In
As background, the mineral rights to the property were severed from the surface in 1950. When Lucky Land acquired the surface rights to the property in 2022, the property was subject to an existing oil and gas lease that was subsequently assigned to EOG. Lucky Land intended to use the property as a hunting ground and claimed to have made nearly
Facing potential construction delays, EOG filed a complaint against Lucky Land as well as a motion for a preliminary injunction to enjoin Lucky Land from interfering with EOG's use of the surface of the property in connection with its oil and gas lease. The district court examined four factors: (1) whether EOG had a substantial likelihood of success on the merits, (2) whether EOG would suffer irreparable harm if a preliminary injunction was not issued, (3) whether the preliminary injunction would cause substantial harm to others, and (4) whether the public interest would be served if the district court granted the requested the preliminary injunction.
The severance deeds and EOG's oil and gas lease were silent as to whether the reservation of rights included the right to develop minerals underlying neighboring lands. The district court concluded that the severance deeds and EOG's lease did not grant EOG an express right to use the surface to develop oil underlying neighboring lands. However, the district court found that EOG had a strong likelihood of success on the merits because EOG's proposed use of the surface (i) did not exceed what is reasonably necessary for EOG to enjoy its right to the mineral estate and (ii) gives due regard to Lucky Land's use of the surface. The district court noted that the two horizontal well pads impacted less surface acres than drilling 16 two-acre vertical well pads across the property. The district court also found that EOG's
Next, the district court found that EOG would not suffer irreparable harm if the injunction was not granted. While EOG may suffer construction delays and substantial added costs, the district court noted that this type of harm only warranted injunctive relief in unique circumstances that were not present in this case. Lastly, the district court found the third and fourth factors to be neutral. After balancing the four factors, the district court's finding that EOG had a strong likelihood of success on the merits ultimately tipped the scales in its favor and the district court granted EOG's motion for a preliminary injunction.
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