• Wednesday, 16 May, 2012

Supermajor wins Texas ruling over Hawkins field royalties

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 10 January 2003 01:17 GMT

A Texas judge has ruled in favour of ExxonMobil, sparing the US supermajor from paying millions of dollars in back royalties to the Lone Star state for exploiting reserves discovered in the Hawkins field in 1940.

The judge's ruling rejected a claim by the Texas attorney general's office that the company drilled its Hawkins field wells too close to state land and engaged in injection practices that forced oil and gas out from under state property without permission.

Attorney General John Cornyn maintained that the state had acquired in the 1930s the mineral rights underlying many tracts of land in east Texas, including the disputed 50-acre right-of-way strip that traverses the city of Hawkins.

ExxonMobil said that in the 70 years the state claimed to own the tracts, it never attempted to lease the acreage for oil and gas development, nor to drill its own wells to recover reserves beneath the tracts. In addition, ExxonMobil argued that the state approved a plan of unitisation that came into effect in 1975 to increase oil production on the Hawkins field through secondary recovery operations.

The judge's final ruling said the state had failed to offer any evidence that the actions enumerated in its complaint caused any damage or injury to the state.

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