PUBLICATION UPDATE

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Williams & Meyers, OIL AND GAS

Publication 820 Release 55 October 2020

HIGHLIGHTS 6, Professors Martin and Kramer have updated the Manual of Oil and Gas Terms in Volume 8. 2020 Annual Revision Revisions to Volumes 1–6. • Updates to Volumes 1–6 with the newest develop- Among the many issues covered in ments in oil and gas law. these volumes are the following: Revision to Manual of Oil Bad-faith trespasser. Where and Gas Terms (Volume 8) plaintiffs suffered inverse condemna- • Supplies the latest construc- tion through flooding of their lands, tions of existing terms and they had a remedy against the state defines many new terms. for royalties received by the state. Crooks v. Department of Natural Re- Release 55 brings you the 2020 sources revision of Williams & Meyers, Oil (La. 2020), discussed at § and Gas Law, prepared by Patrick H. 226. Martin, Campanile Professor of Min- Decedent’s estates: Mineral or eral Law Emeritus, Paul M. Hebert surface estate. In interpreting the Law Center, Louisiana State Univer- devise of a “ranch,” the court must sity, and Bruce M. Kramer, Maddox take a holistic approach and look at Professor of Law Emeritus, Texas the entire last . Tech University School of Law. Where there is language evincing the Along with incorporating recent testator’s intent to devise only the statutory, regulatory, and judicial de- surface estate when it referenced the velopments into Volumes 1 through property in question, the court found that the mineral estate was not de- rated (5th Cir. 2019), discussed at § vised. ConocoPhillips Co. v. Ramirez 503.2. (Tex. 2020), discussed at §§ 301, Open mines doctrine—North 504, 511, 512. Dakota. The open mines doctrine is Declaratory judgment action to part of the law in North Dakota; in Ohio. Noting that oil where a creating the and gas leases straddle the line be- only reserved the minerals in the tween property and , the property and did not reserve the sur- Ohio court ruled that a declaratory face, the doctrine applied. Reese v. judgment action to quiet title is sub- Reese-Young (N.D. 2020), discussed ject to a limitation of 21 years. at § 513. Browne v. Artex Oil Co. (Ohio 2019), Overriding royalty interest: Du- discussed at §§ 203.1, 604.2. ration; wash-out transaction. An Fractional interests: Convey- overriding royalty interest usually ances; ; after- terminates when the lease out of acquired title doctrine; Duhig which it was carved terminates. The Rule. The doctrines of after-acquired parties, however, may change the termination date by including an ex- title and estoppel by deed only apply tension or renewal clause in the con- to parties in privity of estate to the veyance. An attempt to include grantor. A party who independently “new” leases in describing what will received a fractional mineral interest cause the overriding royalty interest is not covered by the Duhig Rule and not to terminate violates the Rule cannot have its interest diminished Against Perpetuities. Yowell v. Gran- where the original grantor over- ite Operating Co. (Tex. 2020), dis- conveyed its interest. Trial v. Dragon cussed at § 322. (Tex. 2019), discussed at §§ 304, Post-production costs in royalty 310, 311. calculation. Decisions from courts in Gross proceeds of sale. In an oil Ohio and New Mexico have upheld and gas contract, the term “gross royalty payments based on netback proceeds” indicates a lessor’s royalty calculations. Henceroth v. Chesa- is calculated based on the total peake Exploration, LLC (6th Cir. amount received for the product 2020); Bounty Minerals, LLC v. without deductions for making the Chesapeake Exploration, LLC (N.D. product marketable. Newfield Explo- Ohio 2019); Zehentbauer Family ration Co. v. State (N.D. 2019), dis- Land LP v. Chesapeake Exploration, cussed at § 646.1. LLC (N.D. Ohio 2020); Gateway Joint operating agreement. Au- Royalty, L.L.C. v. Chesapeake Expl., thority for expenditures provision did (Ohio App. 2020); Anderson Living not apply to a plugging and abandon- Trust v. XTO Energy, Inc. (D.NM ment operation. Apache Deepwater, 2019); discussed at §§ 643.2, 645.2. L.L.C. v. W&T Offshore, Incorpo- Protection of adjoining landown- ers. In cases involving a sinkhole Rule Against Perpetuities: Cy caused by the collapse of a salt dome, pres; overriding royalty interests. alleged to be the result of depressur- An attempt to prevent the termination ization of an oil and gas reservoir, of an overriding royalty interest Louisiana courts applied a strict cau- should the assignee enter into a