Lightning Oil Co. v. Anadarko E&P Onshore, LLC

Anadarko E&P Onshore, LLC (Anadarko) (defendant) leased minerals located below a state-controlled wildlife-conservation area in Texas. The lease restricted Anadarko from drilling activities on the surface of the conservation area and required Anadarko to drill from offsite locations if prudent and feasible to do so. Anadarko entered an agreement with Briscoe Ranch, Inc. (Briscoe), the owner of surface ranchland adjacent to the conservation area, allowing Anadarko to drill down vertically from the ranch surface and then use horizontal drilling to produce minerals from Anadarko’s leased area. Lightning Oil Company (Lightning) (plaintiff) leased the minerals under the ranch and objected to Anadarko’s agreement with Briscoe because Anadarko’s vertical wellbores (i.e., the holes for the well) would pass through portions of Lightning’s leased mineral-bearing formations and would remove some mineral-bearing material during the drilling process. Lightning sued to enjoin Anadarko from drilling on the ranch, asserting claims including trespass. Lightning claimed that mineral lessees have the right to preclude surface owners or adjacent lessees from drilling through the mineral lessees’ mineral-bearing formations and, therefore, that Lightning’s consent was necessary before Anadarko could drill through the areas covered by Lightning’s mineral lease. The trial court dismissed Lightning’s action, and the appellate court affirmed, holding that Anadarko needed only Briscoe’s permission to drill. The appellate court explained that a surface owner’s rights include the right of ownership of geological structures and all nonmineral molecules of land beneath the surface. The appellate court thus concluded that because Lightning did not own or exclusively control the earth surrounding the minerals under the ranch, Lightning had no right to exclude Anadarko. Lightning appealed to the Texas Supreme Court.