Oil & Gas /

In what was described as “a significant decision for Texas property and energy law,” Texas Supreme Court affirmed a lower court ruling that produced water belongs to the mineral estate unless expressly conveyed to the surface estate owner.  The opinion in Cactus Water Services v. COG Operating announced June 27 resolves a contentious dispute between surface estate owners and mineral estate holders “with far reaching implications for the water midstream sector and upstream oil and gas industry.”

The case arose from a disagreement between Cactus Water Services representing surface estate interests and COG Operating, mineral lessee, over ownership of produced water extracted during oil and gas operations on 37,000 acres in Reeves County.  The Eighth Court of Appeals in El Paso on July 28, 2023, sided with COG – ruling that produced water is not groundwater in the traditional sense but rather a byproduct of mineral extraction, vesting ownership with the mineral estate.

Texas Supreme Court upheld the appeals court by affirming that “a deed or lease using typical language to convey oil and gas rights, though not expressly addressing produced water, includes that substance as part of the conveyance whether the parties knew of its prospective value or not.” The court added, “If the surface owner actually wants to retain ownership of constituent water incidentally and necessarily produced with hydrocarbons, the reservation or exception from the mineral conveyances must be express and cannot be implied.”

The four leases were granted by two surface owners, the Colliers, between 2005 and 2014, and COG drilled 72 horizontal wells that generated nearly 52 million barrels of produced water.  In 2019 and 2020 the Colliers signed “produced water lease agreements” with Cactus Water Services, conveying produced water to Cactus.  COG said it owned the produced water and sued, the trial court agreed with COG, and the court of appeals affirmed.

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Dallas-based Peregrine Energy Partners said last week it acquired producing and non-producing oil and gas minerals and royalties in six states, including Texas and New Mexico.  The newly acquired assets include interests in more than 1,100 producing wells operated by several of the industry’s leading companies.  The Texas and New Mexico assets included more than 400 net mineral acres in Delaware Basin.

The deals completed with multiple unnamed sellers continue Peregrine’s goal to build “a diversified portfolio that blends geographic and product exposure with dependable cash flow.”  With two decades of experience partnering with owners across 30 states, Peregrine said June 24 it plans to keep identifying similar opportunities that support long-term growth in minerals and royalties.

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Houston-based Coterra Energy said last week it will run 9 rigs in Permian Basin in second half of 2025 rather than 7 as announced in May.  Tom Jordan, chairman, president and CEO, said June 24 at a JPMorgan conference in New York that increasing to 9 rigs “reflects his team’s confidence in the stability of the oil market, which had looked like it was struggling this spring.”

Last month, in announcing first quarter earnings, Coterra said it would trim its rig count to 7 from the 10 it envisioned at the beginning of 2025.  Coterra produced 303,000 boed (68 percent liquids) in first quarter.  Jordan said running 9 rigs in Permian rather than 7 “is likely to mean that its capex will run near the high end of the company’s revised full year range of $2.0 to $2.3 billion.”

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The Permian Basin’s hirings, promotions, and other personnel matters in the nation’s biggest oil patch—or in companies who do business here.

J.D “Joey” Hall

Crescent Energy Company announced May 19 the appointment of J.D. “Joey” Hall as Chief Operating Officer, effective June 2, 2025. Hall most recently served as Executive Vice President of Operations at Pioneer Natural Resources Company, where he was also a member of the Executive Committee. During his multi-decade career at Pioneer, Hall held leadership roles overseeing development and operational strategy in multiple regions, including the Eagle Ford and Permian Basin. He received a Bachelor of Science degree in Mechanical Engineering from Texas Tech University. Said Hall: “I am excited to join the Crescent team and a company I see as one of the best-positioned growth stories in the energy sector. I look forward to working with the team to scale operational capabilities and drive sustainable, long-term growth. Our focus will remain on delivering strong financial results while advancing innovation, environmental responsibility, and a culture of safety and operational excellence.” David Rockecharlie, Chief Executive Officer of Crescent, commented, “We are thrilled to welcome Joey Hall to the Crescent team. Joey is a proven leader and trusted teammate with a world-class track record of operational success.”

Colette Hirstius

Gretchen Watkins, President, Shell USA since July 1, 2018, will step down, effective July 31, after seven years in her role, according to a May 5 announcement from Shell. Colette Hirstius, currently Executive Vice President, Gulf of America, will take on the responsibility of President, Shell USA, in addition to her current role, effective August 1. Wael Sawan, Chief Executive Officer, Shell, said: “I would like to thank Gretchen for her service as President of Shell USA, where her leadership has been key to driving performance, discipline, and simplification in our U.S.-based businesses. The United States is an important market for Shell and where we lead the energy sector with our deep-water presence, are the largest off-taker of U.S. LNG, and the nation’s largest mobility network, serving more than seven million customers each day. We see potential for further growth in the United States, and under Colette’s leadership, intend to build on Shell’s competitive strengths as we deliver the secure energy our customers need to power their lives and businesses.”

