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Oil and gas generally doesn't follow that even in Texas, for what it's worth. In most places, if the reservoir compartment you're producing from extends beyond
by jofer 7y ago
Oil and gas generally doesn't follow that even in Texas, for what it's worth. In most places, if the reservoir compartment you're producing from extends beyond the boundaries of your lease, you have to pay whoever owns the mineral rights of the rest of it proportionally. You still have the right to produce it in any way you want -- the other rights holder isn't suddenly in a joint partnership. Of course, these laws vary pretty wildly by state and country, but the norm is that you need to compensate someone if you're producing from something that extends onto their acreage.
Water is handled in the way you mentioned, though, which is pretty nuts.
- dredmorbius 7y agoYes and no. The doctrine applies in numerous ways, some legal, some economic (see also Hotelling's Rule, which though distinct shares some aspects most notably, absolutely nil geological references in what's still considered the go-to economic model for extractive resource pricing, despite the fact that it bears no resemblance at all to actual pricing history), and most importantly, is still governing precedent in Texas, and other jurisdictions.