Lightning Strikes Twice

After refusing to review denial of injunction, Texas Supreme Court to take up issue of denial of trespass claim in Lightning Oil v. Anadarko.On Friday, January 20th, the Texas Supreme Court agreed to hear a case from the San Antonio Court of Appeals, involving Lightning Oil Company and Anadarko Petroleum Corporation. The dispute surrounds Lightning’s claim that Anadarko will trespass if it drills through Lightning’s leasehold estate to access an adjacent oil and gas block. Lightning leased the minerals beneath the Briscoe Ranch in Dimmit, Texas. Anadarko’s Chaparral lease, which covers land directly south of Lightning’s leases, precluded use of the surface, so Anadarko entered into an agreement with the Briscoe Ranch owners to use the surface to drill horizontal wells beneath the Chaparral. Lightning filed suit, seeking to prevent Anadarko from drilling and sought a temporary injunction while the parties litigated whether Anadarko’s well would trespass Lightning’s mineral leasehold. The trial court denied Lightning’s application for temporary injunction, and Lightning appealed.  In November 2014, the appeals court affirmed the trial court decision, holding that Lightning did not meet its temporary injunction request burden to prove probable, imminent, and irreparable injury if Anadarko is allowed to drill on the Briscoe Ranch surface.[1] The Texas Supreme Court denied review of Lightning’s petition.After losing a summary judgment battle at the trial level as to the trespass issue, Lightning appealed. In October 2015, the San Antonio Court of Appeals again ruled in favor of Anadarko, this time holding that the surface owner could grant Anadarko the right to drill through the subsurface.[2] Lightning appealed to the Texas Supreme Court, and this time the Court granted review.  The Court will be deciding whether Anadarko’s use of Briscoe Farm’s surface estate, to drill beneath its southward Chaparral leases, is a trespass to Lightning’s oil and gas leasehold estate beneath the Briscoe Farm acreage. This issue is a significant one to the industry, and the impact of the Court’s decision is likely to have reverberating effects, as the use of offsite drilling pads is commonplace, and the Court may clarify how an operator should proceed. [1] Lightning Oil Co. v. Anadarko E & P Onshore, LLC, No. 04-14-00152-CV, 2014 WL 5463956, at *1 (Tex. App.—San Antonio Oct. 29, 2014, pet. denied) (mem. op.).[2]Lightning Oil Co. v. Anadarko E & P Onshore LLC, 480 S.W.3d 628, 638 (Tex. App.—San Antonio 2015), review granted (Jan. 20, 2017).Conrad Hester & Sam FubaraThompson & Knight LLP