978-0078023859 Case7_1

subject Type Homework Help
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subject Authors Daniel Cahoy, Marisa Pagnattaro

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Case 7.1
COASTAL OIL & GAS CORP. V. GARZA ENERGY TRUST ET. AL.
Supreme Court of Texas
268 S.W.3d 1; 52 Tex. Sup. J. 55; 2008 Tex. LEXIS 771 [August 29, 2008]
FACTS:
Collective owners of a 748 acre tract of land in Texas (Salinas) sued Coastal Oil for infringing on
their property rights by removing natural gas from beneath their land (known as Share 13).
The lessees, Coastal Oil & Gas Corp., drilled a well on adjoining land in close proximity to a well on
the lessor’s property.
Salinas alleged that Coastal was not extracting the gas fast enough. They argued that Coastal was
drilling on neighboring land that it owned and extracting gas from beneath Share 13 through
hydraulic fracturing.
Salinas claimed that Coastal was drilling on the neighboring land instead of Salinas’s land to avoid
paying Salinas a royalty on the gas.
Salinas believed the action by Coastal constituted a trespass because it removed gas that would
otherwise remain after Coastal’s lease ended.
PROCEDURE: The trial court held for Salina’s and awarded damages. The Court of Appeals affirmed
but reversed the attorney fee award.
ISSUE: Is subsurface hydraulic fracturing of a natural gas well that extends into another’s property a
trespass for which the value of gas drained as a result may be recovered as damages?
RULE: “The rule of capture gives a mineral rights owner title to the oil and gas produced from a lawful
well bottomed on the property, even if the oil and gas flowed to the well from beneath another
owner’s tract.”
REASONING:
1. The gas Salinas claims to have lost simply does not belong to him. Salinas does not claim damages
that are recoverable.
2. The rule of capture is justified because a landowner can protect himself from drainage by drilling
it difficult to determine what might have happened hence the justification for the rule of capture.
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ADDITIONAL INFORMATION:
The court indicated that the law of capture should not be changed to apply differently to hydraulic

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