Source: http://hankinsonlaw.com/subject-matter/oil-gasreal-estate/
Timestamp: 2019-04-25 09:52:49+00:00

Document:
In a precedent-setting case, Deborah Hankinson, Stephanie Nelson, and Brett Kutnick successfully defended Anadarko E&P Onshore against Lightning Oil Company’s claims for subsurface trespass and tortious interference with contract.
The Texas Supreme Court unanimously ruled that Anadarko did not commit an actionable trespass by drilling, with permission of the surface estate owner, through Lightning’s mineral estate.
“The prevalence of off-site drilling in Texas makes this one of the Court’s most significant oil-and-gas opinions in recent years,” notes Ms. Hankinson.
The court also held that Lightning had failed to demonstrate that Anadarko’s off-site drilling would interfere with Lightning’s development of its own mineral estate.
Brett Kutnick, Deborah Hankinson, Jennifer Rangel Stagen, and Stephanie Dooley Nelson successfully represented Eagle Oil & Gas Company (“Eagle Oil”) in the trial court in a second lawsuit filed by TRO-X, L.P. concerning oil and gas interests in the Permian Basin. Following extensive briefing and a hearing, the trial court granted Eagle Oil’s motion for summary judgment on grounds of res judicata, collateral estoppel, the statute of limitations, and waiver, and denied TRO-X’s cross-motion for summary judgment. After a later evidentiary hearing on Eagle Oil’s request for attorney’s fees under the Declaratory Judgments Act, the trial court rendered final judgment that TRO X take nothing on its claims and awarded Eagle Oil attorney’s fees incurred in the trial court in the amount of $175,819.50, plus up to $261,000 in conditional appellate attorney’s fees for representation in the court of appeals and Texas Supreme Court. The case is currently on appeal in the Dallas Court of Appeals. TRO-X, L.P. v. Eagle Oil & Gas Co., No. DC-16-01439, in the 116th Judicial District Court of Dallas County, Texas.
In a highly watched case regarding the duties owed by former property owners, Deborah Hankinson, Brett Kutnick, Rick Thompson, and Jennifer Stagen successfully represented Occidental Chemical Corporation and persuaded the Texas Supreme Court to reverse a $9.6 million negligence judgment awarded to a worker who was partially blinded by acid at a chemical plant years after Occidental’s sale of the plant. Specifically, the Supreme Court addressed whether a property owner who allegedly creates a dangerous condition owes a duty in premises liability to warn of the dangerous condition or to make it safe and a duty in negligence to use reasonable care not to create the dangerous condition in the first place. In answering that question in the negative, the Court rejected the notion that a property owner acts as both owner and independent contractor when improving its own property, subjecting itself to either premises-liability or ordinary-negligence principles depending on the injured party’s pleadings. Instead, the Court held that premises-liability principles apply to a property owner who creates a dangerous condition on its property, and that the claim of a person injured by the condition remains a premises-liability claim as to the owner-creator, regardless of how the injured party chooses to plead it. Because Occidental sold the property eight years before the plaintiff’s accident, the Supreme Court held that Occidental owed no duty of care as that duty had passed to its vendee. The Court therefore reversed the court of appeals’ judgment and rendered judgment that the plaintiff take nothing. See Occidental Chemical Corp. v. Jenkins, No. 13-0961, 2016 WL 82662 (Tex. Jan. 8, 2016).
Deborah Hankinson, Brett Kutnick, and Jennifer Rangel Stagen successfully represented Eagle Oil & Gas Company (“Eagle Oil”) in an appeal of a judgment after a jury trial awarding the plaintiff, TRO-X, L.P., over $8.2 million in damages and attorney’s fees, based on alleged breaches of a contract to acquire and dispose of oil and gas leases and interests. Following oral argument, the Court of Appeals for the Eleventh District of Texas in Eastland held that (1) Eagle Oil could not, as a matter of law, deprive TRO-X of its right to retain an unpromoted working interest by selling to Eagle Oil & Gas Partners, LLC on a promoted basis without consultation with TRO-X, (2) the evidence conclusively establishes that Eagle Oil did not deprive TRO-X of its right to retain an unpromoted working interest, (3) Eagle Oil did not breach the agreement by sending a letter to TRO-X, and (4) Eagle Oil could not, as a matter of law, deprive TRO-X from acquiring its proportionate share of an overriding royalty interest and working interest back-in, and the evidence conclusively establishes that Eagle Oil did not deprive TRO-X of the interests. The court thus reversed and rendered judgment that the plaintiff take nothing on its multi-million dollar breach-of-contract claims against Eagle and instead rendered judgment that the plaintiff recover $379,788.80 under a court-ordered accounting. The court further affirmed the take-nothing judgment rendered in favor of the firm’s other client, Eagle Oil & Gas Partners, LLC, on the plaintiff’s tortious interference claim. Eagle Oil & Gas Co. v. TRO-X, L.P., 416 S.W.3d 137 (Tex. App.—Eastland 2013, pet. denied). TRO-X then filed a petition for review in the Supreme Court of Texas. The Court declined to grant TRO-X’s petition, however, and left the court of appeals’s judgment intact.