sation requirement on the allegedly “new” lease violates the Rule Against injured party to show that the defen- Perpetuities. Tex. Prop. Code. § dant’s actions or inactions caused the 5.043, however, requires the court to pipeline to be damaged. Florida Gas modify the conveyance to avoid the Transmission Co., LLC v. Texas Rule problem. Section 5.043 is not Brine Co., LLC (La. App. 2019); subject to any statute of limitations Pontchartrain Natural Gas System v. since it essentially mandates a court Texas Brine Co., LLC (La. App. to interpret the instrument in a way 2019); discussed at § 217. that avoids invalidation under the Realty-personalty classification: Rule. Yowell v. Granite Operating Recordation. Gathering agreements Co. (Tex. 2020), discussed at § 322. constituted covenants Rule of capture: Hydraulic frac- that ran with the land under Okla- turing; cross-boundary migration. homa law and were not executory In order to succeed on a subject to rejection under § trespass action alleging that either/or 365 of the Bankruptcy Code. In re frac fluids or proppants have mi- Alta Mesa Resources, Inc. (S.D. Tex. grated across a property line, the 2019), discussed at §§ 213.2, 724.6, owner must allege and prove that 735. there was such a physical invasion. Remedies for nonpayment of Without such proof, the rule of cap- royalties. Nonparticipating royalty ture would insulate the oil and gas was distinguished from overriding operator from trespass liability. royalty for purposes of a North Da- Briggs v. Southwestern Energy Pro- kota statute requiring interest on late duction Co. (Pa. 2020), discussed at payments for “royalties to the min- §§ 2.01, 2.03. eral owner.” SunBehm Gas, Inc. v. Substances included within term Equinor Energy, LP (D.N.D. 2020), “minerals.” Valuable dinosaur fos- discussed at §§ 301, 418. sils (“the Dueling Dinosaurs”) were Rule Against Perpetuities— not minerals. Murray v. BEJ Miner- Kansas. A mineral interest is real als, LLC (Mont. 2020), discussed at § property, so the Rule Against Perpe- 219. tuities would have no application to a Washout transaction; extension, defeasible mineral interest as it renewal. Top leases were not an vested at the time of the reservation. extension or renewal of a base lease; Jason Oil Co., LLC v. Littler (Kan. there was no breach of a duty to 2019), discussed at §§ 210.8, 214.1, overriding royalty owners. Pitch- 310, 323, 335. black Oil, LLC v. Hess Bakken In- vestments II, LLC (8th Cir. 2020), • Index rates discussed at §§ 420.2, 437.1, 806.3, • Load distribution company 832. • Mariner East Pipeline Manual of Oil and Gas Terms. • Mineral dump Mineral Leasing Act: Pipeline • Multiunit horizontal well and rights-of way. In • Nationwide Permit 12 U.S. Forest Service v. Cowpasture (NWP 12) River Preservation Ass’n (U.S. 2020), the U.S. Supreme Court re- • No-harm letter versed the Fourth Circuit’s conclu- • No-notice contract sion that the transfer of an • No-obligation clause or right-of-way to the National Park • NWP 12 Service removed the Forest Service’s • Open well doctrine power to grant a permit for a pipeline easement. Instead the Court con- • Pipeline Hazardous Materi- cluded that the Appalachian National als Safety Administration Trail was subject to the control of the (PHMSA) Forest Service, which could issue • Public utility rule such a permit. See “M” Terms. • Royalty Policy Committee Along with the existing terms and • Setback rules definitions—many of which have • STACK Formation been updated to incorporate the latest • Stacking costs cases, regulatory developments, and pertinent law review articles—the • Texas Injection Well Act following new terms and acronyms • Texas Unclaimed Property have been added: Act • Additive rates • True vertical well • Blanket easement • Unbundling cost allocation • Climate change litigation (UCA) • Demobilization • Unconventional formation • Executive Order 13783 • Unconventional well • Fixed term lease • Valuation Rule • Horizontal directional drill- • Virtual aggregation pool ing • Wyoming Civil Trespass • Hydrostatic testing Act • Incremental-plus rates Matthew Bender provides continuing cus- service matters, +1.800.833.9844. tomer support for all its products: • Outside the United States and • Editorial assistance—please consult Canada, +1.937.247.0293, or fax the “Questions About This Publica- (+1.800.828.8341) or email tion” directory printed on the copy- ([email protected]); right page; • Toll-free ordering (+1.800.223.1940) • Customer Service—missing pages, or visit shipments, billing or other customer www.lexisnexis.com/BrowseUs.

