Lightning Oil Company v. Anadarko E&P Onshore LLC Fka Anadarko E&P Company, LP ( 2015 )

ACCEPTED
04-14-00152-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
9/3/2015 6:25:47 PM
KEITH HOTTLE
NO. 04-14-00152-CV
CLERK
IN THE COURT OF APPEALS
FOURTH DISTRICT OF TEXAS FILED IN
SAN ANTONIO, TEXAS 4th COURT OF APPEALS
SAN ANTONIO, TEXAS
9/3/2015 6:25:47 PM
KEITH E. HOTTLE
LIGHTNING OIL COMPANY, Appellant Clerk
v.
ANADARKO E&P ONSHORE LLC fka
ANADARKO E&P COMPANY, LP, Appellee
APPELLANT LIGHTNING OIL COMPANY’S
MOTION FOR EN BANC RECONSIDERATION
BRUCE K. SPINDLER
State Bar No. 18947050
Email: bspindler@langleybanack.com
ROBINSON C. RAMSEY
State Bar No. 16523700
Email: rramsey@langleybanack.com
STEPHEN J. AHL
Email: sahl@langleybanack.com
LANGLEY & BANACK, INC.
Trinity Plaza II, Suite 900
745 East Mulberry Avenue
San Antonio, Texas 78212
Telephone: (210) 736-6600
Telecopier: (210) 735-6889
ATTORNEYS FOR APPELLANT
LIGHTNING OIL CO.
APPELLANT REQUESTS ORAL ARGUMENT
TABLE OF CONTENTS
TABLE OF CONTENTS ................................................................................. 1
TABLE OF AUTHORITIES ........................................................................... 2
POINTS ......................................................................................................... 4
I. Lightning owns the hydrocarbon-containing strata; but regardless
of who owns the strata, Lightning has the right to prevent Anadarko
from drilling through these formations. ............................................................ 4
II. Lightning’s mineral estate is dominant over the surface estate, and
Anadarko’s conduct interferes with Lightning’s development of its
mineral lease. ..................................................................................................................... 4
III. Anadarko’s conduct in drilling through the hydrocarbon-containing
formations on the Cutlass Lease constitutes a trespass on
Lightning’s mineral estate.......................................................................................... 4
ARGUMENT.................................................................................................. 5
I. Lightning owns the hydrocarbon-containing strata; but
regardless of who owns the strata, Lightning has the right to
prevent Anadarko from drilling through these formations. ...... 5
A. Lightning owns the strata in which its minerals are
embedded because the minerals are part of the realty. ........... 5
B. Regardless of strata ownership, Lightning has the right to
prevent Anadarko from drilling through Lightning’s
minerals............................................................................................................ 10
II. Lightning’s mineral estate is dominant over the surface estate,
and Anadarko’s conduct interferes with Lightning’s
development of its mineral lease. ........................................................... 15
III. Anadarko trespassed on Lightning’s mineral estate.................... 21
PRAYER ...................................................................................................... 22
CERTIFICATE OF COMPLIANCE .............................................................. 23
CERTIFICATE OF SERVICE....................................................................... 24
1
TABLE OF AUTHORITIES
Cases
Cain v. Fontana, 423 S.W.2d 134 (Tex. Civ. App.—San Antonio
1967, writ ref’d n.r.e.) ............................................................................... 21
Chevron Oil Co. v. Howell, 407 S.W.2d 525 (Tex. Civ. App.—Dallas
1966, writ ref’d n.r.e.) ................................................................................ 17
Coastal Oil & Gas Corp. v. Garza, 268 S.W.3d 1 (Tex. 2008) .................. 5, 8
Dunn–McCampbell Royalty Interest, Inc. v. Nat’l Park Serv.,
630 F.3d 431 (5th Cir. 2011) ................................................................. 8, 18
Edwards Aquifer v. Day, 369 S.W.3d 814 (Tex. 2012) ........................ passim
Eliff v. Texon Drilling Co., 210 S.W.3d 558 (Tex. 1948) ............................. 10