Deborah Hankinson presented “Do You Want to Arbitrate? Managing the Process When You Do” at the Oil & Gas Disputes Course (Negotiation, Arbitration and Litigation) sponsored by the State Bar of Texas and Texas Tech University School of Law on January 9, 2015, in Houston, Texas.
In this large oil-and-gas dispute, Plaintiff Community Bank of Raymore asserted that the drilling rights of Defendants Chesapeake Exploration, L.L.C. and Anadarko Petroleum Corporation terminated as to certain deep depths. Plaintiff had two theories: (1) that a horizontal-termination clause had terminated Defendants’ deep-depth drilling rights at the expiration of the lease’s primary term; and (2) that a severance clause was triggered, effecting a partial termination of deep-depth drilling rights as to areas of the lease in which Defendants had already achieved production at the expiration of the primary term. Defendants on appeal–represented by Hankinson LLP–argued that neither partial-termination clause had been triggered because the lease continues to be held in full force, past the expiration of the primary term, by the lease’s continuous-development operations. After briefing and oral argument, the El Paso Court of Appeals sided with Defendants and affirmed the trial court’s judgment that Plaintiff take nothing on its claims. Community Bank of Raymore v. Chesapeake Exploration, L.L.C. & Anadarko Petroleum Corp., No. 08-12-00025-CV (Tex. App.–El Paso Nov. 6, 2013).
Deborah Hankinson, Brett Kutnick, and Jennifer Stagen represented Occidental Petroleum Corporation and several of its subsidiaries in moving to vacate an arbitration award regarding the interpretation of a purchase and sales agreement. After extensive briefing and argument, the trial court vacated the arbitration award for evident partiality by one of the neutral arbitrators. The First District Court of Appeals in Houston subsequently affirmed the vacatur of the arbitration award, and after requesting full briefs on the merits, the Texas Supreme Court denied the petitioners’ petition for review and motion for rehearing. Amoco D.T. Co. v. Occidental Petroleum Corp., 343 S.W.3d 837 (Tex. App.–Houston [1st Dist.] 2011, pet. denied).
In a highly complex title dispute between Texas oil-and-gas operators, the plaintiffs claimed superior title to a mineral lease on a 169.1-acre tract in Concho County, Texas. After the jury found that the plaintiffs had superior title, the trial court ordered the defendants—who possessed and had drilled a producing well on the tract—to turn over possession of the property, drilling equipment, and almost $1 million being held in suspense pending adjudication of the case. Hankinson LLP attorney Deborah Hankinson represented the defendants on appeal. The Austin Court of Appeals reversed the trial-court judgment, rendered judgment that the plaintiffs take nothing, and also rendered judgment that title and possession of the mineral estate, equipment, and funds belonged to the defendants. The plaintiffs appealed to the Texas Supreme Court, which denied review after requesting full briefing on the merits. McCammon v. Ischy, No. 03-06-00707-CV, 2010 WL 1930149 (Tex. App.—Austin May 12, 2010, pet. denied).
In Occidental Permian Ltd. v. Helen Jones Foundation, et al., a group of Texas royalty owners alleged that OPL, an oil and gas producer, had underpaid royalties for casinghead gas produced during carbon dioxide-injection tertiary recovery operations in West Texas. Hankinson LLP was hired to assist OPL during trial, post-trial, and appellate proceedings. After the jury reached a multi-million dollar verdict for the plaintiffs, OPL appealed. Deborah Hankinson argued the case before the Amarillo Court of Appeals, and the Amarillo Court of Appeals reversed the trial court’s judgment, concluding that no evidence supported the jury’s findings. The court of appeals rendered judgment that the plaintiffs take nothing against OPL. Occidental Permian Ltd. v. Helen Jones Foundation, et. al, 333 S.W.3d 392 (Tex. App.—Amarillo Jan. 31, 2011, pet. denied).