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Copyright © 2020 Matthew Bender & Company, Inc., a member of the LexisNexis Group. Publication 820, Release 55, October 2020

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FILING INSTRUCTIONS

Williams & Meyers, OIL AND GAS LAW

Publication 820 Release 55 October 2020

Check As Done

□ 1. Check the Title page in the front of your present Volume 1. It should indicate that your set is filed through Release Number 54. If the set is current, proceed with the filing of this release. If your set is not filed through Release Number 54, DO NOT file this release. Please call Customer Services at 1-800-833-9844 for assistance in bringing your set up to date. □ 2. Separate this Release Number 55 into the following groups of material: • Package 1 contains White Revision pages for Volumes 1 through 4 • Package 2 contains White Revision pages for Volumes 5 through 8 □ Arrange these groups of material next to each other so that you can take material from each group as required and proceed with the filing of this release. □ 3. Circulate the “Publication Update” among those individuals interested in the contents of this release.

FI–1 Check Remove Old Insert New As Pages Numbered Pages Numbered Done

For faster and easier filing, all references are to right-hand pages only.

VOLUME 1

Revision □ Title page...... Title page □ 16.1 ...... 16.1 □ 19 thru 20.1 ...... 19 thru 20.1 □ 31 thru 38.1 ...... 31 thru 38.1 □ 47 ...... 47 □ 61 thru 63 ...... 61 thru 64.1 □ 73 thru 75 ...... 73 thru 76.1 □ 84.1 thru 85 ...... 85 thru 86.3 □ 123 thru 149 ...... 123 thru 150.1 □ 152.7 thru 152.11 ...... 152.7 thru 152.11 □ 159 thru 160.1 ...... 159 thru 160.1 □ 169 thru 179 ...... 169 thru 180.5 □ 186.7 thru 186.17 ...... 186.7 thru 186.18(1) □ 186.32(1) thru 186.33 ...... 186.33 thru 186.34(3) □ 189 thru 199 ...... 189 thru 200.1 □ 213 thru 221 ...... 213 thru 222.1 □ 231 thru 233 ...... 231 thru 234.1 □ 243 thru 256.9 ...... 243 thru 256.10(1) □ 256.26(17) thru 256.41 ...... 256.27 thru 256.47 □ 261 thru 273 ...... 261 thru 274.1 □ 300.14(2)(g) thru 300.14(2)(y) ...... 300.14(2)(g) thru 300.14(2)(y) □ 323 thru 349 ...... 323 thru 350.1 □ 364.3 thru 364.7 ...... 364.3 thru 364.7 □ 389 thru 394.4(1) ...... 389 thru 394.4(1) □ 394.23 thru 394.24(1) ...... 394.23 thru 394.24(1) □ 401 thru 408.3 ...... 401 thru 408.9 □ 431 thru 433 ...... 431 thru 434.1 □ 445 thru 446.9 ...... 445 thru 446.9 □ 479 thru 483 ...... 479 thru 484.1 □ 495 thru 499 ...... 495 thru 500.1 □ 533 thru 535 ...... 533 thru 535 □ 551...... 551 □ 579 thru 580.10(1) ...... 579 thru 580.10(1) □ 580.18(1) thru 580.18(3) ...... 580.18(1) thru 580.18(3) □ 580.33 thru 580.37 ...... 580.33 thru 580.38(1) □ 580.47 thru 582.5 ...... 580.47 thru 580.53 □ 605...... 605 FI–2 Check Remove Old Insert New As Pages Numbered Pages Numbered Done

