December 5, 2014

Cline Shale Boom in Texas

When the news discusses Texas’ big oil and gas shale plays, they usually mean the Eagle Ford and the Barnett shale. The University of Texas at San Antonio produced a study recently, the “Economic Impact of Oil and Gas Activities in the West Texas Energy Consortium Study Region”, that highlights the opportunities in the Cline shale.

clineshalegraphic.jpg The study estimates that by 2022 the Cline shale will bring more than 30,000 jobs to west Texas and have a $20 billion dollar economic impact. The Cline shale covers less surface area than the Eagle Ford or Barnett, but its hydrocarbons are denser. There is a potential for 3.6 million barrels of oil per square mile to be recovered, for a total of about 30 billion barrels. These numbers indicate that the Cline shale may be larger than both the Eagle Ford and the Bakken field in North Dakota. In fact, the Cline shale may be bigger than both those two plays combined.

The study was done by the Center for Community and Business Research, part of the Institute for Economic Development at UTSA. The study notes that in 2012 $14.5 billion was added to the west Texas economy by oil and gas development and 21,450 full time jobs were created from the oil and gas industry in west Texas. These employees received $1 billion was paid in salaries and benefits in 2012 alone. The study estimated that about 854 vertical wells and 57 horizontal wells were completed in 2012 in this region. The goal of the study was to create a 2012 baseline of industry activity in the region and create forecasts through 2022. “This baseline study is intended to help communities in West Texas plan and prepare for the prospect for increased oil and gas production in the area down the line. For many counties, activity is clearly in the early stages,” said Thomas Tunstall, the research director for this study.

The oil and gas industry is taking notice of this data. For example, Taylor Consulting, Inc . is acquiring land near the Cline shale based on expectations that this may be the biggest oil and gas boom in U.S. history. And Taylor is not alone--substantial increases in new business and residents is expected. Taylor is building temporary housing, infrastructure and entertainment amenities.

Mineral owners in the Texas counties within the Cline shale have been and will be getting lease offers. Please don't sign anything without getting a review by an oil and gas attorney.

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November 25, 2014

Texas Railroad Commission Approves Revised Oil & Gas Pipeline Rule

The Texas Railroad Commission approved a substantial amendment to its oil and gas pipeline permit rule on December 2, 2014, and the amendment has major significance for Texas landowners and Texas mineral owners. The rule is Texas Railroad Commission Rule 3.70, and the amended rule goes into effect on March 1, 2015.

The Railroad Commission received a substantial amount of written comment from individuals, oil companies and trade organizations. Comment and testimony was also received at the public hearing on the proposed amendment held in Austin, Texas on September 22, 2014. The amended Rule 3.70 and the discussion of public comments by the Commission's General Counsel can be accessed here.

The amended Rule 3.70 provides that each operator of a pipeline or gathering system (other than production lines or flow lines that are general confined to the leased premises) must obtain a permit from the Commission and renew the permit annually. The permit application must now include the following:

1. the contact information for the person who can respond any questions concerning the pipelines construction, operation or maintenance;

2. the requested classification and the purpose of the pipeline as a common carrier, a gas utility or a private pipeline;

3. a sworn statement from the permit applicant that provides the pipeline operator’s factual basis in support of its requested classification and purpose, including, if applicable, attestation to the applicant’s knowledge of the eminent domain provisions in the Texas property code and the Texas Landowners Bill of Rights published by the Texas Attorney General;

4. documentation to provide support for the classification and purpose being sought for the pipeline and any other information requested by the Commission.

The memorandum to the Railroad Commission from its General Counsel on November 25, 2014, (which you can read here), summarizes many of the written and verbal comments about the proposed amended rule. Many commentators wanted the Commission to take a more active role in the route of a pipeline and in the determination of whether a pipeline was a common carrier pipeline or not. In Texas, whether a pipeline is a common carrier pipeline is hugely important. A common carrier pipeline has the right of condemnation (or “eminent domain”) if they cannot reach a pipeline easement agreement with the landowner. Other types of oil and gas pipelines do not have this power.

The comments in the memorandum by the Railroad Commission General Counsel make clear that the Commission does not believe it has authority to adjudicate whether a pipeline is a common carrier or not. The memorandum also notes that the Railroad Commission has no authority over the routing of a pipeline nor do they have authority to become involved in private property rights, including pipeline easement negotiations.