Steven Thygerson

The American Society of Safety Professionals (ASSP) on May 19 named Steven Thygerson its 2025 Safety Professional of the Year. Thygerson, an environmental and occupational health professor at Brigham Young University, has been instrumental in advancing workplace safety and health through education, research, advocacy, and global outreach. ASSP stated that Thygerson, a Ph.D., inspires the next generation of safety and health professionals by mentoring students and teaching courses that bridge academic knowledge and real-world application. Since 2010, Thygerson has been the faculty advisor for the flourishing ASSP Student Section at Brigham Young. Joshua West, Ph.D., professor and chair of the Department of Public Health at Brigham Young, remarked, “Dr. Thygerson is a master educator who leverages a decade of industry experience to enrich his teaching.” Thygerson will be honored at ASSP’s Safety 2025 Professional Development Conference and Exposition, slated for July 22-24 in Orlando, Fla.

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Dallas-based Producers Midstream II announced plans Monday for its Palo Duro pipeline from Nolan County north to Wheeler County to connect with multiple interstate pipelines.  It will utilize existing infrastructure to provide a new pathway from the Waha residue markets in Permian to Mid Continent residue markets in Anadarko Basin.  Palo Duro will be a 275-mile, high-pressure natural gas pipeline connecting downstream pipelines while providing takeaway from the Permian Basin.

Producers Midstream is targeting an in-service date for Palo Duro of 2026Q1 depending on authorization from U.S. Federal Energy Regulatory Commission.

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Onshore crude oil production in U.S. lower 48 states has more than tripled since January 2010, according to U.S. Energy Information Administration, driven by growth in tight oil production in Permian Basin.  Onshore production includes both legacy oil production primarily from vertically drilled wells and newer tight oil production primarily from horizontally drilled wells.

EIA said Monday legacy production decreased from 2.6 million b/d in 2010 to 2.1 million b/d in 2024.  In the same period, tight oil production increased from 0.8 million b/d to 8.9 million b/d to account for 81 percent of total onshore oil production in lower 48.  Permian Basin accounted for 65 percent of all tight oil production growth and 51 percent of lower 48 oil production in 2024.

After 2020, production in Permian Basin increased at a faster pace than production outside the Permian.  Tight oil production in Permian began growing again in 2021 after the pandemic as crude oil prices increased, but non-Permian production remained low.  After 2020, Permian tight oil production grew at a slower pace than in 2017-19, but by December 2024 Permian production reached 5.6 million b/d – up 45 percent from 2020.

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Chris Wright, U.S. energy secretary, said last week the U.S. Department of Energy is cancelling 24 awards issued by the Office of Clean Energy Demonstrations totaling more than $3.7 billion in taxpayer-funded financial assistance.  Sixteen of the 24 awards were signed between election day Nov. 5, 2024, and inauguration day, Jan. 20, 2025.  The awards, including four in Texas, primarily included funding for carbon capture and sequestration and decarbonization initiatives.

The official announcement May 30 said, “After a thorough and financial review of each award, DOE found that these projects failed to advance the energy needs of the American people, were not economically viable, and would not generate a positive return on investment of taxpayer dollars.”  Wright added, “The Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources, and advance projects that generate the highest possible return on investment.”

The awards in Texas that were canceled include a clean hydrogen complex ($331 million) and Calpine’s carbon storage project ($270 million) at ExxonMobil’s plant in Baytown, a clean methanol project ($99 million) by Orsted in Chambers County east of Houston, and Eastman Chemical’s plastic recycling project ($375 million) in Longview.

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Midland-based Viper Energy, subsidiary of Diamondback Energy, said Tuesday it agreed to acquire Sitio Royalties in an all-equity transaction valued at $4.1 billion.  The agreement, which includes Sitio’s $1.1 billion of debt, is expected to close in 2025Q3.  Diamondback will own 41 percent of Viper’s outstanding common stock after closing.”

“This combination creates a leader in size, scale, float, liquidity and access to investment grade capital in the highly fragmented minerals industry,” Kaes Van’t Hof, CEO of Viper, said.  “Viper is now clearly a must-own public mineral and royalty company in North America with attractive size and scale in the Permian Basin.”

