Allocation Well Disputes in Texas
Texas Oil & Gas Association, Austin Court of Appeals
Submitted amicus curiae brief on behalf of TXOGA in case involving PSA well. Lessor argued that lease language forbidding pooling prohibited the operator from drilling a PSA well across the lease. Amicus curiae brief on behalf of TXOGA explained the nature of PSA and allocation wells and their importance to the industry and argued that PSA wells are not a form of pooling. The Austin Court of Appeals agreed, ruling in favor of the operator.
Type of Case: Amicus Curiae Briefs, Allocation Well Disputes in Texas
McCully-Chapman Exploration, Inc. v. Ovintiv USA Inc.
Represented Ovintiv USA in a federal bench trial in the Western District of Texas concerning application of a joint operating agreement (JOA). Plaintiff, a working interest owner in dozens of horizontal wells drilled by Ovintiv in Upton County, sued Ovintiv, asserting that a model form JOA executed in the 1980s—before the Shale Revolution—was inapplicable to horizontal wells drilled and completed between 2019 and 2021. Ovintiv maintained that the JOA applied to horizontal allocation wells traversing the contract area of the JOA, subjecting plaintiff to contractual “non-consent penalties.” Plaintiff also asserted title claims, alleging that Ovintiv had under-credited its interest in several wells.
After securing a pre-trial dismissal of plaintiff’s title claims, tried the JOA dispute to the bench. The firm secured a favorable federal court ruling finding that legacy agreements governed the horizontal wells drilled between 2019 and 2021. The decision provides critical legal clarity for more than 36,000 horizontal well permits across Texas.
Type of Case: JOA Disputes, Allocation Well Disputes in Texas, Adverse Possession