□ 661 thru 663 ...... 661 thru 664.1

VOLUME 2

Revision □ Title page...... Title page □ 3 thru 4.1...... 3 thru 4.1 □ 15 thru 32.3 ...... 15 thru 32.9 □ 77 thru 90.1 ...... 77 thru 90.1 □ 125 thru 127 ...... 125 thru 127 □ 147 thru 148.1 ...... 147 thru 148.1 □ 175 thru 191 ...... 175 thru 192.1 □ 197 thru 203 ...... 197 thru 204.1 □ 261 thru 277 ...... 261 thru 278.1 □ 287...... 287 □ 351 thru 366.3 ...... 351 thru 366.4(1) □ 437 thru 447 ...... 437 thru 447 □ 469 thru 471 ...... 469 thru 472.1 □ 489...... 489 □ 496.1 thru 502.5 ...... 497 thru 502.6(1) □ 519 thru 521 ...... 519 thru 521 □ 536.1 thru 538.1 ...... 537 thru 538.1 □ 549 thru 550.1 ...... 549 thru 550.1 □ 570.7...... 570.7 □ 577 thru 591 ...... 577 thru 592.1 □ 602.1 thru 602.17 ...... 602.1 thru 602.18(1) □ 613 thru 615 ...... 613 thru 615 □ 637 thru 657 ...... 637 thru 658.3 □ 667...... 667 □ 674.1 thru 674.7 ...... 674.1 thru 674.7 □ 678.3 thru 678.8(1) ...... 678.3 thru 678.7 □ 715 thru 718.1 ...... 715 thru 717

VOLUME 3

Revision □ Title page...... Title page □ 11 thru 12.1...... 11 thru 12.1 □ 29 thru 34.1 ...... 29 thru 34.1 □ 45 thru 48.1 ...... 45 thru 48.1 □ 57 thru 63 ...... 57 thru 64.1 □ 73 thru 88.7 ...... 73 thru 88.8(1) FI–3 Check Remove Old Insert New As Pages Numbered Pages Numbered Done

□ 88.19 thru 88.20(1) ...... 88.19 thru 88.20(1) □ 88.30(1) thru 88.37 ...... 88.31 thru 88.41 □ 139 thru 149 ...... 139 thru 150.1 □ 181...... 181 □ 275 thru 297 ...... 275 thru 298.1 □ 309...... 309 thru 310.1 □ 319...... 319 □ 340.1...... 340.1 □ 397 thru 405 ...... 397 thru 405 □ 459 thru 466.1 ...... 459 thru 465 □ 473 thru 474.5 ...... 473 thru 474.3 □ 485 thru 493 ...... 485 thru 491 □ 507 thru 509 ...... 507 thru 509 □ 519 thru 524.1 ...... 519 thru 524.1 □ 531 thru 532.1 ...... 531 thru 532.1 □ 549 thru 556.4(1) ...... 549 thru 556.4(1) □ 575 thru 576.3 ...... 575 thru 576.3 □ 593 thru 614.14(25) ...... 593 thru 614.14(31) □ 635...... 635 □ 651 thru 652.4(1) ...... 651 thru 652.4(1) □ 715 thru 748.2(4)(c) ...... 715 thru 748.2(4)(e) □ 751 thru 760.3 ...... 751 thru 760.3 □ 791 thru 792.1 ...... 791 thru 792.1

