As the energy capital of the world, the oil and gas industry is a mainstay of the Houston economy. However, numerous energy disputes can arise that can be extremely difficult to resolve. Local, state, and federal regulations make oil and gas litigation complex, and companies facing disputes need experienced commercial litigation lawyers to find a resolution.
Oil and gas law in Texas sits on a deep body of statutes, Railroad Commission rules, and more than a century of case law. The Railroad Commission of Texas, despite its name, is the primary regulator of oil and gas production in the state, and many disputes involve its rules on drilling, pooling, and unitization alongside the private contracts between the parties. Whether the fight is between a landowner and an operator, two working-interest owners, or a mineral owner and a lessee, the outcome usually turns on the precise language of the lease or agreement and how Texas courts have interpreted similar terms.
Types Of Oil And Gas Disputes
Callender Bowlin has extensive experience representing a variety of businesses in the energy industry in oil and gas disputes. We can help with matters related to:
- Mineral rights
- Oil and gas production
- Royalties and lease agreements
- Land title ownership
- Property rights
- Breach of contract
- Joint operating agreements (JOA)
- Exploration agreements
- Drilling disputes
- Storage Disputes
Common Sources of Oil and Gas Disputes
Many energy disputes trace back to the same handful of pressure points. Royalty disputes are among the most common: owners and operators often disagree over how production is valued, whether post-production costs can be deducted, and whether payments reflect market value or proceeds. Because these calculations are technical and the money adds up over the life of a well, royalty cases frequently require close review of division orders, production reports, and lease language.
Lease obligations are another frequent flashpoint. A signed oil and gas lease is only the beginning, because Texas law reads certain implied covenants into most leases, including the duty to reasonably develop the property and the duty to protect against drainage from neighboring wells. When an operator lets acreage sit undeveloped or fails to act as a reasonably prudent operator, the mineral owner may have a claim for damages or, in some cases, lease termination.
Joint operating agreements generate their own category of litigation. Operators and non-operators clash over cost allocation, notice provisions, drilling obligations, and operator removal, and a party operating without a comprehensive written agreement can find itself subject to default statutory provisions it never intended. Title and ownership disputes round out the picture, from conflicting mineral claims and boundary questions to quiet-title actions needed to clear a defect before a project can move forward.
Resolving Oil And Gas Disputes
Because of the complexities of oil and gas law, each dispute requires its own unique legal strategy. Some agreements require the parties to arbitrate, while others are resolved through negotiation or litigation in Texas courts. The right path depends on the contract language, the amount at stake, the regulatory issues involved, and the client’s business objectives. An experienced energy litigator can assess those factors and chart a course that protects your interests while keeping cost and disruption in check. Only an experienced oil and gas lawyer can determine the best course of action in an energy industry dispute. If your business or family is facing an oil and gas dispute in Texas, contact Callender Bowlin today to discuss your options.
