» Texas Oil and Gas Lease Dispute Catches Landowner in Legal Trap

Texas Oil and Gas Lease Dispute Catches Landowner in Legal Trap

A recent Texas oil and gas appeals case taught a hard lesson to an unsuspecting landowner. In Aston Meadows v. Devon Energy, Aston Meadows had purchased approximately 182 acres in Tarrant County. Unknown to them, Devon Energy held an oil, gas, and mineral lease that encumbered hundreds of acres of land in a tract that spanned Tarrant and Wise Counties and included the property Aston Meadows had purchased. Devon’s lease was originally recorded only in Wise County in 1977. Aston had purchased the land in Tarrant County for a residential development in 2001.

When Aston Meadows bought the land, no oil and gas production was occurring. But in 2007, they sued Devon and its parent company for allegedly drilling horizontally under their property. Aston claimed that Devon’s lease was invalid because it was not recorded in Tarrant County’s records. Aston claimed they were owed damages for trespass, conversion, breach of contract and unpaid royalties, and that they were entitled to injunctive relief.

The Texas Property Code generally provides that a property transaction is properly recorded when it is recorded in the county wherein a “…part of the property is located”. This thereby gives notice to everyone of “…the existence of the instrument”. When a piece of land crosses multiple counties, if a transfer involving that land is recorded in either county, it is usually deemed sufficient constructive notice to all persons of the transfer.

Since the lease owned by Devon Energy spanned two counties and was recorded in one of them, the appellate court affirmed the trial court’s judgment in Devon’s favor.

Oil and gas disputes can be complex. They involve precious land assets and may turn on intricate issues of title. Aston Meadow’s title policy did not show the lease as an encumbrance. Nevertheless, Aston lost their case. This case illustrates why it is crucial to have a knowledgeable and experienced Texas oil and gas attorney in your corner if you are dealing with an oil company or involved in an oil and gas dispute.

Gregory D. Jordan is an Austin oil and gas attorney, Austin oil and gas litigation attorney, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.

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