NO. 03-12-00247-CV 

IN THE COURT OF APPEALS 

FOR THE THIRD JUDICIAL DISTRICT OF TEXAS 

AT AUSTIN 

ROLAND OIL COMPANY, 

Appellant, 

VS.. 

RAILROAD COMMISSION OF TEXAS, 

Appellee. 

On Appeal from the 353rdJudicial District Court 

Travis County, Texas 

Trial Court No. D-1- GN-08-003472 

APPELLANT'S MOTION FOR EN BANC RECONSIDERATION 

JEFFREY R. AKINS 

14350 Northbrook Drive, Suite 150 

San Antonio, Texas 78232 

Telephone: (210) 599-4905 

Facsimile: (210) 490-2776 

irakins@sbcglobal.net 

COUNSEL FOR APPELLANT 

June 25, 2015 

ORAL ARGUMENT REQUESTED 

ACCEPTED

03-12-00247-CV

5833244

THIRD COURT OF APPEALS

AUSTIN, TEXAS

6/25/2015 7:37:58 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 6/25/2015 7:37:58 PM JEFFREY D. KYLE Clerk
NO. 03-12-00247-CV 

IN THE COURT OF APPEALS FOR THE THIRD DISTRICT 

AUSTIN, 'TEXAS 

ROLAND OIL COMPANY, 

Appellant, 

VS. 

RAILROAD COMMISSION OF TEXAS, 

Appellee. 

On Appeal from the 353rdJudicial District Court, Travis County, Texas 

Trial Court No. D-1-GN-08-003472 

APPELLANT'S MOTION FOR EN BANC RECONSIDERATION 

TO THE HONORABLE COURT OF APPEALS: 

ROLAND OIL COMPANY asks the Court to grant this motion to reconsider the 

case en banc. 
A. Introduction 

Appellant is Roland Oil Company; appellee is Railroad Commission of 

Texas. 

2. A panel of the court issued the judgment and opinion in this case on 

February 27, 2015. A copy of the opinion is attached as Exhibit "A". 

3. The panel that rendered judgment in this case consisted of Justices Rose 

(Chief Justice), Puryear, and Field. 

4. The panel that rendered judgment denied Roland Oil Company's last 

timely filed motion for rehearing on June 10, 2015 by virtue of taking no action 

(automatically overruled). 

B. Argument & Authorities 

5. The Court has the authority to grant this motion and submit the case to the 

full court, sitting en banc. Tex. R. App. P. 41.2, 49.7. 

6. The primary issue in the appeal was whether Roland had a "good faith 

claim to title" to unitized oil and gas leases, under RRC rules, so as to be able to retain 

the plugging extensions previously granted by the RRC on two inactive injection wells 

and four inactive production wells on a waterflood unit operated by Roland. The RRC 

had concluded after an administrative hearing that Roland did not have a good faith 

claim to title. The court focused on the force inaj eure clause and the habendum clause 
in the unit agreement, specifically as to what constituted unit "operations" (necessary to 

perpetuate the unit) under the unit agreement. The panel resolved the issue by holding 

that it was reasonable for the Commission to conclude that Roland's work on these six 

wells during a fifteen-month cessation of production did not constitute unit operations. 

The court affirmed the district court's judgment affirming the Commission's order. 

7. The issue in this case presents such an extraordinary circumstance that 

resolution of the issue by the Court en banc is necessary. See Tex. R. App. P. 41.2(c), 

49.7. 

8. The opinion implicitly ratifies the RRC's conducting a trial under the guise 

of a mere hearing to determine if a "good faith claim to title" exists. By putting a 

microscope on the Unit Agreement language and the facts, as if it were a trial court, the 

RRC exceeded its jurisdiction and its authority under its own rule. Instead of 

questioning the RRC's authority/jurisdiction, the opinion also puts a microscope on the 

language and facts. This opens the door for lessors wanting to shoo off a lessee, to have 

title litigated for them, at no cost, by the RRC. The RRC will also appeal the case, 

saving even more money for the lessors. 

9. The opinion further sets up Roland for a motion for summary judgment by 

the lessor(s) that the unit (and therefore the leases in the unit) has terminated. This 

motion would be based on res judicata, and would cite this Opinion. 
10. The opinion converts the legal threshold of "good faith claim" into "fully 

adjudicated claim." 

11. If a lessor filed a lawsuit for unit (and lease) termination, Roland would be 

able to assert all its contract interpretations and also assert that the unit agreement (and 

included leases) is valid and in effect. These claims would be made in good faith and 

would not be subject to sanctions as unmeritorious or frivolous. Yet, "good faith claim" 

in this case goes far beyond that standard. Under the RRC rule, a "good faith claim" is 

"a factually supported claim based on a recognized legal theory to a continuing 

possessory right in a mineral estate, such as evidence of a currently valid oil and gas 

lease . . ." (Opinion, pp. 3-4). (emphasis added). Roland' s legal theories were that 

force majeure applied, and/or that unit "operations" was satisfied by the work on the six 

wells. These are recognized legal theories. Moreover, the definition requires 

"evidence", not matter-of-law proof, of a currently valid oil and gas lease. 