On the other hand, the amended rule provides that the Railroad Commission will make a determination of the “sufficiency” of the information provided with the permit application. What will constitute “sufficient” documentation of common carrier status remains to be seen. In addition, the Commission's press release about the amendment states that: "Texas Railroad Commissioners have unanimously adopted pipeline permit rule amendments designed to clarify how a pipeline operator may be classified by the Commission as a common carrier." That statement makes it sound as if the Commission is making a "common carrier" determination!

Readers may recall that in 2012, the Texas Supreme Court, in the case of Texas Rice Partners Ltd. vs. Denbury Green Pipeline, 363 S.W.3d 192, held in part that the fact that a pipeline permit applicant checked a block on the permit application that indicated that it was a common carrier pipeline did not in fact make the pipeline a common carrier line. That case is still good law. The amendment to Rule 3.70, while not providing for a forum or process for determination of whether a pipeline is a legitimate common carrier or not, will still be helpful to landowners who are negotiating a pipeline easement. The information that the Railroad Commission requires a pipeline operator to supply with its permit application should be the first thing that a landowner or their oil and gas pipeline attorney looks up when negotiating a pipeline easement.

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November 14, 2014

Important Gas Royalty Case for Texas Mineral Owners

Recently the Fifth U.S. Court of Appeals issued an interesting decision in the case of Warren et al. v. Chesapeake. This very important case for Texas mineral owners is based on a lawsuit against Chesapeake Exploration for what the Plaintiffs claimed was the wrongful deduction of post-production costs from the Plaintiffs' gas royalty payments.

The Facts

The Warren case involves three oil and gas leases in Texas. Charles and Robert Warren entered into leases with FSOC Gas Co. Ltd. Those leases were then assigned to Chesapeake, who used an affiliate, Chesapeake Operating, to drill and operate the wells. Chesapeake deducted post-production costs from the royalty payments to the Warrens as well as from royalties to Abdul and Joan Javeed who joined the case as plaintiffs later. Chesapeake claimed that the leases authorized the deductions. The Plaintiffs asserted that Chesapeake breached the leases because the deductions did not comply with the lease provisions on calculating royalties. The complaint also included class action allegations on behalf of other royalty owners with similar leases with Chesapeake Exploration.

The U.S. District Court Proceedings

The Plaintiff based their claim in part on the previous decisions of the Texas Supreme Court in Heritage Resources, Inc. v. NationsBank and Judice v. Mewbourne Oil Co.. The District Court dismissed the claims of all four Plaintiffs with prejudice. That court held that since the leases contained “at the well” royalty provisions, Chesapeake was authorized to make post-production deductions in determining the income on which royalties would be based despite the provisions in the Warren leases that the royalty would be free of certain post-production costs.

The Fifth Circuit Decision

The Plaintiffs appealed their case to the Fifth Circuit Court of Appeals. The Warrens claimed that their leases contained two sets of obligations owed by Chesapeake. The first involved the costs of exploration, production and marketing of gas, including the costs of compression, dehydration, treatment, and transportation. The second are shared obligations such as costs incurred subsequent to production. The Warrens claimed the deducted expenses fell under the first set of obligations and so were the obligation of Chesapeake alone. The Fifth Court of Appeals did not agree with this argument and upheld the District Court’s dismissal with prejudice on this issue. The Fifth Circuit held that the language of the lease expressly provides that the lessor will bear a proportionate part of the expenses of delivering marketable gas to a sales point other than the mouth of the well.

The next issue the Court addressed concerned the leases of both the Warrens and the Javeeds. The Javeeds lease contained differently worded royalty provisions than the Warren leases, but the appellate briefs to the Court focused on the Warrens’ leases, not addressing the differing provisions. The District Court had treated the Javeeds leases as “functionally equivalent” to the Warrens. For the first time in the reply brief before the Fifth Circuit the Plaintiffs addressed the differences, but these arguments were waived because they were asserted too late. The Fifth Circuit determined that the Javeeds claim should be dismissed without prejudice anyway because it was apparent from the face of the complaint and its attachments that they could not conceivably state a cause of action.

This case illustrates that language in oil and gas leases concerning the calculation of royalty can be technical and complicated. It is essential for a mineral owner to fully understand the terms of an oil and gas lease and what may or may not be deducted from royalties before it is signed. Take the time to consult an attorney before signing. It will save money and stress later.

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November 7, 2014

More New Oil and Gas Pipelines for Texas Counties

New oil and gas pipelines are being constructed in Texas at an almost frantic pace. Just this week, Lone Star NGL LLC announced that it has received the go-ahead from its board to lay a new natural gas liquids pipeline from the Permian basin in West Texas to Mont Belvieu, Texas near the Gulf of Mexico. Lone Star is a joint venture formed by Energy Transfer Partners LP and Regency Energy Partners LP. Both companies have headquarters in Dallas, Texas.

