The issue of subsurface trespass is of great relevance in the State of Texas. When Texas courts have been presented with these cases, the primary questions are 1) has there been an actionable subsurface trespass, and 2) what is the proper remedy?
While issues of subsurface trespass have been adjudicated before the Supreme Court of Texas dating back to 1950, such issues have become both more important and more nuanced with the rise of horizontal drilling.
In Lightning Oil Company v. Anadarko (Tex. 2017), the Supreme Court of Texas was presented with facts in which a subsurface trespass occurred for the purposes of drilling on an adjacent tract. The Court found the trespass to be lawful.
The dispute in the case arose out of mineral leases on adjoining tract of lands. Briscoe Ranch, Inc., (“Briscoe”), owned the surface rights on the tract of land where Lightning Oil Company, (“Lightning”), executed a mineral lease with the mineral estate owner, the Hurd Family. Anadarko E&P Onshore, LLC, (“Anadarko”) executed a mineral lease with the State of Texas on the Chaparral Wildlife Management Area, which was the adjoining tract of land to the Briscoe Ranch property. Anadarko’s lease with the state had several restrictions, which included: “Drilling locations will be established off the Chaparral… when prudent and feasible. Any drilling site locations on the [Chaparral] must be planned and authorized by [TPWD’s Chaparral area] manager.” Due to this restriction in their lease Anadarko entered in to a Surface Use and Subsurface Easement Agreement with Briscoe Ranch, Inc. Anadarko planned to locate well pads on the Ranch and drill through Lightning’s lease to get to the Chaparral minerals. Lightning Oil objecting to the drilling plan, despite the fact that there would be no perforations on their lease.
The Court emphasized that ownership of property is not paired with an absolute right to exclude. Additionally, the Court reiterated that the surface owner, not the mineral owner, “owns all non-mineral molecules of the land, i.e., the mass that undergirds the surface estate.” Lightning’s mineral lease gave them the right to develop the land and an actionable trespass only occurs if this right is impeded. The Court concluded that Anadarko’s drilling program would not significantly affect their rights under the lease. Additionally, while the Court acknowledged that small amounts of the mineral estate would be lost, it would be negligible compared to the benefit of minimizing waste.
The accommodation doctrine was also employed as an argument for Anadarko’s drilling. Because Anadarko was the assignee of Brisco, the surface owner, their drilling program was considered a surface use for purposes of the accommodation doctrine. Lightning was required to reasonably accommodate the “surface use” and Lightning was unable to prove that their mineral interest was significantly affected.
The Take Away
While this case may stand out for its partial reliance on the accommodation doctrine, the Court firmly reiterates the rule that a mineral owner does not have exclusive rights to the mass beneath the surface. Rather, the mineral owner, or lessee, has a sole right to the minerals. This case is significant because it is another example of the Supreme Court’s practicality in oil and gas issues. While technically there was a taking of an insignificant amount of minerals, the Court weighed the need to efficiently develop minerals and prevent waste.
Absent a trespass with a true conversion of the minerals, mineral owners and lessees do not have an absolute right to exclude others from drilling through the subsurface.