree” fails. An enforceable contract requires a meeting

of the minds on essential terms. USAA, 545 S.W.3d at 501 n.21. Contractual terms are

essential if the parties would reasonably regard them as “vitally important ingredients of

their bargain.” Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 237 (Tex. 2016) (internal

quotation marks omitted). An enforceable contract must address these essential terms with

“a reasonable degree of certainty and definiteness” and “be sufficiently definite to confirm

that both parties actually intended to be contractually bound.” Id. (citing Fort Worth Indep.

Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000)). Furthermore, “even when

that intent is clear, the agreement’s terms must also be sufficiently definite to enable a court

to understand the parties’ obligations and to give an appropriate remedy if they are

breached.” Id. (internal citations and quotation marks omitted). A contract’s essential

terms are determined on a case-by-case basis, and each contract should be considered

separately to determine those terms. Id.

¶ 23 Whether an “agreement fails for lack of an essential term is a question of law

to be determined by the court, unless there is ambiguity or unless surrounding facts and

circumstances demonstrate a factual issue as to an agreement.” Power Reps, Inc. v. Cates,

No. 01-13-00856-CV, 2015 WL 4747215, at *7 (Tex. App.—Houston [1st Dist.] Aug. 11,

2015, no pet.) (mem. op.) (internal quotation marks omitted). Whether essential terms are

too indefinite to enforce a contract is also a question of law. Knowles v. Wright, 288 S.W.3d

OPINION AND ORDER, PAGE 12 136, 142 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (citing T.O. Stanley Boot Co.

v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992)).

¶ 24 The issue of indefiniteness can arise with agreements to enter contracts in the

future. Parties can agree to enter into future contracts. See Fischer, 479 S.W.3d at 238.

However, when the essential terms are left open for future adjustment and agreement, there

is no enforceable agreement—just an “agreement to agree.” Id. at 237. To be enforceable,

agreements to enter into future contracts must contain all of the future contract’s essential

terms. Id. at 238 (citing McCalla v. Baker’s Campground, Inc., 416 S.W.3d 416, 418 (Tex.

2013) (per curiam)).

¶ 25 The Future Waiver Provision states:

Furthermore, Octane agrees to waive its right to protest future Slant drilling permit applications insofar and only insofar as they concern Off Lease Penetration Points where Octane is the offset operator of record. In exchange for any such waiver, Slant [Operating] would agree to provide to Octane the same data requested in Paragraphs 1 and 2 above.

Plaintiff’s Mot., Ex. A. Octane argues the Future Waiver Provision’s language was merely

a prospective “acknowledgment that the parties would be open to a future exchange of

waivers for data on wells Slant [Operating] might decide to drill, if any.” Def.’s Resp. at 7-

8. Slant Operating argues it is enforceable because there were no terms left open for future

negotiation. Plaintiffs’ Reply at 2. Further, even if it was an agreement to agree, Slant

Operating asserts it is enforceable because the parties agreed to all material terms.

Plaintiffs’ Reply at 7-8. The Court agrees with Slant Operating.

OPINION AND ORDER, PAGE 13 ¶ 26 The Future Waiver Provision is undoubtedly sparse. Octane argues it is

missing “nearly every material term” and does not contain any of the same material terms

as the Green Gables provision, including the identity of the future wells (names, permit

numbers, and locations), well path plats, and when the future wells would be drilled or

permitted. Def.’s Resp. at 14-15. But, considering the circumstances in which the Letter

Agreement was drafted, the Court does not view specific identifying information or drilling

and permitting plans necessary.

¶ 27 The terms of the Future Waiver Provision appear sufficiently definite to

enable the Court to determine each party’s obligations and offer an appropriate remedy for

breach. Upon Slant Operating’s request, Octane must provide Slant Operating a waiver to

drill its future wells at off-lease penetration points on the adjacent Octane leasehold. This

extends to any property where Slant Operating and Octane operate neighboring wells. In

exchange for the waivers, Slant Operating provides production data to Octane. There is no

language in the Future Waiver Provision indicting a plan to further negotiate the agreement

or its essential terms in the future. While Octane argues that the use of “future” and

“would agree” indicates the Future Waiver Provision is an unenforceable “agreement to

agree,” agreements using similar language have been deemed enforceable for containing all

essential terms. See Def.’s Resp. at 13–14; McCalla, 416 S.W.3d at 417-18; Plaintiffs’ Reply

at 8.

