Face Challenges Confidently

085 Oryx Energy Company v. Shelton

Friday, September 4th, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Or yx Energy Company v. Shelton, No. 12-94-00045-CV, 1996 WL 288125 (Tex App. – Tyler May 31, 1996,   ) is a surface damages case based on excessive use of surface rights under an oil and gas lease. Under the 1944 lease, the lessee drilled 35 wells, conducted secondary recovery operations (water flooding and gas injection), and conducted tertiary recovery operation (polymer injections). The suit complaining of excessive use, negligence and pollution was brought against Oryx in 1993. Apparently any recovery was limited to the preceding two years, because the opinion focuses on just that two-year period.
The court found there was sufficient evidence to support the jury’s finding that Oryx’s use of the surface of the land was excessive. However, the case was reversed and remanded because the plaintiffs failed to offer any evidence of the difference between the market value of the land immediately before the injury and such value immediately thereafter. The proof should have included evidence of the impact that reasonable oil and gas operations would have had on the actual surface use of the land compared to the impact the excessive surface usage had on the market value of the land.
The court also rejected the award of punitive damages, holding that there was no evidence that Oryx’s conduct was willful, wanton or malicious while conducting its mineral operations. To recover, plaintiffs must produce evidence “that the defendant was consciously indifferent to the rights, safety, or welfare of others.”