12. Also, this opinion will set precedent within the Third Court of Appeals 

region, but will have the effect of setting precedent statewide because the RRC is in this 

court' s jurisdiction. Lessors in Webb County can now have their termination claims de 

facto litigated in Travis County before the RRC. 

13. Also, this opinion is contradictory (and thus confusing) in that it states, 

correctly, that: 
(a) Roland had already obtained a plugging extension on the wells (Opinion, 

p. 4), 

(b) based on the RRC's presumed conclusion that Roland did not have a 

good-faith claim to operate the lease, ". . . the Commission staff rejected 

Roland's arguments and recommended that the plugging extensions be 

cancelled" (Opinion, p. 5), 

(c) the hearing examiner issued a proposal for decision, "recommending that. 

. . the plugging extensions be cancelled" (Opinion, p. 5), and 

(d) the Commission issued a final order "cancelling the extensions" (Opinion, 

P. 5); 

but the opinion later assumes that these wells were slated for plugging as follows: 

(e) the bulk of the "operations" evidence in the record relates to "the repairs 

and testing on the Lease's inactive wells in preparation for their being 

plugged." (emphasis added) (Opinion, p. 17), 

(f) "But for purposes of our review, the evidence in the record shows that the 

work in question . . . was done in preparation for plugging those inactive 

wells . ." (Opinion, pp. 17-18), and 

(g) " . . inactive wells slated to be plugged do not and will not produce oil or 

gas." (Opinion, p. 18) (emphasis added). 

14. For reasons of jurisprudence, this contradiction should be addressed by the 

court. Moreover, the court is asked to take judicial notice of the fact that in a 

waterflood unit, wells can be reactivated based on new technology or changed 

economics, and in that sense, based on reasonable inference, these wells were tested, 

repaired, and tested again, and plugging extensions obtained, so that these wells were 
available for later use in unit operations. All of this was "for or on account of the 

development and operation of the Unitized Formation" as provided in the Unit 

Agreement. (Opinion, pp. 14-15). 

15. For these reasons the opinion should be reconsidered. 

C. Oral Argument Requested 

The court should grant oral argument for the following reasons: 

a. Oral argument would give the court a more complete understanding of the 

facts and law presented in this appeal. This case involves the interpretation of a unit 

agreement for a secondary recovery unit (water injection) in which the unit is treated as 

one well This is a different animal than a pooled unit. It involves an administrative 

agency acting as a de facto court of law as to Roland's standing to operate, under a 

threshold standard of "good faith claim." Moreover, the court has written two opinions 

with two different results, the second of which contains material contradictory factual 

assumptions. 

b. Oral argument would allow the Court to better analyze the complicated 

legal issues presented in this appeal. For example, how far does the "good faith claim" 

rule allow the RRC to go in its inquiry, and what are the underlying facts. 
D. Prayer 

16. For these reasons, Roland Oil Company asks the Court to grant this 

motion to reconsider the case en banc. 

Respectfully submitted, 

By: /s/ Jeffrey R. Akins 

JEFFREY R. AKIN S 

State Bar No. 00962425 

14350 Northbrook Drive, Suite 150 

San Antonio, Texas 78232 

Telephone: (210) 599-4905 

Facsimile: (210) 490-2776 

jrakinsgsbcglobal.net 

ATTORNEY FOR APPELLANT, 

ROLAND OIL COMPANY 

CERTIFICATE OF COMPLIANCE 

This motion complies with the volume limitation of Tex. R. App. P. 9.4 because 

it contains 1,169 words, excluding the parts of the motion exempted by Tex. R App. P. 

9.4(i)(1). The undersigned relied on the word count ofMS Word, the computer program 

used to prepare the brief. 

/s/ Jeffrey R. Akins 

Jeffrey R. Akins 
CERTIFICATE OF SERVICE 

I hereby certify that, on the 25THday ofJune, 2015, a true and correct copy of 

the above and foregoing document has been served upon the following counsel of 

record, electronically through an electronic filing service provider. 

Anthony W. Benedict 

Assistant Attorney General 

Natural Resources Division 

P.O. Box 12548, Capitol Station 

Austin, Texas 78711-2548 

Anthony.benedicttexasattorneygeneral.gov Counsel for Railroad Commission of Texas 

Dario Bargas 

Bargas Law Firm 

1000 Heritage Center Circle 

Round Rock, Texas 78664 

Counsel for Appellant 

/s/ Jeffrey R. Akins 

Jeffrey R. Akins 

8 
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN 

ON MOTION FOR REHEARING 

NO. 03-12-00247-CV 

Roland Oil Company, Appellant 

Railroad Commission of Texas, Appellee 

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT 

NO. D-1-GN-08-003472, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING 

MEMORANDUM OPINION 

We grant the motion for rehearing filed by the Railroad Commission, withdraw 

our opinion and judgment dated August 29, 2014, and substitute the following in their place. We 

dismiss as moot the Commission's motion for en bane reconsideration. 

This is an administrative appeal from a 2008 Railroad Commission final order 

cancelling an extension of time to plug inactive wells operated by appellant Roland Oil Company. 

