Royalty owners ask Texas Supreme Court to allow lawsuit to proceed against Exxon Mobil | The Law Offices of Gregory D. Jordan

Royalty owners ask Texas Supreme Court to allow lawsuit to proceed against Exxon Mobil

Royalty owners have asked the Texas Supreme Court to allow litigation to move forward in their $21 million royalty lawsuit against Exxon Mobil after a new trial was granted on appeal.

The royalty owners accuse Exxon of falsely informing them that the productivity of their wells was diminishing. This allegedly caused them to sell the oil and gas interests to a different buyer for less than their true value.

The dispute has been in litigation since 1996, having already reached the Texas Supreme Court in 2009 on different issues.

The royalty owners claim that they relied on false statements by Exxon about the value of the wells when they sold the leases to another company at a reduced rate. According to the royalty owners, Exxon claimed that the wells had only two years of production left, when in reality, they had 12. When the royalty owners refused to accept less than the 50 percent royalty rate they had previously received, Exxon canceled its leases. According to court records, the royalty owners later sold their interests to another party for a 30 percent royalty rate.

Exxon argues that because the royalty owners denied Exxon’s statements about the diminished productivity of the wells, the statements could not have influenced their later decision to sell to another company at a lower price.

The royalty owners argue that Exxon is raising new arguments at too late a stage in the litigation. Furthermore, they claim, the company is relying on evidence that was not originally presented to the trial court, including evidence supporting the argument that Exxon’s representations were only opinions — and therefore should not have been relied upon by the royalty owners.

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