Emeny v. United States, 412 F.2d 1319 (Ct. Cl. 1969) ...................... 13, 18, 19
Envtl. Processing Sys., L.C. v. FPL Farming Ltd.,
457 S.W.3d 414 (Tex. 2015) ...................................................................... 21
Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377
(Tex. 2012)........................................................................................... 14, 15
Geothermal Kinetics, Inc. v. Union Oil Co., 141 Cal. Rptr. 879
(Cal. Ct. App. 1977) ................................................................................... 18
Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971) ................................. 5, 15
Harris v. Currie, 176 S.W.2d 302 (Tex. 1943) ............................................ 21
Lightning Oil Co. v. Anadarko E&P Onshore LLC,
__ S.W.3d __, No. 04-14-00903-CV, 2015 WL 4933439
(Tex. App.—San Antonio Aug. 19, 2015, no. pet. h.) ......................... passim
Mellon Mortgage Co. v. Holder, 5 S.W.3d 654 (Tex. 1999)........................ 22
Mitchell v. Baker Motel of Dallas, Inc., 528 S.W.2d 577
(Tex. 1975) ................................................................................................ 16
Russell v. Am. Real Estate Corp., 89 S.W.3d 204
(Tex. App.—Corpus Christi 2002, no pet.) ............................................... 12
Salazar v. Sanders, 440 S.W.3d 863
(Tex. App.─El Paso 2013, pet. denied) ..................................................... 21
Springer Ranch v. Jones, 421 S.W.3d 273
(Tex. App.─San Antonio 2013, no pet.). .............................................. 18, 19
Stephens County v. Mid-Kansas Oil & Gas Co.,
254 S.W. 291 (Tex. 1923) ....................................................................... 7, 13
2
Tarrant County Water Control & Imp. Dist. No. One v. Haupt, Inc.,
854 S.W.2d 909 (Tex. 1993) ................................................................ 15, 16
Texas Co. v. Daugherty, 176 S.W. 717 (Tex. 1917) ............................... passim
Rules
TEX. R. CIV. P. 166a ...................................................................................... 16
3
POINTS
I. Lightning owns the hydrocarbon-containing strata;
but regardless of who owns the strata, Lightning has
the right to prevent Anadarko from drilling through
these formations.
A. Lightning owns the strata in which its
minerals are embedded because the minerals
are part of the realty.
B. Regardless of strata ownership, Lightning has
the right to prevent Anadarko from drilling
through Lightning’s minerals.
II. Lightning’s mineral estate is dominant over the
surface estate, and Anadarko’s conduct interferes
with Lightning’s development of its mineral lease.
III. Anadarko’s conduct in drilling through the
hydrocarbon-containing formations on the Cutlass
Lease constitutes a trespass on Lightning’s mineral
estate.
4
The panel has misconstrued the Texas Supreme Court’s decision in
Coastal Oil & Gas Corp. v. Garza, 268 S.W.3d 1 (Tex. 2008), to arrive at a
ruling that is directly contrary to Texas Co. v. Daugherty, 176 S.W. 717
(Tex. 1917), a controlling Supreme Court case, which the panel’s opinion
did not mention at all, and which was reaffirmed on this very issue in
Edwards Aquifer v. Day, 369 S.W.3d 814, 829 (Tex. 2012).
Not only did the panel ignore Texas Supreme Court precedent that oil
and gas in place are part of the realty, the panel’s opinion contravenes the
doctrine of dominant jurisdiction by elevating the surface estate over the
mineral estate. See Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex. 1971)
(holding that the mineral estate is dominant over the surface estate).
Under these circumstances, the panel’s opinion merits en banc
reconsideration to addresses core issues that impact not only Texas
jurisprudence relating to oil and gas, but also the oil-and-gas industry itself.
ARGUMENT
I. Lightning owns the hydrocarbon-containing strata; but
regardless of who owns the strata, Lightning has the right to
prevent Anadarko from drilling through these formations.
A. Lightning owns the strata in which its minerals are
embedded because the minerals are part of the realty.