The new pipeline will extend for 533 miles and will be both 24 inches and 30 inches in diameter. The exact route has not been announced but possible routes will probably be from the Permian basin area shown on the map in green and the Gulf of Mexico. As you can see from the map, this new line has the potential to impact many Texas counties and also to effect many Texas landowners.permianbasincounties.jpg

Pipeline easements are complex documents. A landowner may have to live with the easement the sign for the rest of their life time and for the duration of their descendants’ lifetimes as well. There are many things a landowner can require in a pipeline easement or right-of-way that the pipeline company is simply not going to offer you. You have to know how to ask for them and how to negotiate for them.

If your property is important to you, then when the land man for the pipeline company contacts you, tell them that you will be happy to discuss an easement or right-of-way with them, and that you will have your attorney contact them. Unless you are experienced in Texas pipeline easement and right-of-way law, you can do yourself and your property a lot of harm by signing something without getting the assistance of an experienced attorney first.

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November 7, 2014

Community Engagement Guidelines for Oil and Gas Companies

After three years of meetings and study, the American Petroleum Institute issued a new set of guidelines for community interaction by oil and gas operators involved with unconventional oil and gas exploration. The document is called “Community Engagement Guidelines” and outlines recommendations for oil and gas development consistent with the concerns and priorities of the community where the development is taking place.

API’s Standards Director David Miller said that “(i)t’s a first-of-its-kind industry standard for community engagement. These guidelines will provide a road map for oil and gas operators seeking to build lasting, successful relationships with local residents in areas of the country where energy development opportunities are open for the first time, thanks to advances in horizontal drilling and hydraulic fracturing.”

The industry is trying to be a “good neighbor” and use responsible practices, learn from past experiences, mitigate potential impacts and work towards long term sustainability, according to Mr. Miller. He said “(e)ach community is different, and the standards are not designed to be exhaustive, but rather to serve as a reference for developing a plan-of-action that matches the needs and concerns of a broad range of stakeholders—from rural farmers to indigenous tribes.”

The API Community Engagement Guidelines are similar to existing guidelines for the pipeline and railroad industries. API stressed that these Guidelines were not developed as a reaction to communities trying to restrict fracing or oil and gas development. Karen Moreau, the New York State Petroleum Council’s Executive Director, said: “We’re not here to mirror environmental groups’ activities. Our member companies spend their time developing technologies and improving production to make their operations better. We don’t take our cues from environmental groups that apparently aren’t held to the same standards we are. Many of the bans in New York are in towns where there are no prospects for development. We’ve been engaging with communities where it looks more likely.”

The Guidelines are divided into five phases. During the entry phase, where companies determine energy extraction potential, the companies are “encouraged to introduce key personnel to local leaders, share information on safety commitments and operational goals, and set professional standards for local employees and contractors.” During the exploration phase, there should be dialogue and education through community meetings and discussions. In the development phase, “companies are urged to work with local emergency responders to prepare against any potential risks” and to develop relationships with mineral owners. In the operations phase, long-term standards for maintenance and traffic should be implemented, and a public feedback mechanism is also recommended. The fifth and final phase is the exit phase, during which “ is recommended that (the oil companies) engage with the community regarding plans for reclamation and restoration, and prepare stakeholders for the transition.”

Mr. Miller noted that “As with all our standards on hydraulic fracturing, API’s Global Industry Services division will work hand-in-hand with industry participants to educate operators on the successful deployment of engagement strategies.”

The proof, as they say, is in the pudding. While there have always been oil and gas companies in Texas who have treated mineral and surface owners with respect, there also have always been those whose arrogant attitude and disrespect is legendary. I suspect that these Guidelines may not have a substantial impact on the behavior of either group. However, for oil companies who are just getting into the development of unconventional resources, these Guideline should be useful. In addition, for persons in communities in which development of unconventional (or conventional) oil and gas resources is taking place, the Guidelines offer an articulate expression of what is reasonable to expect from the oil or gas company in their area.

