NUMBER 13-25-00131-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
DEVON ENERGY PRODUCTION
COMPANY, L.P., DEVON ENERGY
CORPORATION, BPX OPERATING
COMPANY, AND BPX PRODUCTION
COMPANY, Appellants,
v.
ROBERT LEON OLIVER, ET AL., Appellees.
ON APPEAL FROM THE 135TH DISTRICT COURT
OF DEWITT COUNTY, TEXAS
SUPPLEMENTAL MEMORANDUM OPINION
Before Chief Justice Tijerina and Justices Peña and West
Supplemental Memorandum Opinion by Justice West
Both appellants and appellees have filed motions for rehearing. We deny all
motions for rehearing, but we provide this supplemental memorandum opinion on
rehearing to fully address issues raised by the parties regarding the valuation method.
Our supplemental memorandum opinion does not alter the Court’s original memorandum
opinion in this appeal which issued on February 26, 2026, nor does it alter the judgment
issued in connection with that opinion. See Devon Energy Prod. Co., L.P. v. Oliver, No.
13-25-00131-CV, 2026 WL 545190, at *1 (Tex. App.—Corpus Christi–Edinburg Feb. 26,
2026, no pet.).
I. BACKGROUND
The parties’ relationship is governed by two oil and gas leases that are
substantively identical. Both leases contain several form provisions followed by several
addendum provisions. The addendum provisions “shall control and supersede” the form
provisions “so far as [they] are in conflict.” Paragraph three of the form provisions (Royalty
Clause) requires appellants to deliver 1/5 of the oil produced or pay the average posted
market price of 1/5 of the oil:
As royalty, lessee[1] covenants and agrees . . . [t]o [(A)] deliver to the credit
of lessor[2], in the pipelines to which lessee may connect its wells, the equal
1/5th part of all oil produced and saved by lessee from said land, or [(B)]
from time to time, at the option of lessee, to pay lessor the average posted
market price of such 1/5th part of such oil at the wells as of the day it is run
to the pipe line or storage tanks . . . .
Paragraph thirty-eight of the addendum provisions (In-Kind Provision) provides appellees
the right to elect an in-kind royalty:
Lessor reserves the right to take, receive and market Lessor’s royalty share
of all oil, in kind, to be delivered by Lessee to Lessor at the wells into
facilities provided by Lessee, or at the direction of Lessor, into pipelines
connected therewith, free and clear of all costs and expense. Lessor may
exercise Lessor’s right to take and market in kind by giving thirty (30) days
1 Appellants are lessee’s successors-in-interest.
2 Appellees are lessors under the lease.
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written notice to Lessee. Pending such notice, Lessee shall purchase or
market Lessor’s oil at a cash price equal to the market value on the day of
sale.
(Emphasis added).
Appellants argue that the Royalty Clause allows them to remit appellees’ royalty
in-kind or by payments based on the average posted market price. Appellants further
argue that the In-Kind Provision’s “market value on the day of sale” valuation method
governs only during the thirty-day in-kind royalty notice period, and such period has not
commenced because appellees have not provided a writing making that election.
Appellees argue the In-Kind Provision’s “market value” valuation method irreconcilably
conflicts with and supersedes the Royalty Clause even where they never made an in-kind
royalty election. The trial court entered a summary judgment order adopting appellees’
position. The jury was instructed accordingly before assessing damages. This appeal
followed.
II. STANDARD OF REVIEW & APPLICABLE LAW
Interpretation of a mineral lease involves questions of law that we review de novo.
Devon Energy Prod. Co., L.P. v. Sheppard, 668 S.W.3d 332, 343 (Tex. 2023). Moreover,
we review both a trial court’s grant of summary judgment and whether a jury charge
misstates the law de novo. JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex.
2021); St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 525 (Tex. 2002); City of Austin v.
Membreno Lopez ex. rel. Lopez, 632 S.W.3d 200, 227 n.21 (Tex. App.—Austin 2021, pet.
denied). In de novo review, we exercise our own discretion and accord no deference to
the trial court’s decision. Vaughn v. Vaughan, 710 S.W.3d 412, 418 (Tex. App.—Eastland
2025, pet. denied) (citing Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)). We
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reverse judgments for charge error when the error was “harmful because it probably
caused the rendition of an improper verdict.” Columbia Rio Grande Healthcare, L.P. v.
Hawley, 284 S.W.3d 851, 856 (Tex. 2009); TEX. R. APP. P. 44.1(a)(1).
When interpreting oil and gas leases, we examine the entire writing and seek to
harmonize the provisions, rejecting interpretations that render provisions meaningless
where it is possible to reasonably construe the provisions in a manner giving effect to
each. Devon Energy Prod. Co., L.P. v. Sheppard, 668 S.W.3d 332, 347 (Tex. 2023); FPL
Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59, 63 (Tex. 2014); Coker v.
