In a third opinion by Judge Bullard arising from the same dispute, the Business Court has granted in part and denied in part an defendant operator’s motion for summary judgment on plaintiff operator’s damages claim.
Slant Operating LLC and Slant WTX Holdings, II, LLC v. Octane Energy Operating, LLC (No. 24-BC08A-0002; 2025 Tex. Bus. 54; December 22, 2025) arose from a multi-party dispute in the oil patch. Slant Operating and Octane operated oil and gas wells on adjancent leaseholds. They executed an agreement to reciprocally waive future objections to the other’s “off-lease penetration point” permit applications to the RRC. They also agreed to keep each other advised of daily drilling, completion, and flowback reports for each well, as well as daily production data. So when Octane planned to drill five wells from a penetration point neighboring Slant’s leasehold, Slant waived its objection. But when Slant proposed to drill its own wells from a penetration point on neighboring Octane’s leaseholds, Octane refused to waive objection and filed a permit objection with the RRC. Slant filed suit for breach of contract, seeking lost revenue for for the wells to which Octane objected, redesign costs for those wells, and lost revenue for 35 additional future, unidentified wells. Octane moved for summary judgment and to strike some of Slant’s summary judgment evidence.
Taking up the motion to strike first, the court considered Octane’s objection that an expert affidavit filed in Plaintiffs’ response to Octane’s MSJ was untimely because Slant filed it one day after the deadline for its response (it did timely file the response itself). The court agreed. The affidavit was late, and Plaintiffs failed to ask the court for leave to file it. Moving on to Octane’s MSJ, the court agreed with Octane that Slant Holdings was not entitled to any loss of revenue, either on the six wells to which Octane objected or future wells unidentified wells. As the court determined in the first case in this trilogy, Slant Holdings was not a party or third-party beneficiary to the waiver agreement and not entitled to damages as a matter of law. The same went for Slant Operating because it didn’t own the leasehold or the mineral interests. Slant WTX, on the other hand, was the 100% working interest and associated net revenue interest owner. Because Slant Operating had no rights to any of the minerals in any of the wells, it has no lost revenue claim and can’t recover those damages on behalf of the mineral owner, Slant Holdings.
Slant Operating, however, presented evidence of redesign costs and additional expenses resulting from Octane’s breach. That evidence consisted of invoices showing that Slant incurred consequential damages (expectancy damages), thus defeating Octane’s MSJ on that element of damages. But Slant Operating presented no evidence of reliance damages, so the court granted that part of the MSJ.
In three concurrent opinion, consequently, this case has been whittled way down from Slant’s initial claims. As we have pointed out in the past, imagine how long this would have taken in district court. Not only that, we get lucid, scholarly written opinions that add to the jurisprudence of the state on all sorts of issues to boot. As we close the first year of the business court’s operation, it’s safe to say that it has been an unqualified success.
