Court of Appeals of Texas, Fourth District, San Antonio
the 343rd Judicial District Court, McMullen County, Texas
Trial Court No. M-14-0029-CV-C Honorable Janna K. Whatley,
Sitting: Rebeca C. Martinez, Justice Patricia O. Alvarez,
Justice Luz Elena D. Chapa, Justice
Concurring and Dissenting Opinion by: Rebeca C. Martinez,
PATRICIA O. ALVAREZ, JUSTICE
Swift Energy Operating, LLC sued Appellees for damage to its
leased minerals allegedly caused by H2S/CO2 injectate
spreading from Appellees' nearby injection well.
Appellees asserted a statute of limitations affirmative
defense, and both sides moved for summary judgment. Because
Appellees conclusively established their affirmative defense
only to Swift's PCQ lease claims, we affirm the trial
court's order in part, reverse it in part, and remand
case concerns damage caused by the underground spread of
H2S/CO2 gas from an injection well. The damages Swift seeks
pertain to its leases near Appellees' injection well in
Swift's PCQ Lease
2009, Swift and Leo O. Quintanilla entered into a lease (the
PCQ lease) for minerals underlying much of Quintanilla's
ranch. The PCQ lease covers most depths below 2, 000 feet for
over 4, 200 acres of the approximately 4, 271-acre
Quintanilla ranch. Swift's leased depths include some
depths in the Olmos and Eagle Ford formations.
Swift's Other (Non-PCQ) Leases
has other leases in the area, some contiguous, some not, to
the PCQ lease. Swift's PCQ lease and its eight other
(non-PCQ) leases are all near Appellees' injection well.
Regency's Injection Well
are Regency Field Services LLC, Regency Energy Partners LP,
Regency GP LP, and Regency GP LLC (collectively Regency). In
2006, Regency sought permission from the Texas Railroad
Commission (RRC) to allow Regency to operate an injection
well (the Tilden Injection Well) in McMullen County to
dispose of a gaseous mixture of concentrated hydrogen sulfide
(H2S) and carbon dioxide (CO2). Regency sought to pump the
H2S/CO2 mixture, the injectate, into the Wilcox formation.
permit application, Regency submitted a plume model that
predicted the injectate would spread horizontally by about 2,
200 feet after forty years of injection.
Examiner's Report, issued in response to Regency's
permit application, states there is "at least 250 feet
of shale overlying the disposal interval and at least 100
feet of shale below the disposal interval. These shale
barriers will prevent the [vertical] migration of acid gas
from the disposal zone." The RRC approved Regency's
plan to use H2S resistant materials, such as stainless steel,
for the injection well and the RRC issued the permit for the
Tilden Injection Well. In February 2012, the RRC approved an
increased disposal rate. Regency's revised model
predicted a horizontal spread of 2, 900 feet after thirty
years of injection.
JCB Horton #1 Well Contamination
August 2012, Layline Petroleum was operating the JCB Horton
#1 well. The JCB Horton #1 well is located on the Quintanilla
ranch, and is about 3, 300 feet northeast of the Tilden
Injection Well. That August, Layline detected H2S in the JCB
Horton #1 well; the H2S was tested and determined to have
originated from Regency's Tilden Injection Well.
the plume was not predicted to spread to the JCB Horton #1
well even after thirty years of injection, in 2012, Layline
had to plug and cap its JCB Horton #1 well because of the H2S
contamination from Regency's injectate.
Layline's Notice to Swift of Spreading H2S Plume
October 23, 2012, Layline's Aaron Brougher e-mailed
Swift's Richard Kimberlin with this message:
Subject: McMullen County H2S outbreak
Layline Petroleum is an offset operator of yours in McMullen
County. I believe you have some of the deep rights where we
have Olmos operation on the main Quintanilla Ranch.
Regency has an H2S injection well just to our west that has
exceeded their permit and have forced us to plug a producing
well. It looks as though Swift has 2 horizontal wells
permitted in the area and the bottom hole locations seem very
near this injection well.
the same day, Swift's Bob Redweik responded to
Layline's Aaron Brougher with this request:
Subject: H2S BREAK OUT FROM INJECTION WELL IN McMULLEN COUNTY
Can you provide me some additional details including our
permitted well names which could be affected by this issue so
that we can look into this further?
evening, Layline's Aaron Brougher responded to
Swift's Bob Redweik's request and identified the
permitted wells that could be affected.
The permitted wells are: PC-Q EF #5H, #8H and #10H
October 29, 2012, Layline's Aaron Brougher asked
Swift's Bob Redweik if Swift would like to participate in
the upcoming RRC hearing with Layline. Swift's Bob
Redweik responded with "I will say a tentative yes at
present. Please keep me in the loop."