According to the panel’s opinion, although Lightning owns the
minerals, it does not own the realty in which those minerals are embedded
5
because they are not a part of the realty. Lightning Oil Co. v. Anadarko
E&P Onshore LLC, __ S.W.3d __, No. 04-14-00903-CV, 2015 WL
4933439, at *3−4 (Tex. App.—San Antonio Aug. 19, 2015, no. pet. h.). But
according to the Supreme Court of Texas, minerals in place “lie within the
strata of the earth, and necessarily are a part of the realty.” Daugherty, 176
S.W. at 719 (cited with approval and reaffirmed on this issue in Edwards
Aquifer Authority v. Day, 369 S.W.3d 814, 829 (Tex. 2012)). “[F]or the
purpose of ownership and conveyance of solid minerals, the earth may be
divided horizontally as well as vertically.” Daugherty, 176 S.W. at 719.
Therefore, “title to the surface may rest in one person and title to the
strata beneath the surface containing such minerals in another.”
(emphasis added). Id. Accordingly, if, as the panel concedes, Lightning
owns the minerals, it also necessarily owns the real-estate strata in which
those minerals are embedded. See id.
The panel’s opinion states that “Stephens does not directly address
who owns the earth surrounding the minerals.” Lightning, 2015 WL
4933439, at *4. Actually, Stephens does address that issue by pointing out
that “oil and gas in place are minerals and realty, subject to ownership,
severance, and sale, while embedded in the sands and rocks beneath the
earth’s surface” and that “before oil is extracted it is part of the land.”
Stephens County v. Mid-Kansas Oil & Gas Co., 254 S.W. 291, 292 (Tex.
6
1923) (cited with approval in Day, 369 S.W.3d at 828-29). Therefore, if, as
the Supreme Court of Texas has held, oil and gas in place are owned as part
of the land, it necessarily follows that Lightning owns the land in which the
oil and gas is ensconsced—at least until Lightning’s lease has expired—
because those minerals are part of that land. See Daugherty, 176 S.W. at
719 (holding that minerals in place “are a part of the realty while in place”).
The panel also recites that “Stephens does not state that an oil and gas
lease automatically conveys to the lessee the exclusive right to control the
subterranean structures within the boundaries circumscribing the lease.”
Lightning, 2015 WL 4933439, at *4. But it does state that an oil-and-gas
lease transfers to the lessee ownership of any strata in which minerals exist.
See Stephens, 254 S.W. at 293 (recognizing that an oil-and-gas lease
“effect[s] a severance of the property in the strata of minerals from the
property in the remainder of the land; the mineral strata being as much
land as the nonmineral portion of the soil”). This is consistent with the
Texas Supreme Court’s holding that minerals in place “lie within the strata
of the earth, and necessarily are a part of the realty.” Daugherty, 176 S.W.
at 719.
The panel cites Dunn–McCampbell Royalty Interest, Inc. v. Nat’l
Park Serv. in support of the assertion that “the conveyance of mineral
rights ownership does not convey the entirety of the subsurface.”
7
Lightning, 2015 WL 4933439, at *5 (quoting 630 F.3d 431, 441 (5th Cir.
2011)). But even under the panel’s rationale, this conveyance would still
include that part of the subsurface that contains minerals. See Daugherty,
176 S.W. at 719. Nevertheless, Anadarko asserts that the ownership of
minerals does not include ownership of the strata in which they are located
in place. The crux of that claim, which this court has erroneously adopted,
relies on the following language from the Texas Supreme Court’s opinion in
Garza:
While a mineral rights owner has a real interest in
oil and gas in place, this right does not extend to
specific oil and gas beneath the property; ownership
must be considered with the law of capture, which is
recognized as a property right as well. The minerals
owner is entitled, not to the molecules actually
residing below the surface, but to a fair chance to
recover the oil and gas in or under his land, or their
equivalents in kind. (emphasis added).
268 S.W.3d at 15.
Anadarko and the commentators on which it relies assume that
Garza abrogated the law of ownership of minerals in place. But in Day,
four years following Garza, the Supreme Court specifically addressed this
misconception:
Most recently, in Coastal Oil & Gas Corp. v. Garza
Energy Trust, we observed that “the rule of capture
determines title to [natural] gas that drains from
property owned by one person onto property owned
by another. It says nothing about the ownership of
gas that has remained in place (emphasis added).