VOLUME 4

Revision □ Title page...... Title page □ 17 ...... 17 □ 97 ...... 97 thru 98.1 □ 105 thru 120.9 ...... 105 thru 120.9 □ 159...... 159 □ 191 thru 192.1 ...... 191 thru 192.1 □ 229 thru 249 ...... 229 thru 249 □ 267 thru 269 ...... 267 thru 269 □ 279 thru 280.1 ...... 279 thru 280.1 □ 295 thru 296.1 ...... 295 thru 296.1 □ 303...... 303 thru 304.1 □ 325 thru 343 ...... 325 thru 344.1 □ 379...... 379 thru 380.1 □ 479...... 479 □ 577 thru 579 ...... 577 thru 580.1

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Revision □ Title page...... Title page □ 1...... 1 thru 2.1 □ 14.1 ...... 14.1 □ 25 ...... 25 □ 36.1 thru 41 ...... 37 thru 43 □ 59 thru 63 ...... 59 thru 63 □ 79 thru 80.1 ...... 79 thru 80.1 □ 119 thru 121 ...... 119 thru 121 □ 149 thru 157 ...... 149 thru 155 □ 191 thru 199 ...... 191 thru 199 □ 219 thru 225 ...... 219 thru 225 □ 239...... 239 thru 240.1 □ 265 thru 266.1 ...... 265 thru 266.1 □ 373 thru 374.1 ...... 373 thru 374.1 □ 391...... 391 thru 392.1 □ 413 thru 428.1 ...... 413 thru 428.3

VOLUME 6

Revision □ Title page...... Title page □ 1 thru 4.1...... 1 thru 4.1 □ 13 ...... 13 □ 22.1 thru 23 ...... 23 □ 413 thru 414.1 ...... 413 thru 414.1 □ 481 thru 483 ...... 481 thru 484.1 □ 513 thru 528.1 ...... 513 thru 528.1 □ 583 thru 585 ...... 583 thru 586.1 □ 657 thru 658.3 ...... 657 thru 658.3 □ 709...... 709 thru 710.1 □ 869 thru 876.1 ...... 869 thru 876.3

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VOLUME 7

Revision □ Title page...... Title page □ TC-1 thru TC-251 ...... TC-1 thru TC-265 □ I-1 thru I-85 ...... I-1 thru I-85

VOLUME 8

Revision □ Title page...... Title page □ 3...... 3 □ 19 thru 68.3 ...... 19 thru 68.9 □ 73 thru 80.1 ...... 73 thru 80.1 □ 91 ...... 91 thru 92.1 □ 117...... 117 thru 118.1 □ 127 thru 158.3 ...... 127 thru 158.5 □ 177 thru 181 ...... 177 thru 182.1 □ 191 thru 217 ...... 191 thru 218.3 □ 229 thru 230.5 ...... 229 thru 230.5 □ 235 thru 251 ...... 235 thru 252.3 □ 287 thru 293 ...... 287 thru 294.1 □ 305 thru 310.1 ...... 305 thru 310.3 □ 319...... 319 thru 320.1 □ 327 thru 356.1 ...... 327 thru 356.7 □ 361 thru 371 ...... 361 thru 372.1 □ 381 thru 410.1 ...... 381 thru 410.7 □ 417...... 417 thru 418.1 □ 425 thru 427 ...... 425 thru 427 □ 443 thru 445 ...... 443 thru 446.1 □ 457 thru 475 ...... 457 thru 476.1 □ 482.3 thru 497 ...... 482.3 thru 498.1 □ 513 thru 537 ...... 513 thru 537 □ 543...... 543 thru 544.1 □ 559...... 559 thru 560.1 □ 569 thru 576.3 ...... 569 thru 576.3 □ 579 thru 589 ...... 579 thru 590.1 □ 607 thru 611 ...... 607 thru 612.1 □ 626.3 thru 677 ...... 626.3 thru 678.9 □ 683 thru 707 ...... 683 thru 707 □ 727 thru 736.5 ...... 727 thru 736.5

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Copyright © 2020 Matthew Bender & Company, Inc., a member of the LexisNexis Group. Publication 820, Release 55, October 2020 LexisNexis, the knowledge burst logo, and Michie are trademarks of Reed Elsevier Properties Inc., used under license. Matthew Bender is a registered trademark of Matthew Bender Properties Inc.

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