In a closely watched dispute between two neighboring mineral operators, the San Antonio Court of Appeals ruled that Lightning Oil Co., the plaintiff lease owner, could not receive a temporary injunction preventing Anadarko E&P Onshore, LLC, a neighboring lease owner, from drilling through the plaintiff’s mineral estate to reach the defendant’s own mineral estate.
In the Eagle Ford Shale in Texas, Anadarko owned leases for mineral interests beneath the Chaparral Wildlife Management Area. The lease required Anadarko to use offsite drilling locations when prudent and feasible. Lightning owns adjacent mineral leases, and Briscoe Ranch, Inc. owns the surface above Lightning’s leases. Anadarko entered into an agreement with Briscoe to establish drill sites on Briscoe’s land, drill through – but not produce from – Lightning’s leases, and drill from Anadarko’s own lease.
Lightning sought an injunction, claiming that its own mineral interests could be harmed by Anadarko’s proposed drilling activity. Lightning argued that drilling fluid could seep into Lightning’s mineral interests if Anadarko failed to case its wells properly. In that case, Lightning would be forced to drill extra offset wells in order to prevent drainage occurring from Anadarko’s wells.
The trial court denied the injunction, and the appellate court affirmed, stating that Lightning had failed to show an imminent and irreparable harm that would result from the drilling activity.