8
Day, 369 S.W.3d at 829. 1 Therefore, the Supreme Court rejected the same
argument Anadarko makes here:
Because a landowner is not entitled to any specific
molecules of groundwater or even to any specific
amount, the Authority [Edwards Aquifer] argues
that the landowner has no interest that entitles him
to exclude others from taking water below his
property and therefore no ownership in place. The
Lessee in Daugherty made essentially the same
argument and we rejected it. (emphasis added).
Id. at 830.
Here, as in Daugherty, Lightning’s oil-and-gas lease does not
constitute a “mere demise of the premises for a given period, as in the case
of an ordinary leasehold,” nor does it “amount simply to a grant of the right
to prospect upon the land for oil or gas and reduce those substances to
possession and ownership.” 176 S.W. at 718. Instead, it deals with “the oil,
gas, and other minerals ‘in and under’ the land as property, in the ground,
capable of ownership and subject to be[ing] conveyed.” Id. To rule in
Anadarko’s favor, this court would have to (and did) ignore Texas Supreme
Court precedent relating to ownership of minerals in place.
1 All internal quotations and citations omitted throughout this motion unless
otherwise noted.
9
B. Regardless of strata ownership, Lightning has the right
to prevent Anadarko from drilling through Lightning’s
minerals.
Even hypothetically accepting the assertion that Lightning does not
own this mineral-estate strata, it nevertheless has the right to the exclusive
use and possession of any strata in which minerals are located. Day
confirmed that the right of an oil-and-gas owner to prevent the drilling of a
well on an adjacent tract that was bottomed (not producing) in an oil-and-
gas formation under his own property. The Supreme Court stated that the
landowner had the right to exclude others, not only from producing the
groundwater (which it earlier equated to oil-and-gas rights), but from the
groundwater itself:
Furthermore, we later held that a landowner is
entitled to prohibit a well from being drilled on
other property but bottomed in an oil and gas
formation under his own—a slant or deviated well.
Thus, a landowner has a right to exclude others
from groundwater beneath his property, but one
that cannot be used to prevent ordinary drainage
(emphasis added).
Day, 369 S.W.3d at 830 (quoting Eliff v. Texon Drilling Co., 210 S.W.3d
558, 561 (Tex. 1948)).
In discussing the rights available to a landowner to exclude others
from their real-property interest, Day reiterated:
In Elliff, we restated the law regarding ownership of
oil and gas in place: In our state the landowner is
regarded as having absolute title in severalty to the
10
oil and gas in place beneath his land. The only
qualification of that rule of ownership is that it must
be considered in connection with the law of capture
and is subject to police regulations. The oil and gas
beneath the soil are considered a part of the realty.
Each owner of land owns separately, distinctly and
exclusively all of the oil and gas under his land and
is accorded the usual remedies against the
trespassers…. (emphasis added).
Day, 369 S.W.3d at 831-832.
In rejecting Lightning’s reliance on Day, the panel stated, “Day did
not address the central question here: Who owns the earth in which a
mineral estate may be contained?” Lightning, 2015 WL 4933439, at *3.
But Daugherty, which Day cited, did address that question—and the
answer is: the mineral estate owner. 176 S.W. at 719. (“[T]itle to the surface
may rest in one person and title to the strata beneath the surface
containing such minerals in another.”). (emphasis added). Regardless,
even ignoring this Texas Supreme Court precedent and adopting the panel’s
perspective, the central question would not be whether Lightning owns that
earth, but whether Anadarko is interfering with Lightning’s minerals, which
are entrenched in that earth. Lightning’s summary-judgment evidence
clearly establishes interference. CR 50−55; 95−99.
Day reaffirms the precept that ownership of minerals in place
includes ownership of the subsurface strata that surrounds the minerals. In
essence, the panel’s opinion has redefined “strata” to exclude the part of the
11
land that contains minerals. But even under the panel’s theory, the only
strata, if any, over which the surface owner would retain control would be
that part of the strata that does not contain minerals. Anadarko’s proposed
wells go through strata where minerals are in place—minerals that
Lightning, not the surface owner, controls. As a result, when Anadarko
pierces that part of the earth, it necessarily displaces the minerals, because
they are embedded in the “surrounding earth,” thereby making it
impossible to travel through the strata without also going through and
taking Lightning’s minerals. See CR 50−55, 95−99; Supp. CR 337, 418; 2nd
Supp. CR 409.
