Litigation is exploding in the Eagle Ford during the downturn, as mineral owners and companies fight for what’s theirs.
As crude prices and rig counts plummeted over the last year, the number of lawsuits have increased and Texas courts are seeing everything from royalty, lease and title complaints to more complicated contract disputes involving major investors.
One example of the kinds of litigation currently active in the Eagle Ford involves two Texas companies who are squabbling over mineral leases. Last week, 1776 Energy Partners LLC sued Riley Exploration LLC claiming they wrongfully let drilling leases expire after the company was hired to service 11,000 acres of oil and gas leases in Karnes County. The breach of contract suit demands Riley return all fees that have already been paid plus damages for the expired leases, a figure estimated at over $1 million.
Battles between family heirs have also increased, with relatives bringing new claims of mismanagement against each other. This type of litigation can be very lengthy and can clog up a courtroom docket.
In February, the Texas Supreme Court upheld a lower court’s ruling to award at least $1 million in royalties, interest and attorney fees to the Hyder family who had been fighting Chesapeake Energy since 2010.