A long-running dispute between a South Texas ranch owner and an oil company over access to a shut-in well took another turn October 1, when a Texas appeals court ruled that state law allows the operator to cross neighboring private land to reach the well for plugging work.
The court affirmed a Victoria County trial court’s refusal to block the company’s access, according to the Texas Thirteenth Court of Appeals opinion published by Justia. The ruling came from the Texas Thirteenth Court of Appeals in Dierlam v. Allegiant Resources.
1, an oil and gas well located on neighboring property known as the Wright Land. Allegiant Resources and its predecessors operated the well from 1996 through 2015, according to the Texas appeals court opinion. Allegiant became the operator in 2021 and later sought to negotiate new access with the ranch owners. The well is only about 15 to 20 yards from the San Antonio River, according to testimony described in the court’s opinion.
Because leaving it unplugged could create environmental and regulatory problems, the company argued that it needed to reach the well.
Allegiant also told the trial court that it had considered several alternative routes but found that each would still require crossing the Dierlam property. The court relied on Section 89.044 of the Texas Natural Resources Code, which permits the Railroad Commission, its agents, an operator or a nonoperator to enter “the land of another” to plug or replug a well that has not been properly plugged. The court said the Legislature deliberately used the broader phrase “land of another” and did not restrict the access provision to a particular category of landowner. Company personnel told the trial court that an improperly abandoned well could potentially release saltwater or crude oil.
At the heart of the dispute is the Remora Oil Unit No. The parties were unable to agree on financial terms, and access was ultimately refused. One proposed route would involve clearing downed trees and low vegetation and was considered the least invasive option. Instead, the court considered whether the ranch owners were entitled to a temporary injunction preventing Allegiant from entering the property to plug the well. The answer was no. The judges rejected the ranch owners’ argument that the provision applies only to land owned by the surface owner associated with the well itself. The decision also noted that the statute contains protections for surface owners, including provisions requiring restoration of land after plugging and limiting actions that could prevent the surface owner from accessing the property. Allegiant’s argument was not that it wanted to restart production at the Remora well. Its stated purpose was to plug the inactive well and remove the associated surface equipment. They also raised concerns about deteriorating equipment and possible groundwater contamination. The company further argued that failing to complete the work could expose it to regulatory consequences from the Texas Railroad Commission and potentially significant financial losses. The appeals court did not ultimately decide all of those underlying environmental and financial questions. Its ruling focused on whether Dierlam had demonstrated a probable right to stop the access sought by Allegiant through a temporary injunction. It concluded that she had not.
The legal question before the appeals court was narrower than whether Allegiant could permanently establish an access easement across the ranch.