On May 9, 2025, the Texas Supreme Court issued a per curiam opinion in Roxo Energy Co., LLC v. Baxsto, LLC, — S.W.3d —, No. 23-0564, 2025 WL 1349581 (Tex. May 9, 2025), in which it held that a lessee was entitled to judgment as a matter of law on a lessor’s claims for fraud, fraudulent inducement, statutory fraud, and fraud by non-disclosure, all arising from the lessee’s alleged oral representations that were inconsistent with the parties’ written contracts.
In October 2016, Baxsto, LLC (“Baxsto”), which owned mineral interests in Howard and Borden Counties, Texas, entered into negotiations with the CEO of Roxo Energy Co., LLC (“Roxo”). Baxsto alleged that Roxo made the following representations during negotiations:
- If Baxsto quickly executed an oil and gas lease, Roxo would give Baxsto the best deal for all the owners in the area;
- Roxo was not in the business of flipping leases to new operators;
- Roxo would drill and develop the land.
Additionally, Roxo repeatedly indicated that it was interested in purchasing the minerals. Eventually, the parties executed a paid-up oil and gas lease, a lease memorandum, and lease purchase agreement. The agreements provided, in part, that Roxo could only record the lease after paying Baxsto a bonus of $5,000.00 per acre and that Roxo could purchase the lease within a certain period. Roxo received two extensions on its lease purchase option—the first of which included a “most favored nations” clause stating that if Roxo paid a larger bonus to another qualifying lessor within the next six months, Baxsto would receive the same amount from Roxo. Before the second extension, Roxo disclosed that it was negotiating with Navigator Oil and Gas (“Navigator”), another mineral owner in the same acreage. Roxo paid the bonus and acquired the lease after the second extension. Not long...