Chris Conoscenti, CEO of Sitio, said, “This transaction provides Sitio’s shareholders with exposure to an entity with significantly greater size, future development visibility, and all of the benefits of the economies of scale to the minerals business.”  Noam Lockshin, chair of the Sitio board, added, “By adding Sitio’s coverage of the Delaware Basin to Viper’s position in the Midland Basin, the combined company will be well positioned in the Permian for years to come.”

Sitio’s assets included 25,300 net royalty acres in the Permian Basin and 9,000 additional net acres in Eagle Ford, DJ and Williston basins.  First quarter production was 42,100 boed (18,900 b/d of crude oil).

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Matt Crocker

ExxonMobil announced April 2 that Karen T. McKee, president of ExxonMobil Product Solutions Company, was to retire effective May 1. The Board of Directors appointed Matt Crocker president, ExxonMobil Product Solutions Company and vice president Exxon Mobil Corporation. He succeeded McKee May 1. Crocker, who has been ExxonMobil’s President/Global Business Solutions since 2023, joined the company in 1995 at the Fawley Refinery in the United Kingdom.

Ben Rodgers

APA Corporation announced on April 14 key updates to its executive leadership team. Ben Rodgers has been named Executive Vice President and Chief Financial Officer, a move which became effective May 12. He will oversee all financial activities and departments, including accounting, audit, investor relations, planning, tax and treasury. Rodgers joined APA in 2018 and previously served as SVP, Finance and Treasurer. He also served as CFO of Altus Midstream.

Larry Larsen

Williams announced April 24 that Larry Larsen has been appointed Executive Vice President and Chief Operating Officer (COO), overseeing all aspects of the company’s transmission, storage and gathering and processing operations, effective May 3. Larsen replaces Micheal Dunn, who was to retire. Larsen most recently served as Williams’ Senior Vice President/Gathering and Processing. “Larry’s deep understanding of Williams’ operations and natural gas focused strategy make him the ideal candidate for our next COO,” said Williams President and CEO Alan Armstrong.

Steven Williams

Enbridge Inc. announced March 11 that Steven W. Williams has been appointed as Chair of the Board, effective May 7 following conclusion of their Annual Meeting of Shareholders, coincident with the retirement of Pamela L. Carter, the current Board Chair. Williams has served as a director of the Enbridge Board since 2022. Mostly recently, he served as Chair of the Human Resources and Compensation Committee of the Board. Williams has more than 40 years of international energy industry experience, including stints as President and CEO of Suncor Energy Inc. from 2012 to 2019.

Linda Tapp

The American Society of Safety Professionals (ASSP) announced on April 7 its new volunteer leaders based on the 2025 Society elections. All terms begin July 1. Linda Tapp will serve as ASSP president for 2025-26. Tapp, president of SafetyFUNdamentals, an occupational safety training and consulting firm, has more than 30 years of experience. An ASSP member since 1989, she has authored several books.

Chris Wauson

USA Compression Partners LP announced March 6 that Chris Wauson has been named the company’s new Chief Operating Officer, a change that became effective April 5. Wauson, then Regional Vice President of Operations, has more than 25 years of operational and commercial experience in the natural gas compression industry. Prior to joining USA Compression, Wauson was with CDM Resource Management. When USA Compression acquired CDM in 2018, he transitioned into the Regional Vice President of Operations role, where he led the Permian Basin business unit.

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Counts of active drilling rigs in Permian Basin and U.S. by Baker Hughes continue sinking to low counts last reported in November 2021.  In the weekly report of May 30, there were 278 rigs in Permian Basin (down 1 from 279 one week earlier, down 32 from 310 a year earlier) and 563 in U.S. (down 3 from 566 one week earlier, down 37 from 600 a year ago).  Texas was unchanged with 266 rigs (287 year ago), and New Mexico fell by 1 rig to 91 (107 year ago).

Eagle Ford in south Texas added a rig for a count of 43 (51 year ago).  Other leading regions were Haynesville with 33, Williston with 31and Marcellus with 24 – all three unchanged in past week.  Oklahoma is third among states with 52 rigs (down 1) followed by Louisiana and North Dakota with 30 each.

Eddy County, N.M., expanded its margin over Lea, N.M., in rigs by adding 2 in the past week to reach 50.  Lea fell by 3 to 38.  Other Permian leaders were Reeves with 30 (unchanged), Martin with 25 (down 1), Midland with 24 (unchanged), Loving with 20 (up 1), Upton with 16 (unchanged) and Reagan with 12 (unchanged).

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