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October 31, 2014

Hackers Target Oil and Gas Companies

There is a threat to oil and gas companies that seems to have been under the radar so far, and that threat is hackers. It is a problem that can effect oil and gas companies and also energy investment firms. Nicole Perlroth at the New York Times published an article earlier this year on the issue of Russian hackers that you can read here. The author indicates that Russian hackers have been “systematically targeting” hundreds of different oil and gas companies and investment firms in the West.

disc-smashed-by-hammer-1-1418171-m.jpg Ms. Perlroth quotes researchers in the cyber security field who say the motive for these Russian cyber attacks is industrial espionage, given Russia’s important domestic oil and gas industry. She refers to research by a number of computer security companies: CrowdStrike, Symantec and F-Secure, regarding the severity of the problem.

The damage so far pales compared to the potential damage. As the oil and gas industry turns more and more to digital solutions for exploration, drilling and production, they become increasingly vulnerable.

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October 24, 2014

Gas Royalties Case Decided by Texas Supreme Court

As readers of this blog know, we have been following the case of Marcia Fuller French, et al. v. Occidental Permian Ltd., which is an important Texas case involving gas royalties. You can read our previous blog post here. The case was heard by the Supreme Court of Texas on February 5, 2014 and the The Texas Supreme Court has issued its decision.

As you may recall, Martha Fuller French and the other Plaintiffs were royalty owners and lessors on two oil and gas leases in Scurry County and Kent County, Texas. One lease is referred to in the decision as the “Fuller Lease”, which was executed in 1948, and the other lease is referred to as the “Cogdell Lease”, which was leased 1949.

In 2001, Occidental Permian began injecting wells on these leases with carbon dioxide to boost oil production. As a result, the natural gas produced from these leases contained about 85% carbon dioxide. Occidental then treated the gas to remove the carbon dioxide and sold the remaining gas, sending the carbon dioxide back to be reused at the well. Occidental paid Ms. French and the others royalties on the gas after it was treated and then deducted treatment costs from the royalties.


In Texas, the general rule, which can be modified by the language in a lease, is that royalties are not subjected to the costs of production, but are usually subjected to post-production costs, including taxes, treatment costs to render the hydrocarbons marketable, and transportation costs. Ms. French and the other Plaintiffs claimed that they should have received royalties on all gas produced, that Occidental should not have deducted post production costs, and since these costs were deducted from their royalties, they were underpaid by Occidental. The trial court agreed with them and awarded them $10.5 million in compensation. The case then went to the Texas Court of Appeals in Eastland, Texas, which overturned the judgment of the trial court and vacated the $10.5 million award.

In the Texas Supreme Court, the principal issues were: 1) whether the gas should be valued in its original state, before extraction from the well, or at the wellhead where it is commingled with carbon dioxide; 2) whether removing, compressing, and transporting carbon dioxide should be classified as a production operation; and 3) whether carbon dioxide removal off site for reuse is a production operation.

In a decision written by Chief Justice Nathan Hecht, the Texas Supreme Court affirmed the decision of the Court of Appeals. The decision held that carbon dioxide removal is a post-production expense that royalty owners share with the field operator. In the leases in this case, the Plaintiffs gave Occidental the right and discretion to decide whether to reinject or process the casinghead gas (which is gas produced with oil in oil wells, which is different from gas produced in a gas well) and since the Plaintiff royalty owners benefited from that decision, the royalty owners must share the cost of carbon-dioxide removal. The Court pointed out that the Fuller Lease specifies that the cost must be considered when determining the market value of the gas, and it is this figure that the royalty is based on. The Cogdell Lease provided that the cost of off-site manufacturing of the natural gas liquids and residue gas is deducted from royalties.

This decision contains two important lessons. First, an oil and gas lease may last for decades. Secondly, whether or not costs are deducted from your royalties can make a substantial difference in the amount of your royalty check. This case illustrates once again how critical it is to have an experienced oil and gas attorney review the fine print before you sign an oil and gas lease.

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October 17, 2014

Texas Oil Prices are Dropping

The price of crude oil has been continuing to fall over the last few days. By some benchmarks, crude oil prices in Texas and globally are near to a four year low. For example, West Texas Intermediate (“WTI”) was recently reported at $81.84 per barrel, well below the $100 to $120 per barrel evident more recently. In fact the WTI price closed down 4.77% recently, which is a substantial decrease. The current Brent Crude Oil price of $85.04 represents a decrease of $3.85 or 4.53%.