¶ 28 To the extent Octane harps on a missing duration term, its absence does not

automatically render an agreement unenforceable. If a duration term is missing from a

OPINION AND ORDER, PAGE 14 contract, courts can infer a reasonable duration. 5 See 1320/1390 Don Haskins, Ltd. v. Xerox

Com. Sols., LLC, 584 S.W.3d 53, 70-71 (Tex. App.—El Paso 2018, pet. denied);

WesternGeco, L.L.C. v. Input/Output, Inc., 246 S.W.3d 776, 783 (Tex. App.—Houston [14th

Dist.] 2008, no pet.). Additionally, contracts contemplating continuous or successive

performances that are indefinite in duration can be terminated at any party’s will. Fort

Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 841 (Tex. 2000); Clear Lake

City Water Auth. v. Clear Lake Utils. Co., 549 S.W.2d 385, 390 (Tex. 1977). 6

¶ 29 Lastly, assuming arguendo that the essential terms in the Future Waiver

Provision are too uncertain or indefinite, principles related to part performance still render

it enforceable. “Part performance under an agreement may remove uncertainty and

establish that a contract enforceable as a bargain has been formed.” Fischer, 479 S.W.3d at

239 (quoting RESTATEMENT (SECOND) OF CONTRACTS § 34(2)). “When the parties’ actions

demonstrate that they intended to ʻconclude a binding agreement, even though one or more

terms . . . are left to be agreed upon . . . courts endeavor, if possible, to attach a sufficiently

definite meaning to the bargain.’” Id. (quoting RESTATEMENT (SECOND) OF CONTRACTS §

33(2) cmt. a.). Accordingly, “[t]he law favors finding agreements sufficiently definite for

5 A court can also reform a contract if it does not accurately reflect the parties’ agreement due to mistake or fraud. See Gilbane Bldg. Co. v. Keystone Structural Concrete, Ltd., 263 S.W.3d 291, 300-01 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (“Equity has jurisdiction to reform written instruments in cases of mutual mistake, but a written contract will not be reformed in equity because of a mistake, in the absence of fraud, unless it is mutual.”). Here, no party has asked the Court to reform the Letter Agreement. 6 In cases where perpetual contracts contemplate one party spending substantial money to perform its obligations, courts imply a reasonable duration and provide the contract may not terminate at will. Clear Lake City, 549 S.W.2d at 391.

OPINION AND ORDER, PAGE 15 enforcement, particularly . . . where one of the parties has performed his part of the

contract.” Id. (internal quotation marks omitted).

¶ 30 Slant Operating performed its part of the Letter Agreement (which, of course,

includes the Future Waiver Provision) by providing the Green Gables waiver to Octane.

Slant Operating’s partial performance suggests the parties intended to conclude a binding

agreement and that the Letter Agreement was not merely an agreement to agree in the

future. For these reasons, the Court finds that the Letter Agreement is enforceable as a

matter of law.

3. Slant Operating’s construction of the Letter Agreement is not unreasonable, oppressive, or absurd.

¶ 31 Octane cannot prevail on its argument that Slant Operating’s construction of

the Letter Agreement is unreasonable, oppressive, and would lead to absurd results. When

construing a contract, courts typically do so “from a utilitarian standpoint bearing in mind

the particular business activity sought to be served” and avoid applying a construction that

is “unreasonable, inequitable, and oppressive.” Frost Nat. Bank, 165 S.W.3d at 312. “[A]

contract interpretation that allows one party to a contract to use unilateral discretion that

results in inequitable consequences to the other party is

unreasonable, inequitable, and oppressive.” HSM Adkisson Ranch, Ltd. v. Megatel Homes

III, LLC, No. 02-19-00213-CV, 2020 WL 3456128, at *3 (Tex. App.—Fort Worth June 25,

2020, pet. denied) (mem. op.) (citing Frost Nat’l Bank, 165 S.W.3d at 313) (internal

quotation marks omitted). “However, parties make their own contracts, and it is not within

the province of this court to vary their terms in order to protect them from the consequences

OPINION AND ORDER, PAGE 16 of their own oversights and failures.” Springer Ranch, Ltd. v. Jones, 421 S.W.3d 273, 280

(Tex. App.—San Antonio 2013, no pet.) (internal quotation marks omitted).

