Texas Business Court Decision – May 1, 2026

No, 25-BC04B-0007   Robert May, et al. v. INEOS Oil & Gas, (Fourth Division, Judge Sharp)  25-bc04b-0007-may-v-ineos-usa-oil-gas-2026-tex-bus-20.pdf

Contracts/Oil & Gas Leases/Extrinsic Evidence. For the court’s earlier opinion, see the entry of March 27, 2026, in which the court granted in part, and denied in part, defendants’ motion for summary judgment  25-bc04b-0007-may-v-ineos-usa-oil-gas-2026-tex-bus-14.pdf  . In that decision, the court rejected plaintiffs’ argument that their reversionary back-in interest was triggered on a well-by-well basis, concluding the term “Payout” in the parties’ agreement is calculated on an aggregated basis tied to Earning Wells.

Plaintiffs’ cross-motion for summary judgment now asks the court to hold as a matter of law in their favor that the Payout is calculated on a well-by-well basis; they seek to support the argument using post-execution documents, such as internal reports, records, and emails. Defendants object to the admission of this  extrinsic, “course of performance” evidence.

The court sustains defendants’ objections, and strikes the documents from the summary judgment record. The court finds none of the cases cited by plaintiffs actually supported admitting post-execution evidence to construe an otherwise unambiguous contract (two of plaintiffs’ cases involved only pre-execution negotiation evidence, and the remaining four reversed lower courts for relying on extrinsic evidence).

As the court found in its March 27 decision, the agreement’s plain language carries only one reasonable meaning, and  extrinsic, course-of-performance evidence is inadmissible to interpret an unambiguous contract.