The Court of Appeals affirmed the trial court’s judgment on a jury verdict in favor of Deborah Hankinson’s client, Occidental Permian. The court held the evidence was legally sufficient to support the jury’s finding that substantial drainage of oil or gas from a lease did not occur. In so holding, the court relied on the testimony of two experts who found no evidence of substantial drainage and on production data that was consistent with that expected in a bottom water drive reservoir such as the lease at issue. Additionally, the court held that because the trial court reasonably could have found the testimony of an expert rebuttal witness to be unreliable, the trial court did not abuse its discretion in instructing the jury to disregard it. Finally, the court held any error in the trial court’s admission of an expert’s previously undisclosed opinion was harmless in light of the other evidence that was legally sufficient to support the verdict. Petroleum Synergy Group, Inc. v. Occidental Permian, Ltd, 331 S.W.3d 14 (Tex. App. – Amarillo 2010).
In this trespass to try title action, the plaintiff operator had filed suit against another operator who had purchased a lease on a tract of land on which the plaintiff also claimed to hold a lease. Ruling in favor of the defendant, represented by Deborah Hankinson, the court of appeals held that the plaintiff had introduced insufficient evidence at trial to establish superior title out of a common source. The court reasoned the operator could not fill a gap in record title through the oral expert testimony of an attorney, and that documentary evidence is required to establish title. The court of appeals also concluded that the plaintiff had introduced no evidence to prove title by prior possession of the property through production from wells on the lease. McCammon v. Ischy, 2010 WL 1930149 (Tex. App. – Austin 2010, pet. denied).
Brett Kutnick successfully represented defendant/counter-plaintiff Impact Equity and its two owners in their appeal of a $400,000 judgment rendered in favor of the plaintiff for breach of a confidentiality agreement and misappropriation of trade secrets and in the plaintiff’s cross-appeal of a $776,000 judgment rendered in favor of Impact Equity on a claim for breach of a fee agreement. After oral argument, the Dallas Court affirmed the judgment in favor of Impact Equity on its breach-of-contract claim and reversed and rendered judgment that the plaintiff take nothing on its claims. Calce v. Dorado Exploration, Inc., 309 S.W.3d 719 (Tex. App.—Dallas 2010, no pet.).
In a case involving cross-appeals arising from competing motions for summary judgment in a suit over a failed real estate transaction, Brett Kutnick successfully represented the purchaser of commercial real estate on appeal from a judgment that awarded the purchaser specific performance, but precluded the purchaser from recovering damages in addition to specific performance. After Brett Kutnick presented oral argument, the Court of Appeals for the Second District of Texas in Fort Worth affirmed the trial court’s order granting specific performance. In addition, the court sustained the purchaser’s cross-appeal, reversed that portion of the judgment barring the purchaser from recovering damages attributable to the seller’s delay in performing the sales contract, and remanded the case to the trial court for further proceedings as to those damages. Paciwest, Inc. v. Warner Alan Properties, LLC, 266 S.W.3d 559 (Tex. App.—Fort Worth 2008, pet. denied).
Representing First Permian, Deborah Hankinson successfully argued that the preferential right reserved by the assignors of certain oil and gas leases had terminated upon the assignees’ final production payment. The court reasoned that the preferential right did not create an independent right for the assignors to enjoy forever, but was intended to exist only as long as necessary to protect the assignors’ interest in the full payment for the leases. First Permian, L.L.C. v. Graham, 212 S.W.3d 368 (Tex. App. – Amarillo 2006, pet. denied).
Non-operating working interest owners brought suit against an oil and gas unit operator, claiming the operator had violated the preferential rights provision of the operating agreement. Affirming the judgment of the trial court for the operator, the court of appeals held the operator had complied with the terms of the notice provision. The court held the provision did not require the operator to provide detailed information to the plaintiffs about how the total purchase price for all the unit operator’s property in the area was allocated to the unit in question. Additionally, the court concluded plaintiffs’ affiliate had not been properly elected successor operator because plaintiffs had failed to count the operator’s votes. In this appeal, Deborah Hankinson successfully represented Occidental Petroleum. Fasken Land and Minerals, Ltd. v. Occidental Permian, Ltd., 225 S.W.3d 577 (Tex. App. – El Paso 2005, pet. denied).

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.