¶ 32 A commonality for unreasonable, inequitable, and oppressive agreements is

a party’s sole discretion to act while the other party receives little to no benefit. See e.g.,

Frost Nat’l Bank, 165 S.W.3d at 313 (lessee’s construction of an equipment-lease

agreement allows, at the lessee’s discretion, the lessor to “essentially . . . forgo almost the

entire rental value of the equipment and sell it almost new for twenty percent of its value,

the same price it would receive for selling the equipment at the end of the lease term after

collecting rent on it for sixty months”); Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530

(Tex. 1987) (managing general partner’s construction of a limited partnership agreement

provides “the managing general partner the authority to drastically dilute the limited

partner’s $50,000 units so as to work a practical forfeiture”); Hackberry Creek Country

Club, Inc. v. Hackberry Creek Home Owners Ass’n, 205 S.W.3d 46, 61–62 (Tex. App.—

Dallas 2006, pet. denied) (association’s construction of a membership agreement required

country club “to operate a first-class, high quality, private country club” in

perpetuity “regardless of its costs of performing, and prohibited [club] from realizing any

benefits from the increase in its property values”); HSM Adkisson Ranch, 2020 WL

3456128, at *3 (seller’s construction of a lot purchase contract allows seller to unilaterally

and repeatedly extend the lot development deadline without notice and render the

purchaser’s termination right meaningless).

OPINION AND ORDER, PAGE 17 ¶ 33 Octane claims Slant Operating’s construction of the Letter Agreement is

unreasonable, and oppressive, and would lead to absurd results because it allows Octane to

receive waivers for the Green Gables Wells in exchange for “an essentially infinite number

of wells requested by Slant [Operating] at any point in the future—no matter the

circumstance, location, or cost to Octane.” Def.’s Resp. at 16-17. Octane asserts Slant

Operating’s damage amount (over $10 million) far exceeds the amount Slant Operating

previously offered to purchase Section 13 ($2.8 million), Octane’s leasehold that contained

the Gardendale Wells. Id. at 17. It claims this further shows the absurdity of Slant

Operating’s contract construction. Id. Notably, Octane offers no alternative construction

of the Letter Agreement and does not allege ambiguity. The Court disagrees with Octane.

¶ 34 First, Octane contracted to receive two benefits: (1) waivers for the Green

Gables Wells and (2) various forms of production data for all of Slant Operating’s future

wells for which it requests waivers. While providing waivers in perpetuity may seem

oppressive to Octane, the same can be said for Slant Operating providing well production

data in perpetuity to Octane. Because both parties freely contracted for their respective

benefits under the Letter Agreement, the Court is not convinced the contract is

unreasonable, inequitable, or oppressive akin to the above cases.

¶ 35 Regarding absurdity, Octane has not produced any evidence supporting its

absurdity argument. “Unless it is quite impossible that a rational person could have

intended the result that follows from enforcing unambiguous contract language, courts

should enforce the language, even if the parties’ agreement yields an inequitable or

OPINION AND ORDER, PAGE 18 improvident result.” Fairfield Indus., Inc. v. EP Energy E&P Co., L.P., 531 S.W.3d 234, 250

(Tex. App.—Houston [14th Dist.] 2017, pet. denied) (internal quotation marks omitted).

“This standard makes it especially difficult to prevail under the absurdity doctrine.” Id. A

rational person reads the Future Waiver Provision and ascertains Octane is indefinitely

required to provide requested waivers for Slant Operating’s future wells. Therefore, even if

the result of the parties’ bargain is inequitable to Octane, absurdity is inapplicable here.

¶ 36 Further, Octane has offered no compelling reasons to disturb the parties’

choice to enter into the Letter Agreement. During negotiations, Octane had ample

opportunities to review the Letter Agreement’s terms and propose language modification,

to the Future Waiver Provision. That Octane now regrets entering into the deal is not

reason enough for the Court to find the deal unreasonable, oppressive, or absurd. See

Rubinstein v. Lucchese, Inc., 497 S.W.3d 615, 625 (Tex. App.—Fort Worth 2016, no pet.)

