Oil & Gas Litigation Analysis

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Oil & Gas Litigation · Case Analysis
Joel Reese, Attorney

Home › Cases › Thomas R. Craddick, Sr. and Sandra H. Staley v. Cimarex Energy Company, Prize Energy Resources, Inc. and BPX Properties (N.A.) LP
Royalty Disputes

Thomas R. Craddick, Sr. and Sandra H. Staley v. Cimarex Energy Company, Prize Energy Resources, Inc. and BPX Properties (N.A.) LP

Court of Appeals of Texas, El Paso 08-24-00010-CV resolved

Thomas Craddick and Sandra Staley challenged BPX Properties' 2017 release of a 1943 oil and gas lease covering 1,440 acres in Reeves County, alleging bad-faith washout of their overriding royalty interests when BPX released the lease as part of a transaction with Cimarex that eliminated their ORRI burdens. The El Paso Court of Appeals affirmed summary judgment for the operators, holding that the lease's surrender clause authorized the release and that Texas law does not recognize bad-faith washout as a cognizable tort.

Analysis

El Paso Court of Appeals Affirms Take-Nothing Judgment in Bad-Faith Washout Case Involving Reeves County ORRI Termination

Thomas Craddick and Sandra Staley challenged BPX Properties' 2017 release of a 1943 oil and gas lease covering 1,440 acres in Reeves County, alleging bad-faith washout of their overriding royalty interests when BPX released the lease as part of a transaction with Cimarex that eliminated their ORRI burdens. The El Paso Court of Appeals affirmed summary judgment for the operators, holding that the lease's surrender clause authorized the release and that Texas law does not recognize bad-faith washout as a cognizable tort.

Joel Reese  |  Jul 20, 2026
Overriding Royalty Interest Reeves County Lease Termination Bad-Faith Washout Surrender Clause