Full Opinion

NUMBER 13-25-00131-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI – EDINBURG DEVON ENERGY PRODUCTION COMPANY, L.P., DEVON ENERGY CORPORATION, BPX OPERATING COMPANY, AND BPX PRODUCTION COMPANY, Appellants, v. ROBERT LEON OLIVER, ET AL., Appellees. ON APPEAL FROM THE 135TH DISTRICT COURT OF DEWITT COUNTY, TEXAS SUPPLEMENTAL MEMORANDUM OPINION Before Chief Justice Tijerina and Justices Peña and West Supplemental Memorandum Opinion by Justice West Both appellants and appellees have filed motions for rehearing. We deny all motions for rehearing, but we provide this supplemental memorandum opinion on rehearing to fully address issues raised by the parties regarding the valuation method. Our supplemental memorandum opinion does not alter the Court’s original memorandum opinion in this appeal which issued on February 26, 2026, nor does it alter the judgment issued in connection with that opinion. See Devon Energy Prod. Co., L.P. v. Oliver, No. 13-25-00131-CV, 2026 WL 545190, at *1 (Tex. App.—Corpus Christi–Edinburg Feb. 26, 2026, no pet.). I. BACKGROUND The parties’ relationship is governed by two oil and gas leases that are substantively identical. Both leases contain several form provisions followed by several addendum provisions. The addendum provisions “shall control and supersede” the form provisions “so far as [they] are in conflict.” Paragraph three of the form provisions (Royalty Clause) requires appellants to deliver 1/5 of the oil produced or pay the average posted market price of 1/5 of the oil: As royalty, lessee[1] covenants and agrees . . . [t]o [(A)] deliver to the credit of lessor[2], in the pipelines to which lessee may connect its wells, the equal 1/5th part of all oil produced and saved by lessee from said land, or [(B)] from time to time, at the option of lessee, to pay lessor the average posted market price of such 1/5th part of such oil at the wells as of the day it is run to the pipe line or storage tanks . . . . Paragraph thirty-eight of the addendum provisions (In-Kind Provision) provides appellees the right to elect an in-kind royalty: Lessor reserves the right to take, receive and market Lessor’s royalty share of all oil, in kind, to be delivered by Lessee to Lessor at the wells into facilities provided by Lessee, or at the direction of Lessor, into pipelines connected therewith, free and clear of all costs and expense. Lessor may exercise Lessor’s right to take and market in kind by giving thirty (30) days 1 Appellants are lessee’s successors-in-interest. 2 Appellees are lessors under the lease. 2 written notice to Lessee. Pending such notice, Lessee shall purchase or market Lessor’s oil at a cash price equal to the market value on the day of sale. (Emphasis added). Appellants argue that the Royalty Clause allows them to remit appellees’ royalty in-kind or by payments based on the average posted market price. Appellants further argue that the In-Kind Provision’s “market value on the day of sale” valuation method governs only during the thirty-day in-kind royalty notice period, and such period has not commenced because appellees have not provided a writing making that election. Appellees argue the In-Kind Provision’s “market value” valuation method irreconcilably conflicts with and supersedes the Royalty Clause even where they never made an in-kind royalty election. The trial court entered a summary judgment order adopting appellees’ position. The jury was instructed accordingly before assessing damages. This appeal followed. II. STANDARD OF REVIEW & APPLICABLE LAW Interpretation of a mineral lease involves questions of law that we review de novo. Devon Energy Prod. Co., L.P. v. Sheppard, 668 S.W.3d 332, 343 (Tex. 2023). Moreover, we review both a trial court’s grant of summary judgment and whether a jury charge misstates the law de novo. JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021); St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 525 (Tex. 2002); City of Austin v. Membreno Lopez ex. rel. Lopez, 632 S.W.3d 200, 227 n.21 (Tex. App.—Austin 2021, pet. denied). In de novo review, we exercise our own discretion and accord no deference to the trial court’s decision. Vaughn v. Vaughan, 710 S.W.3d 412, 418 (Tex. App.—Eastland 2025, pet. denied) (citing Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)). We 3 reverse judgments for charge error when the error was “harmful because it probably caused the rendition of an improper verdict.” Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 856 (Tex. 2009); TEX. R. APP. P. 44.1(a)(1). When interpreting oil and gas leases, we examine the entire writing and seek to harmonize the provisions, rejecting interpretations that render provisions meaningless where it is possible to reasonably construe the provisions in a manner giving effect to each. Devon Energy Prod. Co., L.P. v. Sheppard, 668 S.W.3d 332, 347 (Tex. 2023); FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59, 63 (Tex. 2014); Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983); Phoenix Holdings, Ltd. v. Circle C Land Corp., 987 S.W.2d 933, 937 (Tex. App.