The principal basis for the Commission's order was that Roland lacked a good-faith claim to 

operate the oil and gas lease on which the subject wells were located. The district court affirmed the 

Commission's order, and we will affirm that judgment. 
Background 

Since 1994, Roland has been the operator under the North Charlotte Field Unit Lease 

in Atascosa County, Texas.' The Lease, identified by the Commission as Lease No. 03220, consists 

of 31 wells that had been drilled as early as the 1950s, some of which are inactive. Commission 

Rule 14 requires that "dry or inactive well[s]" be plugged either within one year after drilling 

operations cease or, in the case of "delinquent inactive wells," "immediately unless the well is 

restored to active operation."' Former Commission Rule 14 also required that an inactive well more 

than twenty-five years old that had been inactive more than one year be tested to ensure that it posed 

no potential threat to natural resources before it is plugged.' The tests used to satisfy this rule, which 

are called "H-15" and "H-5" in reference to the form submitted to the Commission to report the 

results, examine fluid level and mechanical integrity of production wells (H-15) and the pressure 

In this context, "unit" or "unitization," simply described, refers to the consolidation or 

merger of the interests in multiple producing leases or wells located in a single formation of oil or 

gas. A primary legal consequence is that production and operation anywhere on the unit is treated 

as if they have taken place in all of the underlying leases within the unit. See Southeastern Pipe Line 

Co. v. Tichacek, 997 S.W.2d 166, 170 (Tex. 1999). 

2See 16 Tex. Admin. Code § 3.14(b)(2) (2008) (Railroad Commission, Plugging) (cited 

hereinafter as "Former 16 Tex. Admin. Code § 3.14"). We cite to the version of Rule 14 in effect 

during the underlying contested-case hearing, but note that the intervening amendments to the rule 

did not affect provisions at issue here. See 29 Tex. Reg. 8271 (2004), proposed 29 Tex. Reg. 5994, 

6003-04 (2004), amended by 32 Tex. Reg. 287 (2007), proposed 31 Tex. Reg. 9175, 9176 (2006). 

The current version of this rule was promulgated in 2012, see 37 Tex. Reg. 4892 (2012), proposed 

37 Tex. Reg. 2287, 2288-89 (2012), but some version of Commission Rule 14 has been in effect 

since 1967, see Tex. R.R. Comm' n, Rule 051.02.02.014 (1967), adopted by Docket No. 20-65-5518. 

See Former 16 Tex. Admin. Code § 3.14(b)(2)—(3). 

2 
within injection wells (H-5).4Failure to comply with these requirements, among others, can result 

in Commission action preventing an operator from producing under a lease. 

In early 2005, Roland asked the Commission for an extension of time to complete the 

required testing on certain inactive wells on the Lease. Upon inspecting the Lease and reviewing its 

history, the Commission determined that Roland had been delinquent on the required testing since 

1994 and found additional violations. As a consequence, the Commission denied Roland's extension 

request and issued a February 2005 "severance" order effectively barring Roland from producing 

from any well on the Lease. Roland ceased production as of May 2005, and would not resume 

until August 2006—an interruption of approximately fifteen consecutive months—after Roland 

completed certain repairs necessary for the testing and the required testing itself to the Commission's 

satisfaction, and the agency lifted its severance order. 

Meanwhile, in June 2006, a mineral owner under the Lease had alerted the 

Commission to his contention that the Lease had lapsed during the period of non-production. This 

contention potentially implicated Roland's entitlement to an extension of time from the Commission 

to complete the required testing and plugging measures on the inactive wells (and, in turn, Roland's 

ability to avoid the consequences of noncompliance), as the Commission's rules allowed the agency 

to grant such an extension only if, among other requirements, the "operator has, and upon request 

provides evidence of, a good faith claim to a continuing right to operate the well.' A "good faith 

See id. § 3.14(b)(2)(A)(iv). 

5Id. § 3.14(b)(2)(A)(iii) (unbonded operators), (B)(ii) (bonded operators); see Magnolia 

Petroleum Co. v. Railroad Comm'n, 170 S.W.2d 189, 190-91 (Tex. 1943). (recognizing need for 

permit applicant to make "a reasonably satisfactory showing of a good-faith claim of ownership" in 

the property to Commission). 

3 
claim" in this context is "a factually supported claim based on a recognized legal theory to a 

continuing possessory right in a mineral estate, such as evidence of a currently valid oil and gas lease 

or a recorded deed conveying a fee interest in the mineral estate."6 

Commission staff notified Roland of the mineral owner's assertion and asked Roland 

to provide evidence of its good-faith claim to operate the North Charlotte Field Unit Lease, adding 

that failure to do so would result in cancellation of Roland's plugging extension, which in turn 

would require immediate plugging of the Lease's inactive wells.' In response, Roland asserted 

(and the Commission does not dispute) that the relevant instrument in this regard is a 1962 

"Unit Agreement' whose term is "for the time that [oil and gas] are produced in paying quantities 

and as long thereafter as Unit Operations' are conducted without a cessation of more than ninety 

(90) consecutive days." Although Roland did not dispute that production had ceased during the time 

6Former 16 Tex. Admin. Code § 3.14(a)(1)(E). It should be emphasized that the 

Commission's determination regarding the good-faith-claim requirement bears upon its authority 

to grant oil and gas permits under the conservation laws, but does not determine or affirmatively 

create title or a right of possession in the property itself. See Magnolia, 170 S.W.2d at 190-91. 

Likewise, our decision here addresses only the correctness of the Commission's actions, not any 

underlying property rights. 

