Texas Business Court Decisions – December 22, 2025
On December 22, 2025, the Business Court issued three opinions in No. 24-BC08A-0002 Slant Operating LLC, et al. v. Octane Energy Operating, LLC.
Slant Operating LLC, et al. v. Octane Energy Operating, LLC. Division (Eighth Division, Judge Bullard) 24-bc08a-0002-slant-operating-v-octane-energy-operating-25-tex-bus-52.pdf
Jurisdiction/Contracts and Third-party Beneficiary Claims. Slant Operating and Octane operate oil and gas wells on adjacent leaseholds, and they executed a “Point of Penetration Waiver Agreement” under which they agreed to reciprocally waive future objections to the other’s “off-lease penetration point” permit applications with the Texas Railroad Commission. Slant Operating waived its objections to Octane’s plans to drill five wells from a penetration point on Slant’s leasehold, but Octane objected when Slant Operating sought to drill wells from a penetration point on Octane’s leasehold. Slant Operating brought this breach-of-contract action, and in its Second Amended Petition it added two plaintiffs, leaseholder Slant Holdings and parent company, Slant Energy II, on a theory they were third party beneficiaries to the waiver agreement (Slant Energy II subsequently nonsuited its claims against Octane, leaving Slant Operating and Slant Holdings as plaintiffs). This order addresses the Slant entities’ motion to establish jurisdiction, Octane’s plea to jurisdiction on the third-party beneficiary claims and its “No-evidence” motion for summary judgment on those claims, and the Slant entities’ motion for partial summary judgment on the third-party beneficiary claims.
Held: (1) the Slant entities’ pleaded facts are sufficient to provide the court with jurisdiction and authority to determine their claims for damages – see Slant Operating, LLC v. Octane Energy Operating LLC, 717 S.W. 3d 409 (8th Div. 2025); once the court determines that is has acquired jurisdiction, any partial disposition of this suit does not divest the Court of subject-matter jurisdiction to adjudicate the remaining claims.
(2) With respect to Octane’s plea to jurisdiction, Slant Holdings is not a third-party beneficiary of the letter agreement between Slant Operating and Octane and therefore lacks standing to assert or recover on its breach-of-contract claim against Octane; Slant’s pleadings fail to allege facts demonstrating the court’s subject-matter jurisdiction over Slant Holdings; the letter agreement is no more than a reciprocal agreement to benefit operations by two operators – Octane and Slant Operating; to assume the agreement benefits Slant Holdings, the court would have to violate well-established Texas law disfavoring conferring third-party beneficiary status on noncontracting parties. Nor does Texas Railroad Commission Rule 86 provide a basis for Slant Holdings’ standing as a third-party beneficiary. Octane’s plea to jurisdiction is sustained, and Slant Holdings’ claim is dismissed.
(3) With respect to Octane’s No-Evidence Motion for Summary Judgment, the court’s ruling on standing moots this argument.
(4) With respect to the Slant entities’ Motion for Partial Summary Judgment, Slant Holdings is not a third-party creditor beneficiary of the letter agreement because the duties Slant Operating may owe to Slant Holdings as the mineral asset owner do not automatically confer on Slant Holdings the right to benefit from or enforce any Slant Operating contract, and Slant Holdings is not a creditor beneficiary; the court rejects Slant’s argument that financial unity of the Slant entities makes Slant Holdings a creditor beneficiary; nor is there support for Slant’s argument that language in the contract referring to Slant Enterprise made Octane aware that it was contracting with Slant Holdings. The motion for partial summary judgment on the issue that Slant Holdings is a third-party creditor beneficiary is denied.
No. 24-BC08A-002 Slant Operating LLC, et al. v. Octane Energy Operating LLC (Eighth Division, Judge Bullard) 24-bc08a-0002-slant-operating-v-octane-energy-operating-25-tex-bus-53.pdf
Breach of contract. In this opinion, the court addresses motions for summary judgment regarding liability for Octane’s alleged breach of the reciprocal waiver agreement. The court grants Slant’s motion for summary judgment.