—Austin 1999, pet. denied) (explaining our law presumes the parties intended each provision to have effect). Even where a contract contains inconsistent form and addendum provisions, we reconcile the provisions, and the addendum provisions supersede only when there are irreconcilable conflicts. Hou. Expl. Co. v. Wellington Underwrit. Agencies, Ltd., 352 S.W.3d 462, 472 n.50 (Tex. 2011). Here, the dispute hinges on the meaning of “pending.” When a disputed contract term is undefined, courts provide a construction consistent with its “common, ordinary meaning,” typically by consulting dictionary definitions. Anadarko Petroleum Corp. v. Hou. Cas. Co., 573 S.W.3d 187, 192 (Tex. 2019). Pending often means “during,” but can also mean “until.” Pending, MERRIAM-WEBSTER, https://www.merriam- webster.com/dictionary/pending (last visited September 1, 2026); Pending, COLLINS ENGLISH DICTIONARY, https://www.collinsdictionary.com/us/dictionary/english/pending (last visited September 1, 2026). 4 III. DISCUSSION If pending means during, as appellants contend, then the In-Kind Provision provides: “[During] such notice, Lessee shall purchase or market Lessor’s oil at a cash price equal to the market value on the day of sale.” Appellants argue this reading gives effect to all provisions in that appellants may choose to remit royalties in-kind or according to the “average posted market price” until appellees provide a writing making an in-kind royalty election; then the method changes to “market value on the day of sale”; and then after the thirty-day notice period ends, the royalty shall be remitted in-kind. 3 A visual depiction follows: Lease Writing Given Electing Signed In-Kind Royalty 30 Day Notice Period Avg. Posted Market Market Value In-Kind Price/In-Kind on Day of Sale 3 While it is not our role to construe agreements in a way that ensures the parties struck a good or fair bargain but rather to construe agreements as written, Nooner Holdings, Ltd. v. Abilene Vill., LLC, 668 S.W.3d 956, 962–63 (Tex. App.—Eastland 2023, pet. denied) (collecting cases), we acknowledge appellants argue that their construction represents a sensible agreement. Appellants assert that average posted market price is based on prices announced by mineral purchasers while market value is based on comparable sales, i.e. actual sales data. Appellants further explained that a change to receiving royalty in- kind is unfeasible immediately but requires a notice period for installing new facilities. Appellants thus assert that the provision of market value during the thirty-day notice period would give appellees immediate benefits of their election because market value is more comparable to taking minerals in-kind than receiving an average posted market price payment. 5 On the other hand, if pending means until, as appellees contend, the In-Kind Provision provides: “[Until] such notice, Lessee shall purchase or market Lessor’s oil at a cash price equal to the market value on the day of sale.” Appellants thus contend that, at lease signing, market value supplanted and controlled over the Royalty Clause. Such is depicted below: Lease Writing Given Electing Signed In-Kind Royalty 30 Day Notice Period Market Value on Day of Sale In-Kind Both parties’ positions are founded on reasonable constructions of the term “pending.” However, to accept appellees’ position, we would have to conclude that, at the time of contracting, the parties intended no meaning or effect ever be given to the language in the Royalty Clause. Given our obligation to ascertain the parties’ intent by harmonizing the entire lease and avoiding interpretations that render provisions meaningless when reasonable alternatives exist, we hold the “market value on the day of sale” only applies during the thirty-day notice period. See Sheppard, 668 S.W.3d at 347; FPL Energy, 426 S.W.3d at 63; Hou. Expl. Co., 352 S.W.3d at 472 n.50; Coker, 650 S.W.2d at 394. Appellees do not dispute that their construction of “pending” gives the Royalty Clause language no effect but cite BlueStone Nat. Res. II, LLC v. Randle for the proposition that their construction gives meaning to the parties’ agreement that conflicting 6 addendum provisions supersede form provisions. 620 S.W.3d 380, 384 (Tex. 2021). However, in that case, the addendum provision unequivocally called for a different royalty than that specified in the form provision. Id. The addendum provision was not the last sentence of an in-kind royalty election clause. Id. The addendum was also not qualified by the “pending such notice” language of the present case or similar language. See id. Thus, it was impossible for the BlueStone court to reconcile, harmonize, and give effect to both provisions. Id. at 391 (holding a provision requiring “gross” proceeds and another provision requiring “net” proceeds cannot “peaceably coexist”). In short, the jury should have been instructed that the valuation method was “average posted market price.” Because the jury assessed damages based on market value, we find there was harm meriting reversal. Hawley, 284 S.W.3d at 856; TEX. R. APP. P. 44.1(a)(1). IV. CONCLUSION Our prior memorandum opinion and judgment reversing and remanding this case remains unchanged as supplemented herein. See Oliver, 2026 WL 545190, at *6. JON WEST Justice Delivered and filed on the 15th day of October, 2026. 7