Lightning has the right to exclude any drilling that will interfere with
its operations or rights to produce its mineral estate. Anadarko cannot drill
through the earth where Lightning’s minerals are located without also
drilling through those minerals, thereby interfering with Lightning’s
operations and production efforts. CR 50−55, Supp. CR 332−33. As a
result, Anadarko’s actions constitute a trespass. Russell v. Am. Real Estate
Corp., 89 S.W.3d 204, 208 (Tex. App.—Corpus Christi 2002, no pet.)
(“Every unauthorized entry is a trespass even if no damage is done.
Trespass requires only proof of interference with the right of possession.”).
This is not an esoteric argument about mere nominal interference or
trespass: Anadarko’s planned wells will, at a minimum, prevent Lightning
12
from being able to drill wells in the target Eagle Ford formation due to the
danger presented by Anadarko’s trespassing as well as interfering by
drilling its wells. CR 419; 1st Supp. CR 331; 2nd Supp. CR 410.
The “subterranean structures that harbor Lightning’s oil and gas” are
hydrocarbon-containing strata, stacked between other strata without
hydrocarbons. Therefore cutting through that stack penetrates all of the
strata, including those bearing hydrocarbons. Lightning, 2015 WL
4933439, at *1. Unlike the litigant in Emeny v. United States, Lightning is
not trying to store offsite materials in an otherwise vacant “subterranean
structure.” Instead, it is protecting its own onsite minerals, which are part
of “the earth,” or strata, that Anadarko intends to traverse. 412 F.2d 1319,
1323 (Ct. Cl. 1969); see also Day, 369 S.W.3d at 828−29 (recognizing that
oil and gas in place are part of the realty).
Furthermore, even if, as the panel’s opinion asserts, “the surface
owner controls ‘the matrix of the underlying earth,’” that control can be
transferred by sale or lease. Lightning, 2015 WL 4933439, at *1; Stephens,
254 S.W. at 293 (recognizing that once “the underlying strata have been
severed from the surface by sale,” the surface owner is no longer “an owner
downward to the centre”). Such a transfer occurred here before the current
surface owner acquired its interest, and that severance was recognized
when Lightning acquired the mineral estate from a third party. CR 95−99.
13
Lightning’s acquisition of the mineral estate gave it the right to
exploit the minerals, including the exclusive right to use the mineral-
bearing pore space and rock without interference from the surface owner or
anyone else. Lightning’s affidavits confirm that Anadarko’s drilling
operations will penetrate hydrocarbon-containing formations and interfere
with Lightning’s ownership of the hydrocarbon estate, and that recoverable
hydrocarbons on the Cutlass Lease will be wasted by Anadarko’s drilling
operations. CR 50−55, 95−99; 1st Supp. CR 329-30, 332, 416-18; 2nd Supp.
CR 407, 409.
As the panel’s opinion acknowledges, under the mineral lease
Lightning has not only “the right of exploring for, developing, operating,
producing, … marketing, treating and transporting oil and gas” from the
leased premises, but also the right of “owning” these minerals. Lightning,
2015 WL 4933439, at *1. That ownership includes the right to prevent non-
owners like Anadarko from traversing that part of the earth in which those
minerals are embedded and displacing the minerals from their original
position without the owner’s permission. See Day, 369 S.W.3d at 831-832;
Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377, 383 (Tex. 2012)
(recognizing that the rights of ownership include “the right to exclusive
possession” and “the right to manage use by others”).
14
II. Lightning’s mineral estate is dominant over the surface
estate, and Anadarko’s conduct interferes with Lightning’s
development of its mineral lease.
According to the panel, “[t]he central question in this appeal is the
nature of Lightning’s interest,” and whether “its mineral estate includes the
right to exclude others from the estate.” Lightning, 2015 WL 4933439, at
*3. But that is not the question at all because Texas real-property law holds
that ownership includes the right to exclude others. Evanston, 370 S.W.3d
at 383. The question is not the nature of Lightning’s interest, but whether
that interest is dominant over or subservient to Anadarko’s interest. The
answer is: Lightning’s mineral estate is dominant, and there is no Texas
case law that would support a contrary conclusion.
