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You have just arrived on the new ranch property you just purchased, leaving the rat race of city life and ready to get to work
on the land. You allowed the seller to reserve the minerals so long as he waived his rights to come on to your new property
to drill for oil and gas, which he gladly agreed to do. So, on your rst day on the ranch you are stunned to see pumping
equipment, trucks and a crew ready to set up a pad, build roads, lay pipeline and start drilling. Must be a simple mistake, but
no, the crew tells you they are not here to drill for oil and gas but to drill for the groundwater. Sure, you noticed on your title
commitment that the groundwater rights were severed decades ago but never has anyone drilled for groundwater and the
severance did not include access rights to the surface to drill. After all, you thought, Texas law allows implied surface rights
only to mineral owners not groundwater rights owners … so there was nothing to worry about. A Texas Supreme Court case
changed that in 2016 and the eects of that case should now be a concern to land purchasers in every transaction.
It is well established under Texas law that a property owner may sever the mineral and surface estates and convey them
separately. It is equally established that the mineral estate is deemed the “dominant” estate, giving it implied rights to use
as much of the surface estate as reasonably necessary to produce the minerals. It has long been recognized in oil and
gas law that without these implied rights, the reservation or conveyance of the minerals would otherwise be worthless.
Groundwater can also be severed from the surface estate and conveyed separately. However, it has not been clear whether
the groundwater owner enjoyed the same implied rights as the mineral owner. The Texas Supreme Court answered this
question in Coyote Lake Ranch, LLC v. City of Lubbock, 498 S.W. 3d 53 (Tex. 2016), nding that a severed groundwater right
would likewise be worthless if the groundwater owner could not enter upon the land in order to extract the groundwater.
The Coyote Lake court also ruled that the Accommodation Doctrine, long recognized in oil and gas law, applies to severed
groundwater rights, meaning, in a nutshell, that, absent an agreement to the contrary, a groundwater owner must
accommodate an existing use by the surface owner in extracting the groundwater. For example, if the surface owner is using
the land to grow crops, the groundwater owner must not interfere with that use in its drilling operations.
This continues a trend by the Texas Supreme Court in drawing upon oil and gas law to provide guidance in growing
groundwater matters and disputes. This trend began in earnest in 2012 with the unanimous decision in Edwards Aquifer
Authority v. Day, 369 S.W.3d 814 (Tex. 2012) when the court stated: “Whether groundwater can be owned in place is an
issue we have never decided. But we held long ago that oil and gas are owned in place, and we nd no reason to treat
groundwater dierently.”
TABLES HAVE TURNED BETWEEN GROUNDWATER OWNERS AND SURFACE OWNERS
These rulings have a tremendous impact on landowners and owners of severed groundwater rights. The tables have been
turned as between groundwater owners and surface owners of a piece of property. Before Coyote Lake, the groundwater
owner had a strong incentive to have a surface use agreement to have access to the surface in order to produce and extract
the groundwater. Today that is no longer needed. It is the surface owner who has the strong incentive for a surface use
by Stephen Cooney
May 8, 2019
GROUNDWATER LAW CONTINUES TO EVOLVE –
TEXAS LANDOWNERS BE READY
DALLAS | HOUSTON | WACO
