Hicks Thomas Wins Appeal in East Texas Mineral Rights Dispute

TEXARKANA, Texas – Hicks Thomas lawyers won a Texas appeals court ruling for MJR Oil & Gas 2001 LLC involving a dispute over dozens of East Texas leases.

What are Mineral Rights in Texas?

In the state of Texas, mineral rights are regarded as the rights to mineral deposits that are beneath the surface of someone's property. Generally, this right belongs to the owner of the property, but there is an opportunity for these rights to be transferred by sale or by leasing them to a second party.

Details of the Complex Case

Firm lawyers successfully argued to the 6th Court of Appeals in Texarkana that MJR’s right of first refusal was a covenant running with the land. The ruling reversed the summary judgment granted by the trial court in Longview and sent the case back for trial.

“We’re very pleased for our client. There is a considerable amount at stake, since the ruling affects our client’s rights in numerous oil and gas leases,” said Hicks Thomas appellate lawyer J. Stephen Barrick of Houston. Also representing Dallas-based MJR is firm co-founder John B. Thomas, and attorneys Jody Sheets and Jason Gunderman.

The appeals court held that a 2002 settlement agreement referenced in a recorded assignment of overriding royalty interests giving MJR a right of first refusal on any sale of the leases was a covenant running with the land that was binding on the original parties’ successors and assigns. Some of the successors failed to comply with MJR’s first-refusal rights, and that is what led to the lawsuit against AriesOne, GFP Texas Inc., Miken Oil Inc. and SND Energy Co.

“The ruling was important because the court clarified that a right of first refusal in an oil and gas lease can be a covenant running with the land, even if it is not described with those words,” said Mr. Thomas. “This is a big win for our client.”

Also representing MJR Oil & Gas are P. Michael Jung and Jadd Masso of Clark Hill Strasburger in Dallas. David Henry of Stevens Henry in Longview was local counsel in the trial court. The case is MJR Oil & Gas 2001 LLC v. AriesOne LP, et al., Case No. 06-00116-CV in the Texas 6th Court of Appeals.

Founded in 1997, Texas-based Hicks Thomas LLP is a premier litigation firm representing plaintiffs and defendants across the nation with offices in Houston, Austin, Beaumont and Amarillo, Texas, and Sacramento, California. The firm provides in-depth experience in cases involving oil and gas, environmental, complex commercial, toxic tort, construction, products liability, corporate governance, securities, banking, insurance coverage, transportation, trade secrets and business litigation. Visit the firm at http://www.hicks-thomas.com.