t to paragraph seventeen for the service use agreement between the parties and to understand in the briefing really focused on the defenses the ways around why you should give effect to that paragraph but as a board remember that in december two thousand and five the party centered into a twenty two paragraph agreement the services roughly thirteen opposed to severe restrictions on the dictations on how and where operations for drilling and producing oil and gas could take place the rest fourteen or fifteen provided for an override or minimum override insurance twenty conveyed all surface rights by the lessee back to the surface owners the partnership for that all the rights that the drilling operator had were pursued to the for over a year and a half the operator drilled the well which meant it built some of the facilities that were dressed in paragraph seventeen and then in december of two thousand sorry in july of two thousand and seven second trans n took place where the fort worth partners sold the surface of the land to chesapeake they also sold another parcel nearby and that transaction required the amendment of three agreements being the service use agreement the lease between the partnership in chesapeake and the operating room between the partnership in chesapeake the master amendment these v the service user agreement struck specifically paragraphs one through thirteen and did not strike any other provision expressed it said specifically so that the fort worth partners shall no longer be entitled to restrict or limit power where operations for drilling operating in producing oil and gas or the minerals under the lease are conducted the parties agreed to delete any provision which purports to limit limited needs to be understood through the concept of what exactly they're trying to what whites they're trying to obliterate which or the fort worth partners rights to restrict or limit how or where operation for drilling operating in producing a house took place that's the context of it and you have to read both the sentence saying these rights are deleted with the context of the sentence before it under pass or a fine for example when it had been better to make a specific reservation of the paragraph seventeen deferred compensation obligation well i think when all this revision was taking place i mean that would have been a way to do it of course but then you would have had to fourteen fifteen sixteen and all of them with the parties did to dread are they worth two million dollars like this one the overall is worth more than well more than that because they have an override in every well that just me drills in the entire halo around bot they specifically amended paragraph fourteen and then the left the rest implication in the of the or you what we're hearing from chesapeake is that the sale of the surface of the land has these sort of legal effects and therefore they now wri they have the benefit to the to the payment but the important point on that is in the master amendment to your point about what they could have done or you couldn't do they included a specific provision on what effect if any to give sale the surface and the party said the parties agreed to acknowledge the terms of provision of the lease the service user agreement the joint operating agreement as amended hereby shall remain in force in effect here is important not withstanding the fact that chesapeake has acquired the simple title to the surface of the lands they tell us that the sale of the land does not change the rest of the structure you have fundamentally six different agreements going around three of them and amended by the master amendment and you have a j away five other agreements in this very complex structure and they have the sale of the land and they're saying look when we sell the land we change what we change but we're not changing anything else it's a specific provision that addresses the sell the land that the parties agreed to at the time and now years later they're saying oh no you sold us the land therefore we give receive the benefit well the agreement says that's exactly what doesn't happen and i think the district court failed to give effect to that provision relationship like a lot of winners but just because not great and so there was a lot of issues about getting the assignments getting the you know getting everything up to pay and when finally they came to us it was a litany of issues that we brought to chesapeake we result most of the by bus settlement and this one issue remained and we just put it to trial and we in fact put it to cross a motion for summary judgment which was denied in our part and grant that if you ever just you know if you're a very simple question the the law of this circuit as recognizing texas law is that those broad statements if anything talk about the intent of the parties and they don't buy they don't mean when this at this point in order for a away and if it doesn't touch a concern the land then it doesn't so these sort of provisions what they were there for was frankly when i talked about the the halo the partners were terrified the chesapeake would grant this right and then just do some land swap and then there'd be a different operator in all these areas and halo and their rights would go away so those rights those rights to receive overrides and more importantly because if they do it separately the burden on chesapeake to about here in this case on a pair of seventeen it is the fort worth partners rights to receive cash payment for the use of the land there's no question that the burden the obligation to pay ones of the land is so when you have the succession from dale to chesapeake the chesapeake land of whomever whoever owns those rights is back a doubly geisha because it's such as it concerns the land but the recipient the beneficiary the partners the receipt of cash payment doesn't the touching concern the land it doesn't affect the they are the fourth partners rights or interest or use in the land and that's the one of the another fundamental mistake that the district were made was she looked at the energy t case and orders a present interest of your plan and restricting the usage of the land they have none they have just only the right to payment but that right to payment doesn't change their right to the and that's the point it's personal to them the right to payment the obligation to pay that runs of the land because you have to look at just the benefit and they look at just the burden sometimes the burden on sometimes the benefit runs and you can't you can't look and say well because the burden runs which here it undoubtedly does there for the benefit once the texas courts requiring the fiserv is recognized as a separate analysis but the benefit was timed it ended after x number of years was that day six years after entering into service use agreement payment was due because the ownership changed and i think the fundamental question the way i'm going to get my head around the whole notion of running with a lender not is if i can assign that right to whomever then it doesn't run of the land do these partners enjoy the right to be paid and it was they could have done nothing else with the land at all and they still would have had the right to beat it and that's why it doesn't affect their rights their rights and interests in the in the land all the cases  burden cases where oh we'll we're going to have to pay for you know a pipeline going across my property we're going to pay you for the right to use a pipeline