(“Parties to a contract are masters of their choices and are entitled to select what terms and

provisions to include in or omit from a contract.”); Phila. Indem. Ins. v. White, 490 S.W.3d

468, 471 (Tex. 2016) (“Absent compelling reasons, courts must respect and enforce the

terms of a contract the parties have freely and voluntarily entered.”).

¶ 37 And, considering the parties’ experience in the oil-and-gas industry, it is

difficult to believe that Octane would agree to oppressive deal terms. See Finley Res., Inc.

v. Headington Royalty, Inc., 672 S.W.3d 332, 344 (Tex. 2023) (when interpreting contracts,

in addition to commercial setting and trade custom, “courts may consider the

OPINION AND ORDER, PAGE 19 sophistication of the parties . . . which carr[ies] an expectation that the parties were aware

of what to bargain for and understood the terms of their written agreement”).

¶ 38 Based on the foregoing, the Court does not characterize Slant Operating’s

construction of the Letter Agreement’s Future Waiver Provision as unreasonable,

oppressive, and or leading to absurd results.

4. Slant Operating was not required to exhaust administrative remedies.

¶ 39 Slant Operating did not fail to exhaust administrative remedies before filing

suit. A plaintiff is required to exhaust all administrative remedies prior to filing suit if a

state agency has exclusive jurisdiction over the dispute. Subaru of Am., Inc. v. David

McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002). If the plaintiff fails to exhaust

these remedies before filing suit, the trial court will be deprived of subject-matter

jurisdiction and must dismiss the case. Id. Whether an agency has exclusive jurisdiction

over a dispute is up to the legislature. “An agency has exclusive jurisdiction when a

pervasive regulatory scheme indicates that Congress intended for the regulatory process to

be the exclusive means of remedying the problem to which the regulation is addressed.” Id.

(internal quotation marks omitted).

¶ 40 Whether an agency has exclusive jurisdiction is a question of statutory

construction. City of Richardson v. Bowman, 555 S.W.3d 670, 679 (Tex. App.—Dallas

2018, pet. denied). Statutory construction is a question of law. Cadena Comercial USA

Corp. v. Tex. Alcoholic Beverage Comm’n, 518 S.W.3d 318, 325 (Tex. 2017). The goal of

statutory construction is to ascertain and effectuate legislative intent. Id. Legislative

OPINION AND ORDER, PAGE 20 intent is expressed in the plain and common meaning of the statutory text “unless a

different meaning is supplied, is apparent from the context, or the plain meaning of the

words leads to absurd or nonsensical results.” Id. Courts presume the legislature chose the

statutory text “with care, including each word chosen for a purpose, while purposefully

omitting words not chosen.” Id.

¶ 41 The Texas Legislature has tasked the RRC with adopting and enforcing rules

to prevent waste and protecting correlative rights. TEX. NAT. RES. CODE § 86.042(1)-(2),

(5); see id. §§ 86.082–.083. One such rule is Statewide Rule 86 (“RRC Rule 86”), which

was codified in the Texas Administrative Code. See 16 TEX. ADMIN. CODE § 3.86. In

addition to setting forth procedures for the approval of horizontal drain hole drilling

applications (including off-lease drillings), RRC Rule 86 also provides that the RRC can

grant exceptions to these procedures to prevent waste and protect correlative rights. Id. §

3.86(h)(1). But nothing in Rule 86 discusses the RRC’s ability to adjudicate contract

disputes between oil-and-gas companies or leaseholders.

¶ 42 Nothing indicates the legislature intended to give the RRC exclusive

jurisdiction over the type of breach-of-contract claim before the Court. Compare TEX. NAT.

RES. CODE § 86.042, and 16 TEX. ADMIN. CODE § 3.86, with TEX. UTIL. CODE §§ 15.001,

17.157, 32.001 (granting the Texas Public Utility Commission exclusive jurisdiction over

contract claims against regulated entities regarding failure to provide services). There are

no rules or statutes that indicate the RRC has exclusive jurisdiction over contract claims

where the RRC is not a party.

OPINION AND ORDER, PAGE 21 ¶ 43 Here, Octane asserts Slant Operating’s claim that it lost millions of dollars in

revenue from the alleged breach “implicate[s] a claim of waste and Slant’s correlative rights

to oil under its own property,” triggering the need to exhaust administrative remedies.