Coker, 650 S.W.2d 391, 394 (Tex. 1983); Phoenix Holdings, Ltd. v. Circle C Land Corp.,
987 S.W.2d 933, 937 (Tex. App.—Austin 1999, pet. denied) (explaining our law presumes
the parties intended each provision to have effect). Even where a contract contains
inconsistent form and addendum provisions, we reconcile the provisions, and the
addendum provisions supersede only when there are irreconcilable conflicts. Hou. Expl.
Co. v. Wellington Underwrit. Agencies, Ltd., 352 S.W.3d 462, 472 n.50 (Tex. 2011).
Here, the dispute hinges on the meaning of “pending.” When a disputed contract
term is undefined, courts provide a construction consistent with its “common, ordinary
meaning,” typically by consulting dictionary definitions. Anadarko Petroleum Corp. v. Hou.
Cas. Co., 573 S.W.3d 187, 192 (Tex. 2019). Pending often means “during,” but can also
mean “until.” Pending, MERRIAM-WEBSTER, https://www.merriamwebster.com/dictionary/pending (last visited September 1, 2026); Pending, COLLINS
ENGLISH DICTIONARY, https://www.collinsdictionary.com/us/dictionary/english/pending
(last visited September 1, 2026).
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III. DISCUSSION
If pending means during, as appellants contend, then the In-Kind Provision
provides: “[During] such notice, Lessee shall purchase or market Lessor’s oil at a cash
price equal to the market value on the day of sale.” Appellants argue this reading gives
effect to all provisions in that appellants may choose to remit royalties in-kind or according
to the “average posted market price” until appellees provide a writing making an in-kind
royalty election; then the method changes to “market value on the day of sale”; and then
after the thirty-day notice period ends, the royalty shall be remitted in-kind. 3 A visual
depiction follows:
Lease Writing Given Electing
Signed In-Kind Royalty
30 Day Notice Period
Avg. Posted Market Market Value In-Kind
Price/In-Kind on Day of Sale
3 While it is not our role to construe agreements in a way that ensures the parties struck a good or
fair bargain but rather to construe agreements as written, Nooner Holdings, Ltd. v. Abilene Vill., LLC, 668 S.W.3d 956, 962–63 (Tex. App.—Eastland 2023, pet. denied) (collecting cases), we acknowledge appellants argue that their construction represents a sensible agreement. Appellants assert that average posted market price is based on prices announced by mineral purchasers while market value is based on comparable sales, i.e. actual sales data. Appellants further explained that a change to receiving royalty inkind is unfeasible immediately but requires a notice period for installing new facilities. Appellants thus assert that the provision of market value during the thirty-day notice period would give appellees immediate benefits of their election because market value is more comparable to taking minerals in-kind than receiving an average posted market price payment.
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On the other hand, if pending means until, as appellees contend, the In-Kind
Provision provides: “[Until] such notice, Lessee shall purchase or market Lessor’s oil at a
cash price equal to the market value on the day of sale.” Appellants thus contend that, at
lease signing, market value supplanted and controlled over the Royalty Clause. Such is
depicted below:
Lease Writing Given Electing
Signed In-Kind Royalty
30 Day Notice Period
Market Value on Day of Sale In-Kind
Both parties’ positions are founded on reasonable constructions of the term
“pending.” However, to accept appellees’ position, we would have to conclude that, at the
time of contracting, the parties intended no meaning or effect ever be given to the
language in the Royalty Clause. Given our obligation to ascertain the parties’ intent by
harmonizing the entire lease and avoiding interpretations that render provisions
meaningless when reasonable alternatives exist, we hold the “market value on the day of
sale” only applies during the thirty-day notice period. See Sheppard, 668 S.W.3d at 347;
FPL Energy, 426 S.W.3d at 63; Hou. Expl. Co., 352 S.W.3d at 472 n.50; Coker, 650
S.W.2d at 394.
Appellees do not dispute that their construction of “pending” gives the Royalty
Clause language no effect but cite BlueStone Nat. Res. II, LLC v. Randle for the
proposition that their construction gives meaning to the parties’ agreement that conflicting
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addendum provisions supersede form provisions. 620 S.W.3d 380, 384 (Tex. 2021).
However, in that case, the addendum provision unequivocally called for a different royalty
than that specified in the form provision. Id. The addendum provision was not the last
sentence of an in-kind royalty election clause. Id. The addendum was also not qualified
by the “pending such notice” language of the present case or similar language. See id.
Thus, it was impossible for the BlueStone court to reconcile, harmonize, and give effect
to both provisions. Id. at 391 (holding a provision requiring “gross” proceeds and another
provision requiring “net” proceeds cannot “peaceably coexist”).
In short, the jury should have been instructed that the valuation method was
“average posted market price.” Because the jury assessed damages based on market
value, we find there was harm meriting reversal. Hawley, 284 S.W.3d at 856; TEX. R. APP.
P. 44.1(a)(1).
IV. CONCLUSION
Our prior memorandum opinion and judgment reversing and remanding this case
remains unchanged as supplemented herein. See Oliver, 2026 WL 545190, at *6.
JON WEST
Justice
Delivered and filed on the
15th day of October, 2026.
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