Third Circuit Vacates Summary Judgment on Royalty Withholding Claim, Holds Factual Issues Preclude Judgment on Division Order and Payment History

The Third Circuit partially vacated summary judgment in favor of Centennial Resources, holding that genuine issues of material fact existed as to whether the operator knew the majority interest holder had not signed the joint operating agreement when making royalty payments from March 2019 through February 2020, and whether a division order created a binding payor-payee relationship under Texas law. The court affirmed dismissal of the trespass-to-try-title claim, finding that even after the majority interest holder abandoned the lease, the minority interest holder remained a cotenant with the right to permit the operator to enter and drill.