A Texas appeals court says an Apache Corp. drilling rig was wrongly forced off a West Texas oil lease in a squabble over whether wells had stopped producing oil and gas.
The Court of Appeals of the Eighth District of Texas in El Paso ruled in favor of Apache Deepwater LLC in its suit against Double eagle Development LLC. The suit was filed in a fight over competing claims to the mineral rights on 640 acres in Reagan County.
The legal fight stemmed from the 1975 leasing of land for a 3-year period during which Apache’s predecessors drilled and brought four wells into production. Eventually, the wells on three of the four 160-acre units ceased to produce. But the remaining well continued production until 2010. Since Apache did not develop new wells on the three of the four units, the property owner signed leases with Double Eagle Development LLC. That’s where the fight began.
Apache contended it still owned the rights to the disputed tracts. The appeals court ruled this week “the lease remained in effect as to all 640 acres because of the plain language of the retained acreage clause did not provide for the “rolling” termination of proration units.”
In the end, the appeals court said the lower court was wrong to force Apache from the land.
