Lightning Oil Company v. Anadarko

520 S.W.3d 39 (2017)

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Nature of the Case

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Facts

D, entered into an oil and gas lease that restricted its use of the surface estate and required it to drill from off-site locations 'when prudent and feasible.' D planned to locate well sites on the surface of adjacent tracts and use horizontal drilling to produce minerals from its lease. Briscoe Ranch, Inc., owned an adjacent surface estate and agreed that D could drill from the surface of the Ranch. P lessee of the minerals underlying the Ranch was not a party to the agreement. P sought to enjoin Anadarko from drilling on the Ranch, claiming that P's consent was necessary before D could drill through the Ranch's subsurface covered by its mineral lease. P sued D for trespass on P's mineral estate and tortious interference with contract for interfering with its mineral lease. It also sought a temporary restraining order and an injunction prohibiting D from drilling on the Ranch. D and the Ranch owners entered into a Surface Use and Subsurface Easement Agreement (Agreement) that specifically authorized D to locate wells on the surface, drill through the subsurface, and use the wells to produce minerals from beneath the Chaparral. P and D both filed for summary judgment. The trial court granted D's motion for partial summary judgment, denied P's motions. The court of appeals affirmed. It concluded that 'the surface estate owner controls the earth beneath the surface estate' and 'may grant D permission to site a well on its ranch, drill down through the earth within the boundaries of the Cutlass Lease, and directionally alter its wellbore into the [Chaparral].' The court held that the mineral estate owner does not control the subsurface mass and is only entitled to 'a fair chance to recover the oil and gas' from its mineral estate. It concluded that P had no right to exclude D from the land masses encompassed by the Cutlass Lease. P appealed. P argues that the dominant mineral estate has the right to exclude those seeking to pass through it and to hold otherwise will transform the absolute ownership rights of a mineral owner or lessee in oil and gas in place into a mere license to hunt for the minerals.