Eastland Court Enforces Right of First Refusal for Saltwater Disposal Wells in Surface Use Agreement

SM Energy breached a surface use and compensation agreement's right of first refusal provision requiring it to offer surface owners the opportunity to place any saltwater disposal well drilled within five miles on their property, resulting in damages including $1,449,179 in skim oil revenue. The Eastland Court of Appeals held that the ROFR was triggered by SM Energy's choice to drill disposal wells within the specified radius, not by its separate decision to purchase third-party land for those wells.