Statute of limitations: Discovery Rule Exception Oil and Gas Lease: Express Development Clause Fraud: Intent to Induce Reliance

摘要

The Miesches and two other families (collectively the Miesches), are mineral owners on several thousand acres of land near Refugio, Texas. In the 1950s, Humble CHI & Refining Co., a predecessor in interest to Exxon Corp., begins to acquire oil and gas leases from the mineral onwers under four separate, but similar, leases that require Exxon to pay an atypical royalty of fifty percent Exxon drills 121 wells and produces oil and gas that results in the payment of more than $43 milllion in royalties to the Miesches. Beginning in the early 1970s, Exxon unsuccessfully seeks to re-negotiate the royalty percentage because profitability of the operations was declining. By 1989 Exxon had begun to plug some of the wells remaining on the leases, and by 1991, Exxon had completed the plugging and abandoning of the wells. After plugging each well, Exxon files a plugging report with the Texas Railroad Commssion. In 1993, after Exxon's leases terminated, the royalty owners enter into a new lease agreement with a company whose name is eventually changed to Emerald Oil & Gas Co., L.R In deciding whether to lease the land, Emerald reviews the well plugging reports Exxon had filed with the Railroad Commission. The reports indicate Exxon properly plugged the wells, but Emerald encounters problems upon trying to re-enter the plugged wells, including wellbores with cut casings and other "junk" in the wellbores and plugs in locations other man those listed on the Railroad Commission reports.