Texas Journal of Oil, Gas and Energy Law
According to the Texas Supreme Court, a lessor’s interest remains pooled even after her lease terminates. The Court’s November 2008 opinion in Wagner & Brown, Ltd. v. Sheppard provoked strong reactions among oil and gas law practitioners, academics, and others involved in the industry. In fact, the court received nearly a dozen amicus curiae briefs signed by more than 20 attorneys—many of whom typically represent producers—urging it to reconsider. Not persuaded by these concerns, the court finalized its opinion on June 5, 2009. So now the question for players in the oil patch is: What hath Wagner & Brown, Ltd. v. Sheppard wrought? This question is further discussed and suggestions for addressing the aftermath are discussed.
Although Sheppard joins a long line of cases in which the Texas Supreme Court adopted producers’ legal arguments in oil and gas lease disputes, it injects unprecedented uncertainty into Texas oil and gas jurisprudence. Rather than discourage litigation, the opinion encourages parties to pursue disputes in court since it called into question principles and practices previously considered settled. Therefore, for years to come attorneys, producers, title examiners, financial institutions, mineral owners, and other stakeholders in the oil and gas industry will grapple with the unfortunate legacy of Wagner & Brown, Ltd. v. Sheppard.
Laura H. Burney, The Texas Supreme Court and Oil and Gas Jurisprudence: What Hath Wagner & Brown v. Sheppard Wrought?, 5 Tex. J. Oil Gas & Energy L. 219 (2009).