Def.’s Resp. at 19. Further, Octanes argues a successful hearing before the RRC to get

permission to drill the Gardendale Wells off lease would have mitigated Slant Operating’s

damages and obviated the need to file suit. Id. at 20-21. The Court disagrees.

¶ 44 First, Octane has not presented any statutory law, case law, or administrative

rules or decisions otherwise indicating that the RRC had exclusive jurisdiction over this

dispute. Further, there is no clear indication that the legislature intended to abrogate

common-law rights, such as filing suit in a court of law for breach of contract. See Forest Oil

Corp. v. El Rucio Land & Cattle Co., 518 S.W.3d 422, 428 (Tex. 2017). Moreover, a

successful hearing before the RRC would not have mooted a breach-of-contract claim

against Octane. Even if the RRC granted Slant Operating’s application to drill the

Gardendale Wells on Octane’s leasehold, Octane would have breached the Letter

Agreement by not providing the requested waiver, and Slant Operating would have a

breach-of-contract claim. Slant Operating would still suffer damages, including expenses

related to the drilling redesign.

¶ 45 Therefore, the Court finds Slant Operating was not required to exhaust

administrative remedies before suing Octane.

OPINION AND ORDER, PAGE 22 5. Waiver, estoppel, and excuse do not apply.

i. Waiver

¶ 46 Octane cannot prevail on its waiver argument. Waiver is “an intentional

relinquishment of a known right or intentional conduct inconsistent with claiming that

right.” Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003) (per curiam). Waiver focuses

on a party’s intent, although that intent need not be explicit. LaLonde v. Gosnell, 593

S.W.3d 212, 219 (Tex. 2019). “A party’s conduct sufficiently demonstrates intent to waive

a right if, in light of the surrounding facts and circumstances, it is unequivocally

inconsistent with claiming that right.” Id. (internal quotation marks omitted). Although

waiver is typically a question of fact, it can become a question of law when the surrounding

facts are undisputed. Jernigan, 111 S.W.3d at 156.

¶ 47 Octane argues Slant Operating is precluded from summary judgment because

Slant Operating did not initially request a waiver for the Gardendale Wells when it became

aware Octane was trying to sell Section 13. See Def.’s Resp. at 21-22. Octane argues it was

only after five months into exclusive negotiations with another party to sell Section 13 did

Slant Operating “reverse[] its position, demand[] waivers, and file[] suit against Octane.”

Id. at 22. It asserts Slant Operating “led Octane to believe that it would not seek such

waivers or interfere with the sale,” and believes this ultimately raises fact issues and

precludes summary judgment. Id. The Court disagrees.

¶ 48 Octane has presented no evidence that Slant Operating intentionally

relinquished the right it had under the Letter Agreement to request waivers or that Slant

OPINION AND ORDER, PAGE 23 Operating’s conduct was inconsistent with claiming that right. The emails Octane

submitted to support a waiver theory demonstrate Slant Operating’s decision not to

immediately request a waiver for the Gardendale Wells when it became aware that Octane

was negotiating the sale of Section 13 with another party. See Def.’s Resp. at 21–22; De f.’s

Resp., Exs. A-7, A-8, A-11, A-12, A-15. Although Slant Operating offered to purchase the

leasehold, the parties never reached a deal. After Octane informed Slant Operating another

party had exclusive rights to purchase Section 13, and after Slant Operating’s offer to

purchase the land was not accepted, Slant Operating requested a waiver for the Gardendale

Wells. See Def.’s Resp., Ex. A-7 to A-13. The evidence shows Slant Operating had a

continual interest in developing at least part of Section 13 via ownership (by purchasing the

land from Octane) or off-lease drilling. 7 That Slant Operating initially sought to purchase

land is not evidence it intentionally relinquished the right to request a future waiver from

Octane. In other words, Slant Operating’s conduct did not demonstrate an unequivocal

intent to waive a right. See Jernigan, 111 S.W.3d at 157-58. Octane cannot prevail on its

waiver argument.

ii. Estoppel or Quasi-Estoppel

¶ 49 Octane has failed to present evidence proving estoppel or quasi-estoppel.