See Former 16 Tex. Admin. Code § 3.14(b)(2)(A)(iii) (allowing Commission to grant an 

extension of the deadline for plugging if, among other requirements, the operator submits "a 

statement that the operator has, and on request will provide, evidence of a good-faith claim to a 

continuing right to operate the well"). 

8There were actually two unit agreements, one signed by the working interest owners, the 

other by the royalty interest owners, but the parties agree that the material terms of each instrument 

are identical. 

9As will be discussed in more detail below, the agreement defines "Unit Operations" as "all 

operations conducted . . pursuant to this agreement . . . for or on account of the development and 

operation of the [underlying formation] for the production of [oil and gas]." 

4 
period the Commission's severance order was in effect, Roland denied that the Unit Agreement had 

lapsed, urging that the Commission's severance order had triggered the agreement's force majeure 

clause and suspended its obligation to conduct "Unit Operations" and, in the alternative, arguing that 

its repair and testing activities constituted "Unit Operations." 

For reasons that are not specifically expressed in the record, but presumably based 

on the conclusion that Roland did not have a good-faith claim to operate the Lease, the Commission 

staff rejected Roland's arguments and recommended that the plugging extensions be cancelled. In 

response, Roland sought and was granted a contested-case hearing on the issue." At the conclusion 

of the contested-case hearing, the hearing examiner issued a proposal for decision recommending 

that the Commission conclude Roland lacked a good-faith claim to operate the Lease and that the 

plugging extensions be cancelled. Specifically, the hearing examiner concluded that because Roland 

had not produced any oil or gas or conducted Unit Operations for more than 90 days between 

May 2005 and August 2006, Roland lacked a good-faith claim to operate the Lease. Ultimately, the 

Commission issued a final order adopting the hearing examiner's findings of fact and conclusions 

of law and cancelling the extensions. 

After exhausting its remaining remedies before the Commission, Roland filed a 

suit for judicial review of the Commission's final order in Travis County District Court. The 

district court affirmed the Commission's final order. Roland appeals that judgment. 

10See Former 16 Tex. Admin. Code § 3.14(b)(2)(C)(ii) ("If the Commissioner or its delegate 

declines to grant or continue a plugging extension or revokes a previously granted extension, the 

operator shall either return the well to active operation or, within 30 days, plug the well or request 

a hearing on the matter."). 

5 
Analysis 

Roland brings two issues on appeal, both of which ultimately challenge the 

Commission's construction of the Unit Agreement and its resulting conclusion that Roland had not 

demonstrated a good-faith claim to operate the North Charlotte Field Unit lease. First, Roland 

argues that under the plain language of the Unit Agreement, the Commission's February 22, 2006 

severance order was "an order of a governmental body" that excused the period of non-production 

under the agreement's force majeure provision. Second, Roland contends that the plain language 

of the Unit Agreement provides that the testing and repairs Roland undertook during the cessation 

of production constitute "Unit Operations" that served to continue the term of the agreement. 

Standard of review 

The parties agree that our review of the Commission's final order is governed by 

the "substantial evidence" standard codified in the Administrative Procedure Act." This standard 

requires that we reverse or remand a case for further proceedings "if substantial rights of the 

appellant have been prejudiced because the administrative findings, inferences, conclusions, or 

decisions" are: 

(A) in violation of a constitutional or statutory provision; 

(B) in excess of the agency's statutory authority; 

(C) made through unlawful procedure; 

(D) affected by other error of law; 

(E) not reasonably supported by substantial evidence considering the reliable and 

probative evidence in the record as a whole; or 

" See Tex. Gov't Code § 2001.174 (codifying "substantial evidence" standard); Railroad 

Comm'n v. Torch Operating Co., 912 S.W.2d 790, 792 (Tex. 1995) (applying APA substantial 

evidence standard to Commission decision under Texas Natural Resources Code). 

6 
(F) arbitrary or capricious or characterized by abuse of discretion or clearly 

unwarranted exercise of discretion." 

In reviewing fact-based determinations under this standard, we simply ask whether, considering "the 

reliable and probative evidence in the record as a whole," some reasonable basis exists in the record 

for the agency's action.' We apply this analysis without deference to the district court's judgment!' 

We presume that the agency's findings, inferences, conclusions, and decisions are supported by 

substantial evidence, and the burden is on the contestant to demonstrate otherwise.' 

To the extent that the issues presented here turn on the construction of the 

Unit Agreement, the interpretation of an unambiguous contract is a question of law that we review 

de novo!' As such, we are not bound by the Commission's interpretation of an unambiguous 

12Tex. Gov't Code §2001.174(2). 

" See id. § 2001.174(2)(E); Texas Indus. Energy Consumers v. CenterPoint Energy Houston 

Elec., LLC, 324 S.W.3d 95, 105 (Tex. 2010) (citing Mireles v. Texas Dep 't of Pub. Safety, 9 S.W.3d 

128, 131 (Tex. 1999) ("A court applying the substantial evidence standard of review may not 

substitute its judgment for that of the agency. The issue for the reviewing court is not whether the 

agency's decision was correct, but only whether the record demonstrates some reasonable basis for 

the agency's action. Courts must affirm administrative findings in contested cases if there is more 

than a scintilla of evidence to support them.") (citations omitted)); Public Util. Comm 'n v. Gulf 

States Utils. Co., 809 S.W.2d 201, 210-11 (Tex. 1991); Texas Health Facilities Comm 71 v. Charter 

Med.–Dallas, Inc., 665 S.W.2d 446, 452-53 (Tex. 1984). 

