The long wait is finally over for the Hyder family, the Texas landowners who has been battling Chesapeake Energy for years.
Related: Chesapeake v. Hyder – Royalty Owner Wins Big
Last week, the Texas Supreme Court upheld a lower court’s ruling to award at least $1 million in royalties, interest and attorney fees to the family. The state high court heard the case in March of 2015.
In 2010, property owners (Hyders) sued Chesapeake for improperly subtracting postproduction costs from their royalty checks for gas taken from their own property. In 2012, state District Judge Melody Wilkinson awarded the family nearly $1 million and the decision was upheld last year by the 4th Court of Appeals in San Antonio. Chesapeake continued to fight the decision and in June, the Texas Supreme Court sided with the Hyders. Chesapeake immediately appealed.
This high-profile case has lots of people taking sides with many submitting briefs to the court. The Texas Land and Mineral Owners Association, the National Association of Royalty Owners-Texas Inc. and the Chesapeake Barnett Shale Royalty Owners recently filed “amicus curiae” briefs, publicly siding with the Hyders.
“This is one of a long line of cases in which Chesapeake has sought to profit at the expense of royalty owners.” - National Association of Royalty Owners-Texas
On the flip side, pro-industry leaders were concerned that the decision in the Hyder case could create chaos in the courts for other royalties cases across the Lone Star State. More than a dozen oil companies and pro-industry organizations banded together to file briefs in favor of rehearing the case.
Rig counts across the country continued to slide downward hitting a low of 619 at the week ending January 29th.
Related: Schlumberger Cuts 10,000 More Jobs in Q4
Natural gas rigs fell by 13 to 121 and rigs targeting oil dropped another 12, to 498.. The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) Horizontal drilling continues to dominate the activity in all regions of the country:
- 487 Horizontal Rigs
- 74 Vertical Rigs
- 58 Directional Rigs
This week’s decline marks the 22nd consecutive week that there has been no positive motion for this important oil and gas indicator, according to Baker Hughes. Rig counts have dropped drastically this year as oil and gas producers have sidelined rigs to cut costs while waiting for crude prices to rebound.
Texas leads the nation in running rigs, though that count has also dropped significantly this year. As of Friday there were only 281 rigs running across the Lone Star State, down from 414 one year ago. Activity in the Permian basin and Eagle Ford Shale regions are providing most of the production and account for more than 90% of the total drilling in Texas.
The situation in the oil and gas industry continued to deteriorate throughout January with crude prices fluctuated wildly and dipping below $30 at one point. There was also news of at least one bankruptcy and another 14,000 job cuts from Halliburton and Schlumberger. A huge wildcard that is sure to affect things in the coming months is what the influx of Iranian oil mean to our industry. One analyst warns that ”… unless something changes, the oil market could drown in oversupply.”
Rad more about the rig counts at BakerHughes.com