What is happening here? For many years in the past, conflict in the Middle East caused prices to increase. Currently, due certainly to the advances of ISIS but also because of other factors, the Middle East is in great turmoil, yet prices are sliding. Probably the general and economic malaise in this country has a lot to do with the slide in oil prices. Although the federal government minions feed us sound bites about how the economy is doing better, people out here in flyover country know better. Recently, President Obama touted the decreased unemployment rate. What he does not say, however, is that so many people who want to work have left the workforce that the resulting unemployment rate looks artificially better. Not only is the poor economic condition of our country a factor, the incredible threat of an Ebola epidemic, with its potentially catastrophic personal and economic consequences, is also playing a part.

Lower crude oil prices mean that gasoline is cheaper at the pump. However, there are some major negative impacts. For one thing, if the price of oil stays down below a certain level, oil exploration and production will decrease. Oil wells that can make a profit when oil is $100 per barrel may be losing money when oil is $85 per barrel and those wells may be plugged. Additionally, most of the oil and gas exploration in this country is done by small, independent oil and gas companies. When the price of oil declines, the smaller companies, with smaller capital reserves than the large oil companies, can no longer afford exploration activities. Taken together, both these reasons result in a decrease in domestic production of oil which results in larger imports from unstable countries in the Middle East

On a more personal level, lower oil prices and decreased exploration and production means that the many people who depend on oil and gas royalties to live on are going to need to tighten their belts. The vast majority of royalties go to individuals, not corporate conglomerates. For many of these individuals, the royalties constitute retirement income that is a necessary supplement to meager Social Security payments. For everyone in this situation, the lower prices are truly not good news.

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October 10, 2014

Fracing of Oil and Gas Wells Explained

The Real Estate Center at Texas A & M University has recently made available an educational video entitled "Inside Fracking" that explains the process of fracing oil and gas wells. (I still believe the correct spelling is "fracing"). You can access the video here. If you are wondering just what fracing is and why it is used, this video offers some clear explanations.

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October 3, 2014

Expansion of Shale Gas Facilities in Texas Gulf

It's good news for Texas mineral and royalty owners that oil and gas production in Texas is increasing, due in large part to the spike in natural gas production from shale reservoirs. It's also good news that plants that use that gas are being built.

For example, ExxonMobil Corporation is expanding its capacities on the Gulf of Mexico coast after EPA’s finalization of their permit on May 14, 2014. In Baytown, Texas, Exxon has begun work on a multibillion dollar expansion of their refining and petrochemical infrastructure to process shale-derived natural gas into plastics and other products. They plan to construct something called an ethane cracker, which is a facility in which complex organic molecules such as kerogens or heavy hydrocarbons are broken down into simpler molecules such as light hydrocarbons. The cracker will be able to process 1.5 million tons of gas per year and make ethylene stocks available for downstream chemical processing. The downstream facilities include an Exxon plastic plant in Mont Belvieu, Texas which processes 650,000 tons per year in two high performance polyethylene facilities. Ethylene is processed into polyethylene, which is a basic plastic that is used to make bags, bottles and other products.

In Mont Belvieu, Mitsubishi Heavy Industries is going to build the two polyethylene facilities. The Baytown olefins plant has also awarded contracts to Linde Engineering North America Inc. and Bechtel Oil, Gas & Chemicals Inc. to build olefin recovery units. Mitsui Engineering & Shipbuilding Co. Ltd. and Huertey Petrochem SA are building the olefin furnaces.

Construction will begin immediately and production is expected to commence in 2017, according to a statement by Exxon. Steve Pryor, head of ExxonMobil Chemical Co., said, “Shale development has provided U.S. chemical producers a double benefit as an energy source and as a key raw material to make plastics and other essential products, creating jobs and economic activity across the value chain.”

When there is an increased market for gas produced in Texas such as the Exxon plants described above, the incentive for oil and gas companies to continue to explore, drill for and produce gas increases. That in turn means more royalty payments and higher income to Texas mineral owners and royalty owners.

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September 26, 2014

Texas Property Owners Receive Large Award in Fracing Nuisance Claim

An interesting case was in the news recently and oil and gas attorneys have been following it with interest. The case is Lisa Parr, et al. vs. Aruba Petroleum, Inc., et al.; County Court at Law No. 5, Dallas County, Texas; Cause Number: CC-11-01650.

The Background

The Parrs have a 40 acre ranch in Decatur, Texas which is about 60 miles northwest of Dallas, Texas. The ranch sits on the Barnett Shale. Robert and Lisa Parr and their 11 year old daughter Emma alleged that they started having health problems in 2008, including migraine headaches, dizziness and nausea. By 2009, Lisa Parr said: "(m)y central nervous system was messed up. I couldn't hear, and my vision was messed up. My entire body would shake inside. I was vomiting white foam in the mornings." She claimed that her husband and daughter had nosebleeds, vision problems, nausea, rashes and blood pressure issues.

