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Myers-Woodward, LLC v. Underground Services Markham, LLC
The Texas Supreme Court overruled Mapco, Inc. v. Carter and held that the surface estate owner, not the mineral estate owner, owns possessory rights to subsurface cavern space created by salt extraction, rejecting the mineral owner's claim to use salt caverns for hydrocarbon storage produced off-site. The Court also ruled as a matter of first impression that the deed reserved an in-kind royalty, entitling the surface owner to receive one-eighth of the salt brine produced rather than monetary payment.
Analysis
Texas Supreme Court Overrules Mapco, Holds Surface Estate Owns Salt Cavern Voids and Clarifies In-Kind Royalty Obligations
The Texas Supreme Court overruled its 1991 Mapco precedent, holding that surface estate owners—not mineral estate owners—own subsurface cavern space created by salt extraction, and that mineral owners lack the implied right to use such voids for hydrocarbon storage produced from other lands. The Court also held that a deed reserving "a royalty of 1/8 of all the gas or other minerals" created an in-kind royalty obligation rather than a cash royalty.
Texas Supreme Court Overrules Mapco, Holds Surface Estate Owns Salt Cavern Storage Rights Absent Express Agreement
The Texas Supreme Court overruled Mapco, Inc. v. Carter and held that the surface estate owner, not the mineral estate owner, owns possessory rights to subsurface cavern space created by salt extraction, rejecting the mineral owner's claim to use salt caverns for hydrocarbon storage produced off-site. The Court also ruled as a matter of first impression that the deed reserved an in-kind royalty, entitling the surface owner to receive one-eighth of the salt brine produced rather than monetary payment.