The Corpus Christi Court of Appeals has affirmed a summary judgment and attorney’s fee award for a producer in a royalty dispute.
Roane-Williams Texas Minerals, LLC v. EOG Resources, Inc. and Reagan Smith Energy Solutions, Inc. (No. 13-23-00569; November 6, 2025) arose from a dispute over payment of net revenue interests to a mineral interest owner. Roane owned an unleased, undivided 1/36 mineral interest in and under 125 acres in Karnes County. The federal government owned an undivided ¼ mineral interest in the same tract, managed by the Bureau of Land Management. BLM leased the tract to EOG. EOG retained Reagan to provide consulting services relating to the conclusion of a communitization agreement with BLM. Reagan coordinated on the project with BLM and Roane. Roane signed a 2017 communitization agreement (2017 CA) and returned it to Reagan. Roane, however, wanted his tract removed from the agreement based on an interpretation of the lease (the Ranch Lease) to restrict pooling depending on the acres included in the total acreage subject to the 2017 CA. Roane took the position that since the Ranch Tract constituted only 120 of 823 acres, it was excluded from the CA. Consequently, Reagan submitted a revised CA excluding the Ranch Lease, which BLM approved in 2018 (2018 CA). Roane did not sign the 2018 CA.
Concurrently with the BLM process, EOG prepared a joint operating agreement for a new unit (the Blanc Unit) that included Roane’s interest and requested that Roane sign it. EOG also issued well proposals and authorizations for expenses for each well, identifying Roane’s non-operating working interest under the JOA. The accompanying plat showed that the Ranch Lease was not pooled. Roane signed off on the deal, electing to participate in the drilling of all three wells. He then signed the JOA, which required each party to pay the amount of all operation costs and burdens of product in proportion to its ownership interest unless “the Drilling Unit equals the Contract Area.” In that case, each party’s share of the production costs would be proportional to the extent of their respective tracts. In early 2019, the parties signed the Blanc Horizontal Unit Designation (BHUD), which took effect on December 1, 2018. Under the BHUD, each party agreed to unitize their interests in the mineral under the 702-acre Blanc Unit. The exhibit showing the unit reflected that Roane’s interest was not pooled.
EOG completed the wells in January 2019, and a few months later submitted proposals for new wells to Roane. Roane agreed to participate in these wells, which were drilled and completed. Early in July 2019, however, EOG discovered that “the net revenue interests [NRI] reflected in the division order did not properly charge Roane for its proportional share of all production burdens as required by the” JOA. EOG concluded that it had overpaid Roane for the first three wells because, it claimed, “the drilling unit did not encompass the entire Contract Area, and instead, the parties had agreed that the drilling unit consisted of the 702.24 acres as described in the BHUD” (i.e. that excluded the Roane’s tract). Roane disputed EOG’s calculations, and when EOG didn’t pay up, Roane filed suit for breach of the JOA and the 2017 CA, declaratory relief, and other causes of action. Roane also alleged that EOG underpaid because the drilling unit comprised the entire 823 acres, not the 720 identified in the JOA.
EOG and Reagan moved for traditional and no evidence summary judgment on all claims. The trial court granted both motions, denied Roane’s motion for reconsideration based on newly discovered evidence, and, after a bench trial, awarded attorney’s fees to EOG. Roane appealed.
In an opinion by Chief Justice Tijerina, the court of appeals affirmed. Beginning with Roane’s claim that EOG breached the 2017 CA by underpaying him, the court observed that the CA “does not set out any of the terms regarding how EOG would ‘properly pay [Roane] all oil and/or gas revenues derived by [EOG] from the sale of [Roane’s] interests.” Instead, the CA was simply “a contract to pool mineral interests …” Roane thus failed to show that the 2017 CA “was a valid contract concerning payment of royalties for its mineral interest.” Roane next argued that it “it produced evidence that EOG breached the 2017 CA and that Roane was underpaid as a direct result of EOG’s failure to operate the communitized area as an entirety and [was] not allocating production to the interest owners in accordance with the express terms of the 2017 CA.” But again court observed that the 2017 CA has nothing to do with payment of royalties. It thus upheld the trial court’s no evidence summary judgment order as Roane’s breach of the 2017 CA claim.
Turning to the trial court’s traditional summary judgment order with respect to breach of the JOA, the court looked to the text of the JOA. The question boiled down to whether the drilling unit was identical to the Contract area, in which case Roane would bear the “burdens of production solely for its own interest.” If not, Roane had to bear all burdens of production from the Contract Area equal to its percentage of ownership. To get to that answer, the court determined that a “drilling unit” meant the Blanc Horizontal Unit identified in the BHUD, which consisted of 702 surface acres and showed that Roane’s tract was not part of the unit. EOG produced other documents aligning with the BHUD, including its well proposals for each well (signed by Roane) and an “As-Drilled Plat” for each well showing the exclusion of Roane’s interest from the pool. The court had no trouble “conclud[ing] that the evidence conclusively establishes that the parties expressly agreed to fix the drilling unit of each well to the 702.24-acre tract. (internal citation omitted). Thus, EOG established as a matter of law that the drilling unit is not identical to the Contract Area.” As to the Roane’s declaratory judgment claim, the court agreed with EOG that Roane’s requests for declarations disappeared when the trial court determined that it didn’t breach the JOA.
Roane further sought review of the trial court’s denial of its motion for reconsideration based on newly-discovered evidence. But Roane didn’t state on appeal that it could not have discovered the alleged evidence earlier in the exercise of due diligence, that the evidence was not cumulative, or that the evidence was so material that it would probably produce a different result if a new trial was granted. Moreover, Roane cited to no evidence in the record of any of its claims. Not a very good way to conduct an appeal.
Finally, Roane challenged the award of EOG’s attorney’s fees. EOG presented evidence that virtually all of the attorney’s fees were incurred in its defense of Roane’s declaratory judgment requests. EOG’s expert, one of its lawyers, testified that the bulk of work done related directly to Roane’s repeated amendments to its pleading adding more requests for declaration. In the absence of any rebuttal evidence, the trial court didn’t abuse its discretion in awarding those fees. The same went for the trial court’s award of conditional appellate fees, which EOG’s expert estimated at $50,000. Citing a San Antonio Court of Appeals decision upholding an award of $112,500 if the case went all the way to oral argument at SCOTX, the court found no abuse of discretion.