that goes across your property those are the obligation to pay when you have the obligation is a burden and you're the recipient is the benefit and i posit i couldn't find a single case anywhere where the right to receive a cash payment was a benefit a star it was a friend of the land and it's just really important to touch on the fact that the energy take case  just misstated frankly when it says does the in the in the in the in the just be brief tries to get into a little bit does the right to receive payment run of the land what energy tech talked about was in fact sold it sold the pipeline and energy tax had to pay the newco energy tech went into bankruptcy and then sold the pipeline and the question is does the sale the pipeline going through bankruptcy strip that covered it so if it and therefore there's no   chesapeake must agree or a certain number well whether certain time there's that would that not run with the land either that would be like that would be used you could still control that kind of right even though you so the land i think can no longer have even an interest in the surface i think that right would run with the land that white right was stricken through the image  the notion that you can't define what these terms mean the service sort of the operational facility the operational side the central facility in frankly the fact that the water supply tank fundamentally you can look to the the conforming amendments you can look at ordinary usage we're going to ask those perks experts for the court literally put it in put it put the hand over the terms and said i just can't read them because they're deleted but the deletion ago that is that the surface used payment obligation was a provision that ran with the land and fourth street as the district court found lost that right to payment when he conveyed the surface and all agreements a pertinent to that land to chesapeake land in two thousand and seven it is or no one gets paid that money well chesapeake land is entitled to it from chesapeake operating and secondly the district court found that the parties expressed deletion of all provisions of the agreement that the surface use agreement that restrict or limit the surface use were eliminated and it it defies common sense to say that a surface use agreement first of all is not a pertinent to the surface which is entirely conveyed together with all agreements apartment to it in the two in that two thousand and seven conveyance to chesapeake land what when i'm having a hard time with is that it's deferred compensation so for x number of years they got to use the land and then when that appeared to thomas over and then they would pay the compensation so the person who allowed got a company and allowed that to happen isn't getting paid here your client wants the money so it seems like if you're deferring something it's oh it would and then it's going to be paid at a later date but it doesn't seem accurate overall or even normal that after all this time deferring payment the payment would go to an entity that had nothing to do with the operation of the land or whatever during those years it's not a deferred payment nope the parties know were described as a dud they call the deferred consideration what they did not take what they call that was the damage payment for surface use that's why it is that's why it's title that it covered a certain number of years it covered and it was already the years of payment worth it to take place for those years had passed the payment they did make it deferred the payment was for the use of the surface for oil field operations during the first six years that the service he's agreement was the payment was deferred it wasn't required timely it was put off to a later date i suppose you could could phrase it that way but the reason the payment wasn't due until six years after oil field operations commence was because it could only be calculated based upon the square footage used in three specifically defined areas  that six year period it couldn't be calculated and in fact if if chesapeake or dale resources its predecessor had never commenced oilfield operations then there would have been no surface use payment due because it would be necessary for sure that there would be no surface use which again it establishes that the surface used payment touches and concerns the land that's one of the five essential elements under energy tech that determine whether or not a covenant runs with the land whether or not force rick can legitimately claim that even though convey the services state and all contracts are pertinent to it whether it can say this was just a personal benefit for us even if we never own the land that so what the law says is if that right which the party stipulated was a covenant running with the land touched  concerned the land among with among other issues they that they intended to run with the land which the parties agreement say they do and three other elements which the parties don't dispute including that the covenant relate to a thing in existence like the land that would be pretty the state which nobody contests under all of the elements established by energy tax that recognizing in basing its it's the the discussion of those elements on the texas supreme court case the district court correctly found that the right to the surface used payment was a covenant running with the land to the extent that it survived at all the master minutes deletion of all terms that imposed a limitation on the use of the land that the surface use payment self because it because it imposed a penalty in essence or damages payment for each additional square foot of land that was used within these three narrowly defined areas within the broader surface track was in itself a limitation on the use of the land it therefore was stricken by the master minute that our position your honor is that the obligation to make the service use payment no longer exists secondly they are not going to get the money well the money is no longer do once the master well it would be paid from chesapeake to chesapeake because chesapeake operating is a separate affiliate someone going to be paid i think the obligation is essentially extinguished the theme back and fusion sorry that's what we call in texas a merger the the second component of the court's decision the district court's decision to determine that the obligation was on a forcible was that the only way you can calculate the amount of the surface use payment is by reference to these definitions in the contract where the the service use agreement imposed limitations on what chesapeake could or dale resources its predecessor the operator could do where it could do it how it could do it what the it what the aesthetics would look like those were in these paragraphs one of them was in paragraphs one through thirteen which were expressly deleted and then three or two others were in paragraph sixteen which was not expressly deleted but which also contained substantial and severe limitations on the use of the surface so when the master mimic the parties agreed anything in the service use agreement that limits the ability to use the service is hereby eliminated that eliminated those definitions if you don't know if those definitions aren't there there's no basis to determine the amount of the payment to be due under paragraph seventeen because paris graph seventeen relied entirely upon those death of definitions and also the only record evidence of claim damages is evidence from from four