The Lawsuit

The Parr family filed a lawsuit against Aruba Petroleum and a number of other well operators with wells in the area in 2011, requesting $66 million in damages. Aruba Petroleum had 22 natural gas wells within two miles of the Parr’s land, with three wells close to the Parr’s house: the closest well was 791 feet from their house. The lawsuit claimed that Aruba Petroleum poorly managed the wells and did not have proper emissions controls, leading to a “private nuisance” of air pollution and the family's exposure to emissions, toxic air pollution and diesel exhaust. They claimed they got so sick that they could not work, and sometimes had to stay in Robert Parr’s office to escape the toxic environment.

Aruba claimed that: 1) the Parrs had no evidence that proved that diminished air quality at their home was due to the drilling of its wells; 2) Aruba had eliminated any environmental problems immediately and any contaminants were within air quality standards set by the Texas Commission on Environmental Quality; 3) all operations of Aruba's wells complied with requirements of the Texas Railroad Commission; 4) the operation of the wells complied with all federal law and standards; and 5) any substances released into the air near the wells could not have made anyone sick.

The original lawsuit was not only against Aruba Petroleum, but also other oil and gas companies operating nearby. Halliburton won summary judgment against the Parrs last year. Other companies, including a subsidiary of ConocoPhillips Co., settled with the family.

The Judgment

In April 2014 the jury in the Dallas County Court of Law No. 5 awarded the Parr family $3 million dollars in a five to one jury verdict. The jury found that Aruba Petroleum took intentional steps to substantially interfere with the Parr family’s use of their home. The jury did not find that Aruba acted with malice however, and so the Court dismissed the Parr’s claims for exemplary damages. The award included $275,000 for loss of value to their property, $2 million for past physical pain and suffering of the three, $250,000 for future pain and suffering, and $400,000 for mental anguish. The judgement was signed by Judge Mark Greenberg on July 19, 2014. Judge Greenberg signed an order denying Aruba's motion for new trial on September 10, 2014 and Aruba has posted a supersedeas bond, which prevents the Plaintiffs from collecting the judgement until all appeals are exhausted.

Aruba said that it plans to appeal the decision to the Fifth Circuit Court of Appeals. An Aruba representative said: “There were hundreds of wells drilled in the area. Trying to tie the diminution of property value and the health effects to Aruba alone makes no sense.”

I am all in favor of oil companies paying for whatever damage they may cause. I have to confess that I am a bit mystified as to how the Parrs could prove, by a preponderance of the evidence, that it was only the Aruba wells that caused their problems, when there were dozens of other wells in the area. It will be interesting to see what the Fifth Circuit Court of Appeals does with this case.

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September 19, 2014

Paradigm Oil & Gas Expanding Texas Operations

Another oil and gas company is expanding its operations in Texas. Paradigm Oil and Gas Inc. is adding 50 new wells to its Texas operations through new leases from Magnum Oilfield Services, Bitter Creek Petroleum and Blackjack Services. The deal includes cash and stock, with Paradigm keeping between 70% to 95&% interest in the wells. Paradigm will be the operator of the wells. Some of the new leases are the Miller, Adobe, Somerset, WH Summers, Hall, Don & Ruby Roberts, Cole, Colley and Brinkmayer A. A full list and details of the transaction will be released later. These leases are in Tyler County, Liberty County, Bexar County, Atascosa County, Kaufman County and Callahan County, Texas.

Paradigm is an expanding oil and gas producer, and currently has 30 leases with nearly 300 wells. Recently, Paradigm announced that its April 2014 oil shipments produced record returns. The CEO of Paradigm, Vince Vellardita, told reporters that “(w)e shipped two loads in April from leases in Texas and Louisiana totaling nearly 309 barrels. Those wells have since produced another 466 barrels which are ready for pick up. This oil production and (these)shipments send a clear message to shareholders that we are delivering on our promise to generate revenue and achieve sustained profitability.” Many of the new Paradigm leases are between Dallas, Texas and Houston, Texas and others cover almost 4,000 acres in the Permian Basin and the Eagle Ford shale. Of the 50 new wells, 20 are producing revenue oil and gas already. A Paradigm operations division worker said it was another example of Paradigm’s “due diligence” in going after low-risk, high return properties that are very lucrative for the company.

Let's hope that Paradigm's efforts will result in increased royalties for Texas mineral owners whose leases will now be operated by Paradigm.

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