" See Texas Dept of Pub. Safety v. Alford, 209 S.W.3d 101, 103 (Tex. 2006) (per curiam). 

15See Slay v. Texas Comm 'n on Envtl. Quality, 351 S.W.3d 532, 549 (Tex. App.—Austin 

2011, pet. denied). 

16See, e.g., Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (if contract is unambiguous, 

court will construe contract as question of law). 
contract.' When construing a written contract, we "ascertain the intent of the parties as expressed 

in the instrument,' giving the language in the agreement "its plain, ordinary, and generally accepted 

meaning, unless doing so "would defeat the parties' intent.' If a contract is ambiguous, its 

interpretation is a matter for the fact finder." Such findings of fact would be reviewed in the same 

manner as other agency fact findings, that is for support by substantial evidence.' 

Commission's decision 

The Commission's decision to deny Roland's plugging extension for failure 

to demonstrate "a good faith claim to a continuing right to operate" the Lease was based principally 

on its underlying findings of fact that (1) Roland produced no hydrocarbons from the Unit 

and conducted no Unit Operations on the Unit from May 2005 through July 2006 (a period of 

15 consecutive months), and (2) the Unit Agreement provides that it terminates if there is a cessation 

in the production of hydrocarbons or Unit Operations of more than 90 days. In reaching its ultimate 

conclusion, the Commission also necessarily rejected Roland's argument that the Unit Agreement's 

force majeure provision excused the gap in hydrocarbon production. That rejection was based on 

the Commission's legal conclusion that force majeure provisions apply only when the force majeure 

event relied on is beyond the reasonable control of the operator and, in turn, on its related finding 

17See Texas Workers' Comp. Ins. Facility v. State Bd. of Ins., 894 S.W.2d 49, 52 

(Tex. App.—Austin 1995, no writ). 

" See Coker, 650 S.W.2d at 393. 

" See DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999). 

" See Coker, 650 S.W.2d at 394. 

21See Tex. Gov't Code § 2001.174; Charter Med.—Dallas, 665 S.W.2d at 452-53. 

8 
of fact that the Commission issued the severance order in this case due to long-overdue testing 

on six inactive wells, but that it had been within the reasonable control of Roland to stay current on 

that regulatorily-required testing. The Commission also necessarily rejected Roland's argument 

that the repairs and testing it performed on the Lease's inactive wells during the gap in production 

constituted Unit Operations such that there was no cessation in those operations to trigger 

termination of the Unit Agreement. The Commission, concluding that "operations" requires work 

directed at actually producing oil or gas, found that the work Roland performed on inactive wells 

during the 15-month gap did not contribute to the production of hydrocarbons. 

Force majeure 

In its first issue, Roland challenges the Commission's general legal conclusion 

that force majeure provisions apply only where the force majeure event being relied upon is 

beyond the reasonable control of the party invoking the provision. Roland counters that, despite the 

Commission's apparent conclusion to the contrary, there is no general rule regarding the applicability 

of force majeure clauses; instead, their scope and application, like every contract provision, depend 

on the specific language used in the contract.' The language used in the Unit agreement, Roland 

urges, provides that its obligations are excused if a "rule, regulation, or order of a governmental 

agency" prevents compliance. Thus, Roland concludes, because there is no question that the 

zz Roland cites to Sun Operating Ltd. P 'ship v. Holt, 984 S.W.2d 277, 282-83 

(Tex. App. Amarillo 1998, pet. denied) ("Force majeure[] is now little more than a descriptive 

phrase without much inherent substance. Indeed, its scope and application, for the most part, is 

utterly dependent upon the terms of the contract in which it appears.") and Hydrocarbon Mgmt., Inc. 

v. Tracker Exploration, Inc., 861 S.W.2d 427, 436 (Tex. App.—Amarillo 1993, no writ) ("We note 

initially that the lease terms are controlling regarding force majeure, and common law rules merely 

fill in gaps left by the lease.") to support this assertion. 

9 
Commission's 2005 order of severance was an "order of a governmental agency" that required 

Roland to stop production, the cessation in production that might otherwise serve to default the lease 

was excused. In sum, Roland contends that the Commission abused its discretion by improperly 

construing and interpreting the force majeure provision of the Unit agreement.' 

Although we agree with Roland that the scope and effect of a force majeure clause 

depend ultimately on the specific language used in the contract and not on any traditional definition 

of the term,' the specific language of the Unit Agreement's force majeure provision incorporates 

the common-law force majeure requirement that performance become impossible or impracticable 

as a result of an event or effect that the parties could not have anticipated or controlled:25 

FORCE MAJEURE 

16.1 Force Majeure. All obligations imposed by this agreement on each party, 

except for the payment of money, shall be suspended while compliance is prevented, 

in whole or in part, by a strike, fire, war, civil disturbance, act of god; by federal, 

state, or municipal laws; by any rule, regulation, or order of a governmental agency; 

by inability to secure materials; or by any other cause or causes beyond reasonable 

23See Tex. Gov't Code § 2001.174(F) (requiring reviewing court to reverse agency decision 

that is "arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise 

of discretion"). 

