Legal Updates

Underground Rights are Defined in Texas

     On August 19, 2015 the Fourth District Court of Appeals in San Antonio, Texas, ruled that, because the surface estate owner controls “the matrix of the underlying earth,” it could grant an oil and gas operator the right to site wells on the surface owner’s property and drill through the earth within the boundaries of the surface owner’s property to reach adjacent minerals.

     In Lightning Oil Co. v. Anadarko E&P Onshore LLC, Case No. 04-14-00903, Lightning Oil sued Anadarko to prevent it from locating an oil and gas well on land subject to Lightning’s oil and gas lease. In 2009 Lightning leased the Briscoe Ranch from the owner of the mineral estate. Later, Anadarko obtained a surface use agreement from the owner of the Briscoe Ranch surface estate. Anadarko planned to place drilling rigs on the Briscoe Ranch, drill into an adjacent tract and complete the wells in an adjacent tract where it owned an oil and gas lease. Anadarko was not going to test or complete the well in the Briscoe Ranch tract. In the lawsuit Lightning Oil asserted that it had exclusive rights to drill through the Briscoe Ranch tract. Both the trial court and the appeals court, however, found that absent an express grant to the mineral owner, the surface owner controls the earth beneath that tract.

     This issue has not been directly addressed in Colorado, Utah or Wyoming. Wyoming’s statutes, however, provide that ownership of all pore space below the surface is vested in the owner of the surface estate. A conveyance of the surface estate in a tract of land shall be a conveyance of the pore space below the surface of that tract of land although the owner of the mineral estate has the right to inject substances to facilitate production of minerals. And no agreement conveying mineral or other interests underlying the surface shall act to convey ownership of any pore space in that tract unless the conveyance explicitly conveys that ownership interest. Although this Wyoming law was passed in 2008 with the intent of clarifying ownership of pore space underlying the surface, it indicates a legislative intent that the surface owner rather than the mineral owner controls at least some of the rights underneath a tract of land.