Anadarko’s assertion that Briscoe Ranch, as the surface-estate owner,
can control the “subterranean structure” to the detriment of Lightning, as
the mineral-estate owner, is contrary to the doctrine of mineral ownership
in Texas, which recognizes that the mineral estate is dominant over the
surface estate. Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex. 1971). To
give the surface owner unconditional dominion over the mineral-bearing
“subterranean structures’’ would change Texas oil-and-gas law by making
the surface estate dominant over the mineral estate. Id.; Tarrant County
Water Control & Imp. Dist. No. One v. Haupt, Inc., 854 S.W.2d 909, 911
(Tex. 1993) (holding that “the mineral estate is the dominant estate”).
15
As a general rule, the mineral owner’s exclusive right to use the
mineral-bearing pore space and rock is subject to the accommodation
doctrine, which provides that “[a]lthough the mineral estate is the
dominant estate, the rights implied in favor of the mineral estate are to be
exercised with due regard for the rights of the surface owner.” Tarrant
County Water Control and Imp. Dist. No. One v. Haupt, Inc., 854 S.W.2d
909, 911 (Tex. 1993). But under Anadarko’s initial five-well-pad proposal
(the first of 13 pads planned by Anadarko), Lightning would not merely be
accommodating the surface owner; instead, the surface use would, in effect,
be condemning at least one of Lightning’s wells without compensating
Lightning for that loss. Supp. CR 414-419.
The evidence confirms that Anadarko’s wells will: (1) interfere with
Lightning’s development of its mineral estate, including but not limited to
the Cutlass A-5 well; (2) result in Lightning’s inability to retrieve all the
hydrocarbons underlying the Cutlass Lease; and (3) prevent Lightning from
drilling its A-5 well. Supp. CR 414-419. In the alternative, at a minimum, a
material fact question exists as to whether Anadarko’s actions constitute
interference with Lightning’s operations, thereby precluding a summary
judgment. See TEX. R. CIV. P. 166a(c); Mitchell v. Baker Motel of Dallas,
Inc., 528 S.W.2d 577, 578 (Tex. 1975) (holding that where the summary-
judgment evidence “does not establish as a matter of law that there is no
16
genuine issue of fact as to one or more of the essential elements of [a] cause
of action … it will not support a summary judgment”).
The panel attempts to distinguish Chevron Oil Co. v. Howell by
asserting that the surface owner there did not give permission for a third
party to drill, whereas the surface owner here “gave Anadarko its
permission.” Lightning, 2015 WL 4933439, at *5 (citing 407 S.W.2d 525,
526 (Tex. Civ. App.—Dallas 1966, writ ref’d n.r.e.)). Although the panel’s
opinion concedes that Howell precluded a third party’s “drilling through
one mineral estate to reach another without [the surface and mineral estate
owners’] permission,” the panel asserts that Howell “did not expressly
consider whether only the surface estate owner’s permission would have
been sufficient.” Id. But that claim is contrary to Howell’s rationale that
neither the surface owner nor the mineral owner had granted permission.
407 S.W.2d at 526. The consent of both was required because two separate
procedures were involved: the surface-owner’s consent was necessary “to
come onto the surface lease to start drilling its oil well,” and the mineral-
owner’s consent was needed “to penetrate the subsurface oil, gas and
mineral lease.” 407 S.W.2d 526.
In Springer Ranch v. Jones, this court recognized that “the physical
structures and subsurface substances that the surface estate and mineral
estate owners possess are inherently intertwined, at least with respect to
17
hydrocarbons.” 421 S.W.3d 273, 284 (Tex. App.─San Antonio 2013, no
pet.). Springer tempered that recognition with the observation that “if
there are no minerals beneath the surface, the mineral estate owner owns
the legal fiction of an estate that is nothing.” Id. (citing Dunn–McCampbell,
630 F.3d at 441). Here, however, it is undisputed that there are minerals
beneath the surface. CR 50−55, 95−99; 1st Supp. CR 329-30, 332, 416-18;
2nd Supp. CR 407, 409. Therefore, these hydrocarbons are real, not
fictional, and are intertwined with the subsurface strata.