streets expert as to what the payment would have been had the agreement never been amended and had the definitions that were deleted continued to be applied so seventeen deleted i paragraph seventeen was delayed in my view on because that imposed a limitation it wasn't explicitly your it was not it can't be calculated well that's it that's those are two alternative arguments the pair that argue your honor is that because any provision of an agreement that compels an additional payment for each additional square foot of surface use in specifically defined areas constituted a limitation on the mineral interest owners right to use the surface keep in mind under texas law the mineral interest estate is dominant head had the service use agreement never been executed there would have been no restriction unfettered reasonable use would have been available today all resources in chesapeake for extracting the minerals so the surface use it is it different it defies reality to say the surface use agreement which sole purpose as mr shares technology was to limit the ability of the mineral interest the state owner to use the surface that that somehow does not touching concern the land makes no sense so it is correct that the parties in your stipulation that a covenant touches and concerns the land it is a covenant running with land is not dispositive there is a test and it was a it was expressed by this court in energy tax based on texas law it's a five part test the district court correctly applied it the parties into the only two elements that were in dispute here were whether the the service use payment provision touchtone concerned the land which it did and whether or not the parties intend the arguments that the pain that the service was paying obligation touched a concern the land therefore ran with the surface estate is independent of the argument that arguing and they're not correct the district courts the district court correctly determined that the surface use payment provision met all of the requirements to run with the land under inner gtech the benefit in burden distinction is a red herring here it doesn't make any difference whether you indicate whether you evaluate benefit and burden separately or together because they're the flip side of the same coin you calculate the amount of the payment based upon the surface use used for the amount of surface used you can't it doesn't exist in a vacuum and it does it's not deferred compensation for is that there's force treated originally contended the mineral lease and secondly they the payment was intended by the parties to be a covenant running with the land if all those if all those elements scheme i mean where or why isn't it just a matter of whether the parties agree it would run with the land or not i'd i can't they don't have an answer for you're on the it is well established case law goes back many decades and there is a five part test and again the district court directly apply again the only two issues that were presented in this context the facts of this case are whether the parties intended the cover to run and whether covenant touched a concern the land the one that the one that has been most heated lee debated is whether the obligation to make the service use payment touches the concerns of the land whether it benefits the land it burdens the land and again those are flip sides of the same burdens of the land but texas law requires a separate analysis of whether the burden runs and whether the benefit on this court has repeatedly recognize that requirement out of state you to record a mobile oil corp three eighty five a second nine fifty one where the court quoted at length if the promise or is legal relation in respect to the land or are lessened his legal interest are rendered less valuable the burden of the covenant runs with the land if the primacy is legal relationships are increased his legal interests as owner are rendered more valuable and the benefit of the covenant touches and concerns the land you have to do this burden set in benefit analysis separately he keeps talking chesapeake keeps talking about the burden rise the burden the greed the right to payment does not touch and concern the land you can give me a million dollars or one dollar i have no more right to enter use sell convey enjoy or anything the land into the question is whether it changes the obligation is the beneficiary of the promise that person's rights in the land it's a it's a hard concept to get around but i finally got my head around it as the owner in that if i have a benefit that benefit affects my rights in the land i can go use it sell it enjoy it whatever then that benefit runs of the land in for example again immobile the benefit of the land because the benefit was that th the mineral company would worry various pipelines and in the service owner could farm that's a benefit to you because of the because the dominant estate could could just leave the pipelines above but the payment the met the fact that you calculate payment by the number of acres used or square foot is used doesn't increase or decrease the recipient of the payments rights in the land it it may affect to pay yours rights in the land and that's why does one of the land but the two are separate analyses are separate and in the texas law in that is crystal clear in this courts that here is to that is crystal clear and i listen really carefully i hope everyone who dear to you never heard chesapeake articulate how the benefit to payment effects the fort worth partners rights to the land because it just does not or you would say that the district judge not apply that test correctly absolutely on a sheep to the district court absolutely and analyze the burden satisfied itself that the burden room of the land and that was it correctly and find that the the benefit did not run away and one should conclude that it flips because now there's nothing stopping the payment and the payment should come to the fore partners except for the issue of the indefinite terms which there those words are not gone they're still there and they still have meaning and if the courts confuse it all as to what those words actually mean if you don't issue virtue look to industry usage you would look at the usage between the parties you could get extrinsic evidence you can't just throw up your hands is a gully gee i don't know what the word operational site means and that's just what it is it's about a way to say the whole thing was deleted by implication the whole obligation was simply deleted by them good implication which gets me to my final point the least between the partners and chesapeake had itself separate and apart from paragraph seventeen of the service use agreement a surface damages provision paragraph twenty one that lease that that provision was invaluable at five hundred thousand dollars if you tease out all the numbers that were in there the parties expressly deleted that in the service in the master amendment they explicitly deleted one obligation to pay for the surface of the land and they did not delete the other one now either they just messed up or that was on purpose and on summary judgment of the posit you can't just assume that they messed up they did it on purpose and the you can tell they did on purpose provision the sale of the land makes no affect on a thing that we didn't touch and they knew about the issue of surface damages they struck it from the lease it left it in the surface use agreement the payment was different for six years and it's d