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Evans Resources, L.P. v. Diamondback E&P, LLC
The Eastland Court of Appeals affirmed summary judgment for Diamondback E&P in a multi-claim dispute involving alleged oral representations to drill horizontal wells, holding that landowners' reliance was unjustifiable where the paid-up lease granted only discretionary drilling rights beyond initial obligations. The court also excluded expert testimony on surface agreement damages, including a $6,670,000 diminution-in-value calculation, finding the opinions regarding city variance approvals were unreliable and based on assumed facts contradicted by the record.
Analysis
Eastland Court Affirms Summary Judgment on Fraud Claim Where Oral Drilling Promises Contradicted Paid-Up Lease Terms
The Eastland Court of Appeals affirmed summary judgment for Diamondback E&P in a multi-claim dispute brought by Evans Resources alleging fraud, breach of contract, bad faith pooling, and rule against perpetuities violations concerning horizontal well pad development rights in Midland County. The court held that landowners' reliance on oral representations about timely horizontal drilling was unjustifiable where the lease granted only a discretionary right to drill additional wells beyond initial obligations during a three-year primary term.
Eastland Court Affirms Summary Judgment on Fraud Claim Where Lease Terms Contradicted Alleged Oral Drilling Commitments
The Eastland Court of Appeals affirmed summary judgment for Diamondback E&P in a multi-claim dispute involving alleged oral representations to drill horizontal wells, holding that landowners' reliance was unjustifiable where the paid-up lease granted only discretionary drilling rights beyond initial obligations. The court also excluded expert testimony on surface agreement damages, including a $6,670,000 diminution-in-value calculation, finding the opinions regarding city variance approvals were unreliable and based on assumed facts contradicted by the record.