24 See Virginia Power Energy Mktg., Inc. v. Apache Corp., 297 S.W.3d 397, 402 

(Tex. App.—Houston [14th Dist.] 2009, pet. denied) (citing Zurich Am. Ins. Co. v. Hunt Petroleum 

(AEC), Inc., 157 S.W.3d 462, 466 (Tex. App.—Houston [14th Dist.] 2004, no pet.); Perlman 

v. Pioneer Ltd. P'ship, 918 F.2d 1244, 1248 n. 5 (5th Cir. 1990)). 

" See Black's Law Dictionary 761 (10th ed. 2014) (defining "force majeure" and "force 

majeure clause"); 30 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts 

§ 77:31 (4th ed. 1990 & Supp. 2004) (specific language of clause indicates what events will excuse 

performance and typical clause states that party's performance is subject to "acts of God, war, 

government regulation, terrorism, disaster, strikes . . . civil disorder, curtailment of transportation 

facilities, or any other emergency beyond the parties' control"). 

10 
control of the party. No party shall be required against its will to adjust or settle any 

labor dispute. Neither this agreement nor any lease or other instrument subject hereto 

shall be terminated by reason of suspension of Unit Operations due to any one or 

more of the causes set forth in this Article. 

(Emphasis added.) Not only does this provision use the phrase "force majeure" twice in identifying 

and describing itself, it also incorporates the force majeure concept that the event be beyond control 

by giving a list of specific events and then including "other" of those type events that are "beyond 

reasonable control of the party." 

Considering the Unit Agreement as a whole and taking its words in context, we 

conclude that the force majeure clause at issue here is subject to only one reasonable interpretation, 

which is that any potential triggering event of the clause must be beyond the control of theart p y.26 

hi so concluding, we rely on the language used in the clause itself—specifically, the adjective 

"other" modifying "causes or causes beyond the control of the party." In this context, "other" means 

"additional" or "remaining" of a group or type not already mentioned.' As such, the phrase "other 

cause or causes beyond the control of the party" indicates the last of a group of like or similar things, 

with the similarity or commonality being events that are beyond a person's control. That "group" 

of like or similar things that are beyond a person's ability to control consists of the traditional force 

majeure events specifically described in the clause: "strike, fire, war, civil disturbance, act of god"; 

26 See Coker, 650 S.W.2d at 394 (noting among other contract-interpretation considerations 

that we examine entire writing and an ambiguity does not exist unless the meaning is "uncertain and 

doubtful or it is reasonably susceptible to more than one meaning." (emphasis added)). 

27 See Webster's Third New Int'l Dictionary 1598 (2002) (defining "other" as including 

"remaining," "more," and "additional"). 
"federal, state, or municipal laws"; "any rule, regulation, or order of a governmental agency"; and 

"inability to secure materials?"' 

Roland disagrees, arguing that each of the specific list of events in this clause 

stand alone and is not modified or described by the phrase "by any other cause or causes beyond 

the reasonable control of the party." Thus, it maintains, "any rule, regulation, or order of a 

governmental agency," is a force majeure event regardless of the underlying circumstances. But 

this is not a reasonable construction of the Unit Agreement's force majeure provision." Under 

Roland's interpretation, a fire that was directly controlled or caused by Roland would trigger 

the Unit Agreement's force majeure clause. Likewise, any inability to secure materials, including 

Roland's refusal to ay for materials, would trigger this clause. Further, and more directly relevant . 

here, Roland's failure to obtain any State license could conceivably be offered as a force majeure 

event under Roland's interpretation regardless of the reason for the failure. 

28 See State v. Fidelity & Deposit Co. of Md., 223 S.W.3d 309, 311-12 (Tex. 2007) 

(determining "other necessary structure related to a public road" in statute defining "highway" to 

include "public road or part of a public road or bridge, culvert, or other necessary structure related 

to a public road," did not include TxDOT research and technology center because that phrase directly 

related to preceding "bridge" and "culvert" and thus, "likewise pertains to the physical function 

of the road, such as a guard rail"); Toungate v. Bastrop Indep. Sch. Dist., 842 S.W.2d 823, 828 

(Tex. App.—Austin 1992, no writ) (holding that "any other order" in statute restricted meaning to 

same class of orders described in provision). 

" See, e.g., Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987) (noting that 

courts should "avoid when possible and proper a construction which is unreasonable"); Coker, 

650 S.W.2d at 393 (noting that "contract is ambiguous when its meaning is uncertain and doubtful 

or it is reasonably susceptible to more than one meaning"). 

12 
Finally, as suggested above, Roland's interpretation would require ignoring the 

existence of "other" in this provision." If the drafters of the agreement intended to excuse 

the specific events listed without regard to control, as Roland urges, but also excuse any event that 

was beyond the reasonable control of the party, then it was unnecessary to include the word 

"other"—e.g., All obligations shall be suspended while compliance is prevented by a strike, fire, war, 

civil disturbance, act of god; by any rule, regulation, or order of a governmental agency; or by any 

cause or causes beyond reasonable control of the party. By including "other," the drafters expressed, 

we conclude, a clear intent that the force majeure cause or causes relied on be beyond the reasonable 

control of the party.' Accordingly, although the Commission's declaration regarding the scope of 

force majeure clauses may go too far, its ultimate decision that the Unit Agreement's force majeure 

clause was not triggered by the Commission's order of severance because it was within the 

reasonable control of Roland was correct on the record here, and we will not reverse a right decision 

even in the face of a wrong legal explanation.' We overrule Roland's first issue. 

