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Texas high court hears dispute over ownership of water produced with oil and gas
Summary
At oral argument in Cactus Water Services v. COG Operating, attorneys debated whether naturally occurring water produced with oil and gas belongs to surface owners by default or to lessees as part of the oil-and‑gas product stream, and how that ownership would interact with Railroad Commission disposal obligations and the Natural Resources Code.
The Supreme Court of Texas heard argument in Cactus Water Services v. COG Operating over whether naturally occurring water that appears during oil and gas production is owned by the surface owner or by the oil and gas lessee.
The question matters because produced water can contain valuable trace elements, hazardous constituents, and large disposal costs. Counsel for petitioner Cactus Water Services said the central dispute is “who owns the naturally occurring water that comes up when oil and gas is produced.” Counsel for respondent, COG Operating, urged the court to treat the dispute as an oil-and-gas question: “This case is about oil and gas, not water.”
The case tests whether Robinson and related precedent, which treat mineral-bearing water as an incident of surface ownership absent specific conveying language, govern produced water that appears in the oil-and-gas production stream; or whether COG’s long‑standing leases and the…
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