TEXAS - OIL & GAS

摘要

ExxonMobil Corp, v. Valence Operating Co., 174 S.W.3d 303 (Tex. App.--Houston [1st Dist.] 2005, pet. filed), illustrates the potential hazard in ignoring, as parties to joint operating agreements frequently do, the agreement's maintenance of uniform interest provision. ExxonMobil and Valence were parties to a 1983 operating agreement governing the operation of an oil and gas lease in Gregg and Upshur Counties, Texas, known as the Gladewater Gas Unit No. 16, ExxonMobil owning 81.8 percent of the contract area and Valence the remaining 18.2 percent. Three wells produced gas from the Cotton Valley Lime. Data derived from the drilling of the wells indicated that there were also recoverable gas reserves in the shallower Cotton Valley Sand. In 1996 ExxonMobil entered into a farmout agreement with Wagner & Brown, Ltd. and C.W. Resources, granting the farmees the right to earn an assignment or assignments by drilling and completing wells in the nonproductive Sand interval. Acting under the farmout agreement, Wagner & Brown and C.W. proposed two wells to Valence. Valence did not respond to the proposals, although it made inquiry to ExxonMobil and learned of the farmout. Not having elected to participate in drilling the two Sand wells, Valence was deemed under provisions of the operating agreement to have relinquished its interest in the wells until the farmees that drilled them had recouped out of Valence's share of production the nonconsent penalty of 300 percent of Valence's share of the drilling and completion costs and 100 percent of its surface equipment costs. When the farmees proposed three more wells to Valence, it elected to participate "under protest."