A mineral lessee’s use of the surface estate should be exercised with due regard for the rights of the surface estate’s owner. Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex. 1971). This concept of “due regard,” known as the accommodation doctrine, was first articulated in Getty Oil and balances the rights of the surface owner and the mineral owner in the use of the surface. Id. at 622.
The Hegars do not dispute Key Operating’s right to use the roadway to produce and remove minerals from under the Hegar Tract nor do they argue that Key Operating’s use of the road is unreasonable pursuant to the accommodation doctrine. Rather, they contend that Key Operating has no right to use the road to extract minerals from an adjoining property.
SOURCE: FIRST COURT OF APPEALS - 01-10-00350-CV - 10/13/11
Key Operating & Equipment, Inc. v. Will Hegar and Loree Hegar--Appeal from 21st District Court of Washington County
Opinion issued October 13, 2011.
In The
Court of Appeals
For The
First District of Texas
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NO. 01-10-00350-CV
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KEY OPERATING & EQUIPMENT, INC., Appellant
V.
WILL HEGAR AND LOREE HEGAR, Appellees
On Appeal from the 21st District Court
Washington County, Texas
Trial Court Case No. 33,968
MEMORANDUM OPINION
Key Operating & Equipment, Inc. appeals from a final judgment enjoining it from using a road that crosses Will and Loree Hegar’s property. We reverse and render judgment in favor of Key Operating & Equipment, Inc.
BACKGROUND
Key Operating & Equipment, Inc., an oil and gas exploration company owned by brothers Thomas and Kenneth Key, operates and produces oil in and around Washington County, Texas. In 1987, Key Operating[1] leased a sixty-acre parcel in Washington County known as the Richardson Tract and began operating the C. F. Richardson No. 1 Well thereon.
In 1994, Key Operating acquired oil and gas leases covering the Rosenbaum/Curbo Tract, a 191-acre tract contiguous with the Richardson Tract. After reworking the Rosenbaum No. 2 Well located there, Key Operating acquired production from this tract. In 1994 or 1995, Key Operating built a road across the tract that it has used to access its operations on both tracts since.[2] To date, Key Operating has spent approximately $150,000 on the construction and maintenance of the roadway.
In December 2000, Thomas and Kenneth Key, individually, acquired an undivided twelve and one-half percent interest in the mineral estate underlying the Rosenbaum/Curbo Tract.[3] The brothers then leased their interest in the Rosenbaum/Curbo Tract to their exploration and production company, Key Operating, with a voluntary pooling provision that allows Key Operating to pool the acreage covered by the Key brother’s lease with other lands. Three days after acquiring the lease, Thomas Key, as president of Key Operating, executed a Declaration of Pooled Unit that pooled ten acres from the Rosenbaum/CurboTract with thirty acres from the adjoining Richardson Tract. Both the lease and the declaration were recorded in the public records of Washington County.
In May 2002, the Hegars purchased eighty-five acres of the Rosenbaum/Curbo Tract from Charles Curbo (Hegar Tract).[4] Both the Rosenbaum No. 2 Well and the road Key Operating built are on the Hegar Tract. Will Hegar testified that they knew at the time of purchase (1) that the property was subject to various oil and gas leases, and (2) that Key Operating used the road to service a well on the adjoining Richardson Tract. He also testified that the Hegars’ themselves currently use the road to access the home they built in 2003 or 2004 some 300 feet from the roadway. Hegar and his wife tolerated Key Operating’s use of the roadway until Key Operating drilled a new well on the Richardson Tract that dramatically increased traffic. As Hegar notes, "We’re trying to raise a family and we can’t do it with a highway going through our property."
In December 2007, the Hegars filed suit against Key Operating for trespass and sought a permanent injunction against Key Operating’s continued use of the roadway. Although it began as a jury trial, the parties agreed to withdraw the case from the jury before the defense rested and the balance of the case was tried to the bench. At the trial’s conclusion, the court permanently enjoined Key Operating from using the Hegar’s property surface, including the roadway, "for any purpose relating to the extraction, development, production, storage, transportation, or treatment of minerals produced from an adjoining" tract. The trial court filed findings of fact and conclusions of law at Key Operating’s request and this appeal ensued.
DISCUSSION
In three issues, Key Operating contends that (1) the trial court erred when it enjoined Key Operating from using the surface of the Hegars’ property; (2) the Hegars do not have standing to challenge the validity of the pooling agreement; and (3) assuming that it was necessary for the Hegars to prove that no oil was being produced from the Hegars’ property through the wells on the adjoining property, the Hegars’ evidence was insufficient.
