Texas Business Court Decision – May 23, 2025

NO. 24-BC08A-002  Slant Operating, LLC v. Octane Energy Operating, LLC (Eighth Division, Judge Bullard

Civil case – Jurisdiction. The parties signed a letter agreement in which they agreed to waive any objections to the other party’s permit applications to drill oil and gas wells from a penetration point on the their land; Slant alleged it waived any objection it had to Octane’s plan to drill five wells from a penetration point on Slant’s leasehold but that Octane refused to waive any objection it had to Slant’s application to drill wells from a penetration point on Octane’s leasehold; Octane filed an official objection to the application Slant filed with the Texas Railroad Commission.

Slant filed an action in Tarrant County for breach of contract, and Octane filed a motion to transfer venue to Midland County; Slant opposed the transfer, but took a nonsuit and filed this action in the Business Court, claiming the action arose out of a qualified transaction and that the amount in controversy was more than $10 million. The court directed jurisdictional briefing explaining how the agreement at issue is a qualified transaction under Texas Government Code Sec. 25A.004(d)(1) and, if it was not, whether the case should be dismissed or transferred. After Slant amended its petition, Octane filed a plea to the jurisdiction.

Held: (1) Under Texas’s liberal pleading standard, for purposes of determining jurisdiction, Slant’s Amended Petition contains sufficient facts to satisfy the $10-million amount-in-controversy requirement; further Slant had pleaded facts sufficient to support its claim that the parties were entitled to receive at least $10 million in aggregate consideration under the letter agreement; thus the letter agreement is a qualified transaction under Texas Government Code Chapter 25A;

(2) The evidence submitted by Octane in support of its plea to jurisdiction failed to refute Slant’s assertion that the letter agreement is a qualified transaction; the fact that the letter agreement does not state the monetary value of Octane’s future waivers does not mean that the contract itself refutes Slant’s allegation that the waivers were worth at least $10 million; Octane’s argument that Slant had not produced evidence supporting its jurisdictional allegations was overcome by the evidence Slant filed in  response, and the challenge is rejected.