Discusses all issues of Oil and Gas in Texas, capture, royalties, etc.
Example card:
Front of Card:
Dan owns Oilacre in fee simple. Jim owns Dryacre in fee simple. The two properties share a common border with Oilacre on the west, and Dryacre on the East. In January, Dan discovers that a large pool of oil rests beneath his property. According to surveyors, 15% of the large oil field lies beneath Dan’s property, and the remaining 85% is located beneath Dryacre. Dan quickly moves to drain the oil field. In July, when he has drained 50% of the field, Jim realizes that Dan is draining oil from underneath his own property, and immediately calls for Dan to cease draining the reservoir and pay him 35% of the profits Dan realized from the sale of the oil. According to the Common Law Rule of Capture, is Jim able to recover from Dan?
Back of Card:
No. According to the Common Law Rule of Capture, a landowner is able to drain all the oil and gas he can from wells located on his own property regardless of whether the oil or gas was originally located underneath his property. The Rule holds that one is not liable to his neighbor for any profits derived from draining oil or gas which may have originally been under his neighbor’s property. In this case, Jim would not be able to recover from Dan. Jim could, however, open wells on his property and begin to drain the oil field as well.