Emeny v. United States, on which Springer relied, is also “readily
distinguishable” because it “deals only with the ownership of a geologic
formation having value as a storage facility, and not an extractable
commercially valuable resource.” Geothermal Kinetics, Inc. v. Union Oil
Co., 141 Cal. Rptr. 879, 882 (Cal. Ct. App. 1977) (citing 412 F.2d 1319, 1323
(Ct. Cl. 1969)). Furthermore, Emeny involved the proposed storage of
others’ minerals, not the mineral estate owner’s. 412 F.2d at 1323.
“[U]nlike Villarreal,” says the panel, “there is no evidence that
Anadarko conducted a seismographic survey of Lightning’s mineral estate.’’
Lightning, 2015 WL 4933439, at *4. But even without a seismographic
survey Anadarko will gather information about Lightning’s mineral estate
as Anadarko drills through the several oil-and-gas-producing horizons
between the surface and the point at which Anadarko’s wells cross the lease
18
line into its mineral estate under the Chaparral WMA. CR 50−55, 95−99;
1st Supp. CR 331-32, 418; 2nd Supp. CR 408-09. Furthermore, Anadarko’s
drilling through those horizons will necessarily result in incidental takings
of Lightning’s minerals. CR 50−55, 95−99; 1st Supp. CR 331−32, 418; 2nd
Supp. CR 408−09.
It is undisputed that Anadarko’s well bore will contact hydrocarbons
on the Cutlass Lease in the Olmos, San Miguel, Wilcox, and Austin Chalk
formations and that these hydrocarbons will be reflected in mud-logging by
Anadarko when they are brought to the surface. 1st Supp CR 332.
Furthermore, Anadarko’s present five-well plan will prevent Lightning from
drilling its Cutlass A-5 well, which will result in its being unable to produce
recoverable hydrocarbons in the Cutlass Lease. CR 687-693.
The panel’s opinion asserts that “ownership of the hydrocarbons does
not give the mineral owner ownership of the earth surrounding those
substances.” Lightning, 2015 WL 4933439, at *5 (quoting Springer Ranch,
421 S.W.3d at 282) (citing Emeny, 412 F.2d at 1323). But even
hypothetically accepting that theory, the mineral-estate owner would still
have an exclusive right or easement in the surface owner’s earth
surrounding those substances during the lease term. That would include
the right to enjoin operations that would interfere with Lightning’s efforts
to produce the minerals in place. Day, 369 S.W.3d at 831−32.
19
In its analysis of Humble v. West, the panel recites that “the Wests—
who retained the now-severed mineral estate—no longer owned the
underground reservoir because ‘the surface of the leased lands remaining
as the property of the [surface estate owners] included the geological
structures beneath the surface.’” Lightning, 2015 WL 4933439, at *5. But
West did not retain the mineral estate; it owned only a non-corporeal
royalty interest. 508 S.W.2d at 815. Therefore, any reference to Humble’s
owning the geological structures beneath the earth was as the owner of both
the surface and mineral estates, not just the surface estate, as the panel’s
opinion mis-presumes. Lightning, 2015 WL 4933439, at *5. Unlike the
Wests, Lightning owns the corporeal mineral estate.
If, as here, property is “in the ground,” it cannot reasonably be argued
that the owner of that property does not have exclusive access to that
ground. Instead, “[f]or the purpose of making the exploration and
producing all the oil, gas, and other minerals that might be within the
ground, and the erection of all structures necessary thereto, as well as their
storing and transportation, the possession of the land itself is likewise
granted …” Daugherty, 176 S.W. at 718. Therefore, even if Briscoe could
give permission to drill through the earth under its surface, Anadarko does
not have the right to drill through Lightning’s minerals. The panel’s opinion
purports to erase that right by discarding the doctrine of the dominant
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mineral estate as well as the mineral-interest owner’s exclusive right to the
strata in which the minerals are present.
III. Anadarko trespassed on Lightning’s mineral estate.
The panel correctly recites that “a trespass is ‘an unauthorized entry
upon the land of another.’” Lightning, 2015 WL 4933439, at *3 (quoting
Envtl. Processing Sys., L.C. v. FPL Farming Ltd., 457 S.W.3d 414, 424
(Tex. 2015)). Lightning’s mineral estate is an interest in land. Harris v.