Estoppel is “conduct which causes the other party to materially alter his position in reliance

on that conduct.” Inimitable Grp., L.P. v. Westwood Grp. Dev. II, Ltd., 264 S.W.3d 892, 902

7 Slant Operating owned the land immediately to the north and south of Section 13, further incentivizing property development. See Def.’s Resp., Ex. A-10.

OPINION AND ORDER, PAGE 24 (Tex. App.—Fort Worth 2008, no pet.). The doctrine “prevents one party from misleading

another to the other’s detriment or to the misleading party’s own benefit.” Ulico Cas. Co. v.

Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008). Estoppel has five elements:

(1) a false representation or concealment of material facts, (2) made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted on, (4) to a party without knowledge or means of obtaining knowledge of the facts, (5) who detrimentally relies on the representations.

Inimitable Grp., 264 S.W.3d at 902. Quasi-estoppel applies “when it would be

unconscionable to allow a person to maintain a position inconsistent with one to which he

acquiesced, or from which he accepted a benefit.” Lopez v. Munoz, Hockema & Reed, L.L.P.,

22 S.W.3d 857, 864 (Tex. 2000). Quasi-estoppel does not require a false representation or

detrimental reliance. Forney 921 Lot Dev. Partners I, L.P. v. Paul Taylor Homes, Ltd., 349

S.W.3d 258, 268 (Tex. App.—Dallas 2011, pet. denied).

¶ 50 There is no evidence that Slant Operating made false representations to

Octane or that Octane relied on such representations to its detriment. Slant Operating

never expressed it would not seek future waivers related to Section 13. And, as discussed,

Slant Operating’s unsuccessful attempt to purchase Section 13 is independent from its

subsequent Gardendale Wells waiver request. Accordingly, Octane does not have a viable

estoppel or quasi-estoppel defense.

iii. Excuse

¶ 51 Excuse is inapplicable to Slant Operating. Excuse is an affirmative defense

that excuses a party from performing its contractual obligations if the other party commits

OPINION AND ORDER, PAGE 25 a material breach. 8 Orr v. Broussard, 565 S.W.3d 415, 422 (Tex. App.—Houston [14th

Dist.] 2018, no pet.). Octane has not alleged or provided evidence showing that Slant

Operating committed a material breach of the Letter Agreement. Therefore, excuse also

does not apply.

¶ 52 Based on the foregoing, Slant Operating’s Motion is GRANTED.

V. OCTANE’S MOTION FOR SUMMARY JUDGMENT

¶ 53 Octane seeks summary judgment on Slant Operating’s breach-of-contract

claim. Octane largely asserts the same arguments in its motion as it does in response to

Slant Operating’s motion. 9 Therefore, the Court adopts its above findings.

¶ 54 Accordingly, Octane’s Motion for Summary Judgment is DENIED.

VI. CONCLUSION

¶ 55 The Court concludes Slant Operating is entitled to partial summary judgment

on liability. The Letter Agreement was an enforceable agreement into which Octane freely

entered. Slant Operating fulfilled its contractual obligations by providing Octane the Green

Gables Wells waiver upon request and Octane breached the Letter Agreement by not

providing the Gardendale Wells waiver.

8 Octane claims excuse is also a viable affirmative defense but did not brief the issue. 9 Octane did not re-assert its affirmative defenses (waiver, estoppel, and excuse). However, in Octane’s Reply in Support of its Motion for Summary Judgment, it raises the novel issue of whether Slant Operating has authority to bring its claim against Octane because it added two additional Plaintiffs. See De f.’s Reply at 1. The Court concludes Slant Operating, as a signatory to the Letter Agreement, has standing to bring a contract claim against Octane and, for the reasons set forth in this Opinion, is entitled to partial summary judgment. The Court analyzes the third-party beneficiary issue in a separate Order and Opinion.

OPINION AND ORDER, PAGE 26 ¶ 56 Consistent with this opinion, it is ORDERED that Slant Operating’s Motion

for Partial Summary Judgment is GRANTED. It is further ORDERED that Octane’s

Motion for Summary Judgment is DENIED.

JERRY D. BULLARD Judge of the Texas Business Court, Eighth Division SIGNED: December 22, 2025.

OPINION AND ORDER, PAGE 27