Held: (1) The letter agreement on waiver of objections was a valid, enforceable contract, showing there was a meeting of the minds on the contract’s essential terms and that the parties consented to the terms and execution and delivery of the agreement by signing and emailing copies to each other; Slant Operating established that it performed its contractual obligations by providing waivers for Octane’s Green Gables wells; and Slant Operating establish Octane breached the agreement by refusing to provide a waiver and objecting to Slant’s drilling of its Gardendale Wells.
(2) Octane has failed its burden of raising a genuine issue of material fact on the existence of a valid enforceable contract, and the court rejects Octane’s argument that Slant’s construction of the agreement’s Future Waiver Provision is unreasonable, oppressive, or likely to lead to absurd results.
(3) Slant Operating did not fail to exhaust administrative remedies before filing suit; nothing indicates the Legislature intended to give the Texas Railroad Commission exclusive jurisdiction over the type of breach-of-contract claim before the court; there are no rules or statutes indicating the Commission has exclusive jurisdiction over contract claims where the Commission is not a party.
(4) The court rejects Octane’s waiver, estoppel, and excuse defenses, as there is no evidence that Slant Operating demonstrated an unequivocal intent to waive a right or that it made any false representations warranting estoppel or quasi-estoppel; nor is there evidence that Slant committed a material breach of the letter agreement, thereby excusing Octane’s nonperformance. Slant Operating’s Motion for partial Summary Judgment on liability is granted, and Octane’s Motion for Summary Judgment is denied.
No. 24-BC08A-0002 Slant Operating, LLC v. Octane Energy Operating, LLC (8th Division, Judge Bullard) 24-bc08a-0002-slant-operating-v-octane-energy-operating-25-tex-bus-54.pdf
Damages. Before the Court are Octane’s Motion for Summary Judgment on Plaintiffs’ Damages and Octane’s Motion to Strike Plaintiffs’ Untimely Summary Judgment Evidence. Slant’s motion is granted in part, and Motion to Strike is granted.
Held: (1) Plaintiffs failed to meet the Court’s deadline for filing an affidavit, and it is stricken.
(2) Octane is entitled to summary judgment on Slant Holdings’ claim fort lost revenue/production from the Gardendale Wells and lost revenue/production for 35 additional unidentified future wells; further, Octane is entitled to summary judgment as to Slant Holdings only for redesign costs for the Gardendale Wells; Slant Holdings is not entitled to damages as a matter of law as it is neither a party nor an intended third-party beneficiary of the letter agreement concerning waiver of objection.
(3) While there is a genuine issue of material fact as to whether Slant Operating is entitled to damages on its breach of contract claim as to future wells (because Octane materially breached the agreement with respect to the Gardendale Wells, Slant Operating was not required to satisfy any conditions precedent, such as requesting a waiver, to bring a breach of contract claim for the future wells); however, Slant Holdings is not entitled to damages for any future wells as it is neither a signatory nor a third-party beneficiary of the letter agreement.
(4) Octane is entitled to summary judgment on Slant Operating’s claims for lost revenue from the Gardendale Wells and the 35 future wells as Slant Operating never owned the Gardendale Wells’ mineral assets or the rights to any other wells at issue; because Slant Operating does not own or have rights to the mineral assets, it has no right to recover damages for lost revenues associated with the minerals produced from those wells; nor can Slant Operating recover damages on behalf of Slant Holdings for the reasons previously addressed (see 2 above).
(5) Slant Operating has produced evidence of redesign costs and additional expenses incurred as a result of Octane’s breach of the agreement, and Octane is not entitled to summary judgment on the claim for those costs and expenses; further, Slant Operating produced evidence of expectancy damages, thereby precluding the grant of Octane’s motion for summary judgment; however, there is no evidence to support Slant Operating’s claim for reliance damages, and Octane is granted summary judgment on that claim.