3°See Sargent v. Highlite Broad. Co., 466 S.W.2d 866, 868 (Tex. Civ. App.—Austin 1971, 

no writ) ("`The terms of a contract must, if possible, be construed to mean something rather 

than nothing at all.'" (quoting Portland Gasoline Co. v. Superior Mktg. Co., 243 S.W.2d 823, 824 

(Tex. 1951), overruled on other grounds, Northern Natural Gas Co. v. Conoco, Inc., 986 S.W.2d 

603, 608 (Tex. I998))). 

31See, e.g., Sun Operating, 984 S.W.2d at 288 ("Mil listing circumstances beyond the 

lessee's control last, the parties intended that the "cause[s], occurrence[s] or circumstance[s]" 

enumerated before it be outside the lessee's reasonable control before they could serve as force 

majeure."); Atkinson Gas Co. v. Albrecht, 878 S.W.2d 236, 241 (Tex. App.—Corpus Christi 1994, 

writ denied) (refusing to apply force majeure clause where Commission order well shut because 

lessee's failure to comply with regulations was within lessee's reasonable control). 

32See ICON Benefit Adrn'rs H, L.P. v. Abbott, 409 S.W.3d 897, 903-04 (Tex. App.—Austin 

2013, pet. denied) (citing Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 

13 
"Unit operations" 

In its second issue, Roland challenges the Commission's legal conclusion that 

"operations" means "actual work done in a good faith endeavor to cause a well to produce oil and/or 

gas in paying quantities" Specifically, Roland asserts that under a proper interpretation of the 

Unit Agreement, the work or operations that Roland performed on the Lease's inactive wells during 

the gap in production constitute "Unit Operations" that extended the term of the Lease, despite the 

gap in hydrocarbon production. In making this argument, Roland relies on two provisions of the 

Unit Agreement, the first of which specifies the duration of the agreement: 

18.1 Term. The term of this agreement shall be for the time that Unitized 

Substances" are produced in paying quantities and as long thereafter as Unit 

Operations are conducted without a cessation of more than ninety (90) consecutive 

days, unless sooner terminated by Working Interest Owners in the manner herein 

provided. 

(Emphasis added.) Focusing on the above-emphasized language, Roland contends that the term of 

the Unit Agreement is perpetuated not only by the production of oil and gas in paying quantities, but 

also by the continuation of "Unit Operations," which the agreement defines as follows: 

1.15 Unit Operations means all operations conducted by Working Interest Owners 

or Unit Operator pursuant to this agreement and the Unit Operating Agreement for 

442 (Tex. App.—Austin 2009, no pet.)) (noting that a trial court does not abuse its discretion if it 

reaches the right result for the wrong reason). 

" The agreement defines "Unitized Substances" as "oil, gas, gaseous substances, sulphur 

contained in gas, condensate, distillate, and all associated and constituent liquid or liquefiable 

hydrocarbons." 

14 
or on account of the development and operation of the Unitized Formation' for the 

production of Unitized Substances. 

During the gap in hydrocarbon production at issue here, Roland maintains, it conducted these 

"Unit Operations" by performing repairs and testing on the Lease's inactive wells as required by 

Commission Rule 3.14. Those repairs and tests are "Unit Operations," Roland contends, because 

they were, quite simply, "operations conducted by . . . the Unit Operator" pursuant to the 

agreement—i.e., the general work, including repairs and testing, that are performed to maintain the 

Lease. Therefore, Roland concludes, the term of the Lease continued under provision 18.1 because 

"Unit Operations [were] conducted without a cessation of more than 90 days." 

But Roland's proffered interpretation of "Unit Operations" is incomplete. Although 

broadly referring to "all operations conducted" by a working-interest owner or operator, the 

agreement's definition also requires that the operations be conducted "for or on account of the 

development and operation of the Unitized Formation for the production of Unitized Substances." 

In other words, the plain language of the agreement limits the scope of "Unit Operations" to those 

activities that are taken in connection with producing oil and gas. This limitation, or narrowing of 

the common meaning of"operations," is consistent with the specialized meaning of"operat ons" that 

has developed in oil and gas law, which is those activities conducted in a good faith effort to achieve 

production.' Thus, for Roland's repairs and testing to be considered "Unit Operations" under the 

34 Stated generally, the agreement defines "Unified Formation" as the specific geological 

formation located under the Unit from which oil, gas, etc. is drawn. 

as See, e.g., Ramsey v. Grizzle, 313 S.W.3d 498, 510 (Tex. App.—Texarkana 2010, no pet.) 

