Oil and Gas Operator Liability Addressed in Recent Texas Supreme Court Rulings

April 27, 2009

The Texas Supreme Court has issued two important and related opinions affecting mineral owners and their lessees. In Exxon Corporation v. Emerald Oil & Gas Co., L.C.,2  the Court held that a private cause of action may be maintained under Section 85.321 of the Texas Natural Resources Code for damages resulting from a violation of conservation statutes or Texas Railroad Commission rules, but limited the class of parties with standing to sue under the statute. In Exxon Corporation v. Emerald Oil & Gas Co., L.C. and Laurie T. Miesch, et al,3  the Court interpreted the meaning of a continuous development clause, clarified the intent-to-induce element of fraud when the alleged misrepresentations are in reports filed with the Railroad Commission, and addressed the discovery rule on the accrual of a tort cause of action.

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