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Texas Supreme Court weighs who owns "produced water" in Cactus Water Services v. COG Operating
Summary
At oral argument in case No. 230676, lawyers for Cactus Water Services and COG Operating disputed whether water produced with oil and gas belongs to surface/landowners or to oil and gas lessees, touching on precedent, Railroad Commission duties, Natural Resources Code chapter 122, liability, and the economic costs of disposal.
A sharply contested property question over so-called "produced water" occupied the Texas Supreme Court at oral argument in Cactus Water Services v. COG Operating (No. 230676). The court heard competing legal theories about whether naturally occurring water that comes up with oil and gas is owned by the surface/landowner or by the oil-and-gas lessee and operator.
Miss Livingston, counsel for petitioner Cactus Water Services, told the court that “the issue here is who owns the naturally occurring water that comes up when oil and gas is produced.” She argued that longstanding precedent treating mineral-bearing water as an incident of surface ownership supports treating the produced water as belonging to the landowner unless a conveyance says otherwise.
Miss Stokes, counsel for respondent COG Operating, countered that “this case is about oil and gas, not water.” Stokes said COG’s leases grant the lessee “the wet black stuff that comes out of the ground, all of the production from an oil and gas…
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