("Actual physical work being done on equipment in a good faith effort to place it in working 

order to produce oil constitutes sufficient operations to maintain the lease."); Hydrocarbon Mgmt., 

15 
agreement, they must have been activities conducted in an effort to produce oil or gas. This closely 

matches the Commission's conclusion that "operations means actual work being done in a good faith 

endeavor to cause a well to produce oil and/or gas in paying quantities" and, as such, comports with 

both the Unit Agreement's definition of "Unit Operations"36as wells as the technical or specialized 

meaning that "operations" has acquired in the oil and gas context.' Accordingly, the Commission's 

legal conclusion regarding the meaning of "operations" was not in error.' 

In addition to challenging the Commission's interpretation of "operations," Roland 

suggests that the Commission's related underlying findings of fact, expressed as follows, are not 

supported by substantial evidence: 

The relevant lease operations that Roland engaged in during the severance period 

between May, 2005 and August, 2006, were confined to those acts necessary to 

861 S.W.2d at 438 (noting that "the intention of the parties was for the lessees to do something that 

would bring about the exploration and production of oil and gas" and that "lessee should not be 

allowed to maintain a lease without conducting activities that would cause the well to produce"); Cox 

v. Stowers, 786 S.W.2d 102, 105 (Tex. App.—Amarillo 1990, no writ) (concluding that term 

"reworking operations" means "good faith effort[s] to cause a well or wells to produce oil or gas in 

paying quantities"); Lab Oil Co. v. Bentz, 380 S.W.2d 846, 847 (Tex. Civ. App.—Corpus Christi 

1964, no writ) ("The meaning of the word 'operations' in drafting the lease, unquestionably denoted 

to the parties the meaning of doing those things that would continue the quest for production.") 

36 See Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 823 (Tex. 1997) ("[W]hen 

terms are defined in a[ contract], those definitions control."). 

" See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005) (noting 

acceptability of applying technical meaning to contract terms where appropriate (citing Heritage 

Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996) (applying "well accepted meanings in 

oil and gas industry" to terms "royalty" and "market value at the well")). 

See Tex. Gov't Code § 2001.174; Buddy Gregg Motor Homes, Inc. v. Motor Vehicle Bd., 

156 S.W.3d 91, 98-99 (Tex. App.—Austin 2004, pet. denied) (noting that we review agency legal 

conclusions for errors of law). 

16 
pass Commission required H-15 and H-5 testing. The wells were inactive before the 

testing and inactive after the testing. They did not contribute to the development of 

the unitized formation for the production of oil and/or gas. 

We disagree. 

The bulk of the "operations" evidence in the record relates to the work Roland 

performed in connection with efforts to comply with former Commission Rule 3.14, specifically 

the repairs and testing on the Lease's inactive wells in preparation for their being plugged. This 

evidence included specific information regarding the type of work or tests done, the inactive wells 

on which the work or tests were done, and when the work or tests were performed. While there is 

some evidence in the record of other work that Roland performed on the Lease—i.e., "constant" 

maintenance-oriented work, including flow-line repair, electrical repairs, pump repairs, monitoring 

for leaks, mowing the grass, and road inspections—that evidence does not specify when this work 

was done, how often it was done, or whether it was performed on any of the Lease's active wells. 

Regardless, under the applicable substantial-evidence standard of review, we ask only whether some 

reasonable basis exists in the record for the agency's action." That standard was met here. 

Roland, challenging the Commission's specific finding that its work during the gap 

did not contribute to the production of oil and gas, questions why it would bother to spend time and 

money conducting repairs and testing on inactive wells if not to eventually produce oil and gas. But 

for purposes of our review, the evidence in the record shows that the work in question was performed 

on inactive wells to comply with former Commission Rule 3.14, that it was done in preparation for 

" See Charter Med., 665 S.W.2d at 453 (noting that test is whether some reasonable basis 

exists in the record for agency's action (citing Gerst v. Nixon, 411 S.W.2d 350, 354 (Tex. 1966)). 

17 
plugging those inactive wells, and that those wells remained inactive after the required testing. 

Inactive wells do not produce oil or gas;" moreover, inactive wells slated to be plugged do not and 

will not produce oil or gas:" Accordingly, it was reasonable for the Commission to conclude that 

Roland's work did not actually contribute to the production of oil and gas, and thus did not constitute 

good-faith endeavors to produce oil and gas.' 

We overrule Roland's second issue. 

CONCLUSION 

Having overruled Roland's issues, we affirm the district court's judgment affirming 

the Commission's order. 

Jeff Rose, Chief Justice 

Before Chief Justice Rose, Justices Puryear and Field 

Affirmed on Motion for Rehearing 

Filed: February 27, 2015 

" See, e.g., Tex. Nat. Res. Code § 89.002(12) (defining "inactive well" as "unplugged well 

that has had no reported production . . . for a period of greater than 12 months"). 

41 See, e.g., R.D. Oil Co. v. Railroad Comm'n, 849 S.W.2d 871, 872 (Tex. App.—Austin 

1993, no writ) (describing plugging as pouring cement into the well casing); Railroad Comm'n, 

Well Plugging Primer 6-7 (200), available at http://wwwirc. state.tx.usimedia/6358/plugprimer 1 .pdf 

(showing that operator plugs a well by pumping cement down it and, if done properly, seals the well, 

preventing water and other substances from leaking into it and gas or oil from leaking out). 

42See Texas Indus. Energy, 324 S.W.3d at 105; Gulf States Util., 809 S.W.2d at 211. 

18