Currie, 176 S.W.2d 302, 305 (Tex. 1943). Therefore, Anadarko is not
authorized to pass through Lightning’s minerals without Lightning’s
permission. See Salazar v. Sanders, 440 S.W.3d 863, 876 (Tex. App.─El
Paso 2013, pet. denied).
In the panel’s view, Lightning does not own the earth in which the
minerals are embedded. Lightning, 2015 WL 4933439, at *3. But Lightning
does not need to own this mineral-bearing earth to prevent Anadarko from
trespassing. It is enough that Lightning has “a legal right to exclude others
from the property.” See Lightning, 2015 WL 4933439, at *3 (citing Envtl.,
457 S.W.3d at 424, and Cain v. Fontana, 423 S.W.2d 134, 137 (Tex. Civ.
App.—San Antonio 1967, writ ref’d n.r.e.)). Therefore, regardless of the
distinction that the panel makes between the minerals and the earth in
which they are embedded, Lightning has the right to prevent Anadarko
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from going through that earth because Anadarko cannot do so without
trespassing through Lightning’s minerals, which are encased in that land.
“Anadarko has [not] bottomed or opened a well within the Cutlass
Lease,” says the panel. Lightning, 2015 WL 4933439, at *4. But Anadarko
does not have to bottom or open a well to interfere with Lightning’s
activities in the strata that hold the minerals Lightning owns by virtue of
the lease. Anadarko’s drilling path will take it through not just any strata of
earth, but strata in which Lightning’s minerals are embedded. See CR
50−55, 95−99; 1st Supp. CR 330, 332, 416; 2nd Supp. CR 407, 409. In
drilling through these mineral-bound formations, Anadarko will necessarily
displace hydrocarbons and will waste minerals that are a part of this strata
as Anadarko goes through Lightning’s land without Lightning’s permission.
CR 50−55, 95−99; 1st Supp. CR 330, 417; 2nd Supp. CR 411. That is a
trespass. See Mellon Mortgage Co. v. Holder, 5 S.W.3d 654, 671 (Tex.
1999).
PRAYER
For these reasons, Lightning asks this court to:
• grant this motion for en banc reconsideration;
• withdraw the court’s original opinion;
• issue a new opinion reversing the trial court’s judgment
and rendering judgment in favor of Lightning;
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• in the alternative, issue a new opinion reversing the trial
court’s judgment and remanding this case for trial; and
• grant Lightning all other relief to which it is entitled.
Respectfully submitted,
/s/ Bruce K. Spindler
BRUCE K. SPINDLER
State Bar No. 18947050
Email: bspindler@langleybanack.com
ROBINSON C. RAMSEY
State Bar No. 16523700
Email: rramsey@langleybanack.com
JOHN W. PETRY
State Bar No. 15854000
Email: jpetry@langleybanack.com
STEPHEN J. AHL
Email: sahl@langleybanack.com
LANGLEY & BANACK, INC.
Trinity Plaza II, Suite 900
745 East Mulberry Avenue
San Antonio, Texas 78212
Telephone: (210) 736-6600
Telecopier: (210) 735-6889
ATTORNEYS FOR APPELLANT
LIGHTNING OIL CO.
CERTIFICATE OF COMPLIANCE
Appellant Lightning Oil Company certifies that the number of words
in this motion, including its headings, footnotes, and quotations, is: 4194.
/s/ Bruce K. Spindler
BRUCE K. SPINDLER
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CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document has
been sent to counsel listed below on September 3, 2015:
David Palmer
MOSES, PALMER & HOWELL, LLP
309 W. 7th Street, Suite 815
Fort Worth, TX 76102
Email: dpalmer@mph-law.com
Telephone: 817.255.9100
Telecopier: 817.255.9199
Donato D. Ramos
LAW OFFICES OF DONATO D. RAMOS, LLP
6721 McPherson Road
P. O. Box 452009
Laredo, Texas 78045
donatoramosjr@ddrlex.com
mrodriguez@ddrlex.com
Telephone: 956.722.9909
Telecopier: 956.727-5884
/s/ Bruce K. Spindler
BRUCE K. SPINDLER
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