Background and Contractual Framework

Slant Operating, LLC and Octane Energy Operating, LLC entered into a February 22, 2023 letter agreement to facilitate drilling operations by reciprocally waiving objections to each other's off-lease penetration point permit applications. Under the agreement, Slant Operating waived its right to protest Octane's permit application for the Green Gables Wells, while Octane agreed to "waive its right to protest future Slant drilling permit applications insofar ... as they concern Off Lease Penetration Points where Octane is the offset operator of record." The parties also agreed to exchange daily drilling, completion, flowback, and production data for their respective wells.

Slant Operating and its affiliate Slant WTX Holdings II, LLC are part of the same family of entities, with Slant Operating serving as the well operator and Slant Holdings owning the underlying leasehold rights. According to the plaintiffs' pleadings, the Letter Agreement "was intended to confer a direct benefit on" Slant Holdings through Octane's promise to waive protest rights on future drilling permits, and Slant Operating's role as operator "is definitionally intended to benefit" Slant Holdings—a relationship Octane allegedly understood because "Octane is itself an oil and gas operator."

The Alleged Breach and Damages Sought

Plaintiffs allege that Octane breached the Letter Agreement by refusing to provide a waiver for Slant Operating to drill the Gardendale Wells off-lease. Both Slant Operating and Slant Holdings sued seeking three categories of damages: lost revenue for six Gardendale Wells, lost revenue for 35 additional future unidentified wells, and drilling redesign costs for the Gardendale Wells. Octane filed both a traditional and no-evidence motion for summary judgment on plaintiffs' damages, as well as a motion to strike plaintiffs' untimely summary judgment evidence.

Procedural Rulings on Evidence and Summary Judgment

The court granted Octane's motion to strike plaintiffs' untimely summary judgment evidence. Under Texas Rule of Civil Procedure 166a(c), a summary judgment nonmovant must file its response and opposing evidence no more than seven days before the hearing, except on leave of court. The court cited Benchmark Bank v. Crowder for the principle that a late-filed summary judgment affidavit is improperly before the trial court when the record lacks an order granting leave of court. After considering the motions, briefs, timely-filed evidence, and oral arguments, the court granted Octane's motion for summary judgment in part and denied it in part. The specific allocation of which claims survived and which were eliminated was not detailed in the portion of the opinion provided.