Supreme Court
Occidental Permian, Ltd v. Citation 2002 Inv. LLC
- Case number: 23-0037
- Legal category: Oil and Gas
- Subtype: Assignments
- Set for oral argument: March 21, 2024
Case Summary
The issue in this case is whether an assignment of mineral interests is limited by the depths described in the referenced exhibit.
In 1987, Shell Western E&P, Inc. assigned to Citation a large oil-and-gas property. The assignment incorporated and attached an exhibit that described the conveyed property. Some of the descriptions referenced property depth, describing a tract of land down to a certain number of feet. In 1997, Shell purported to transfer certain oil-and-gas interests to Occidental, some of which had been previously conveyed to Citation in the Shell-Citation assignment but for deeper interests than those referenced in the exhibit. Both Occidental and Citation later attempted to assign to third parties some of the interests they obtained from Shell, leaving the “deep rights” conveyed in the Shell-Occidental assignment in dispute.
Occidental contends that the interests conveyed in the Shell-Citation assignment were depth-limited, leaving Shell free to assign its deep rights to them. Citation argues that the Shell-Citation assignment was not depth-limited. Thus, Citation and the third party it sold to own all the interests described in the exhibit. The trial court held that the assignment was a limited-depth grant that did not convey Shell’s deep rights to Citation. The court of appeals reversed, holding that the assignment was not depth-limited, leaving Citation and its transferee the sole owners of the described interests.
Occidental filed a petition for review in the Supreme Court, arguing that the referenced exhibit clearly describes the depths of the interests to be conveyed. It further argues that the court of appeals erred by construing the assignment’s “subject to” language as an expansion rather than a limitation and by construing a Mother Hubbard clause as a general grant. The Court granted Occidental’s petition for review.
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