Court of Appeals Rejects Plaintiffs' Allegations of Substantial Drainage from Oil-and-Gas Lease

In Petroleum Synergy Group, Inc. v. Occidental Permian, Ltd., the owner of an overriding royalty interest in an oil-and-gas lease sued Occidental, claiming that Occidental breached its implied covenant to prevent substantial drainage from the leased acreage.  The trial court entered judgment on the jury's verdict that Occidental did not fail to prevent substantial drainage, and the plaintiffs appealed.  The Amarillo Court of Appeals affirmed, holding that the plaintiffs did not demonstrate substantial drainage as a matter of law.  Petroleum Synergy Group, Inc. v. Occidental Permian, Ltd., 331 S.W.3d 14 (Tex. App.--Amarillo 2010, pet. denied).

Occidental Permian's Brief on the Merits
Court of Appeals Opinion