The Corpus Christi Court of Appeals has conditionally granted a group of oil producers’ petition for writ of mandamus seeking to invalidate a venue-selection clause, finding the agreement at issue did not involve a “major transaction” under § 15.020, CPRC.
In Re INEOS USA Oil & Gas LLC; CNOOC Energy U.S.A., LLC; Jamestown Resources, LLC; Chesapeake Exploration, L.L.C.; and Chesapeake Operating, L.L.C. (No. 13-25-00335-CV; August 1, 2025) involved a dispute between Assignees (Relators and Empresa Energy, LLC) and Texas Lone Star Petroleum Corporation over the assignment of fourteen oil and gas leases in La Salle County. Empresa entered into two contracts with Lone Star—a Purchase and Sale Agreement (PSA) and an “Assignment”—agreeing to pay Lone Star a sum total of $538,237 for the 633.22 acre property. Under the Assignment’s venue-selection clause, any claims concerning the interests assigned would lay exclusively in Corpus Christi, Nueces County, Texas. The Assignment further granted Lone Star reversionary rights contingent on Assignees producing two barrels of oil per day. After signing, Empressa assigned half of the leases to Chesapeake Exploration, who in turn conveyed some interests to CNOOC, forming two pooled units.
On January 7 2025, Lone Star sued Assignees in Nueces County, seeking to reclaim the leases and operations, stating Assignees breached the Assignment’s production mandate. Relators moved to transfer venue to La Salle County, arguing the Assignment’s venue selection clause was unenforceable as the PSA and Assignment did not involve a “major transaction” under § 15.020, CPRC. In an affidavit sworn by its president, Lone Star responded that while the PSA only stated a purchase price of $538,237, and the Assignment: “ten dollars (10.00) and other good and valuable consideration,” Assignees were obligated to pay over $1 million to drill each Eagle Ford Shale well. Otherwise, the Assignment would be terminated, and the leases reassigned to Lone Star. Relators objected to the affidavit and moved to exclude it, but the trial court denied the motion. Relators sought mandamus relief.
In an opinion by Justice Fonseca, the court of appeals conditionally granted relief. In their petition, Relators asserted that (1) Lone Star’s venue-selection clause was unenforceable and (2) venue was proper in La Salle County because the wells in question were located there, pursuant to § 15.011, CPRC. Relators first claimed the venue-selection clause was unenforceable because the relevant purchase did not qualify as a “major transaction” under § 15.020. The Court observed that for a contract’s venue clause to be enforceable, the contract must involve a “major transaction”, evidenced by written agreement with an aggregate stated value of at least $1 million. Unwritten costs (ie. of drilling the wells), however, were not included in the contract’s “aggregate stated value.”. Since the only stated value (the property’s $538,237 purchase price) was under $1 million, it was not as a “major Transaction.” Consequently, the venue-selection clause could not be enforced.
Moving to Relators’ second issue, the court determined that Lone Star’s suit sought to recover an interest in real property. Accordingly, it confirmed La Salle County—the location of the property at issue—as the suit’s mandatory venue under § 15.011. The court thus granted the petition and instructed the lower court to: (1) vacate its order denying relators’ venue transfer motions and (2) grant the transfer.
TCJL Intern Shaan Rao Singh researched and prepared this article.
