Hogg v. Blackbeard Operating, 656 S.W.3d 671, 673 (Tex. App.—El Paso 2022, no pet. h.)
A winning strategy in an assignment interpretation case often involves finding a persuasive harmonization between the form of assignment and the exhibit containing property descriptions. Cases from recent years show disputes can arise (and do) over whether a detailed exhibit is intended to be descriptive, or intended to limit the scope of interests conveyed. But is less always more? Probably not, as a recent El Paso Court of Appeals case demonstrates that the omission of a lease from an exhibit can lead to a dispute and a lawsuit. At least in this recent case, however, the scope of the assignment form was enough to rescue the omission of a lease from the exhibit.
In this case, the court held that an assignment, which assigned “Lands,” among other defined “Assets,” effectively assigned oil and gas leases expressly described in the assignment, as well as other leases covering the same lands which were not described in the assignment.
This case involved two oil and gas leases executed by the Hoggs, covering lands in Winkler County, Texas. One lease (the 1994 Lease), covered the “SE/4 of Section 24, Block B-10, Public School Lands.” Another lease (the 1998 Lease), covered a portion of that same acreage, being “the SE/4 of the SE/4 and the N/2 of the SE/4 of Section 24, Block B-10, Public School Lands.”
In 2005, the lessee executed an assignment of a number of oil and gas leases in favor of Standolind Oil and Gas Corporation. Notably, an exhibit to that assignment specifically described several oil and gas leases being assigned. That exhibit included a description of the 1994 Lease from the Hoggs, but it did not describe the 1998 Lease from the Hoggs.
The assignor argued that, because the 1998 Lease was not described in the exhibit, that meant it was not assigned under the 2005 assignment.
The appellate court held that the assignment was sufficiently broad to include the 1998 Lease, even though it was not specifically described in the exhibit. The court reasoned that the assignment assigned all interests in specific identified leases (which it defined as the “Leases”), but it also contained even broader language, assigning all of the assignor’s interest in “the land conveyed by the Leases” and lands pooled therewith (which it defined as the “Lands”). In the appellate court’s view, because the assignment described the 1994 Lease, that meant the assignment covered all interests in the 160 acres covered by that lease. The 1998 Lease covered 120 of those same acres. Therefore, according to the appellate court, by its plain terms, the assignment covered all of the assignor’s interest in the 120 acres covered by the 1998 Lease.
In addition, another subparagraph assigned “[a]ll leasehold interest in or to any pools or units that include any Lands...including, but not limited to, those pools or units shown on Exhibit A-1.” That exhibit identified a well which the parties agreed was drilled under the 1998 Lease. According to the appellate court, because that subsection included “all leasehold interest” in that identified well, the assignment transferred all of the assignor’s interest in that lease and well.
The assignor also argued that the assignment does not hold up under the statute of frauds. The appellate court disagreed, reasoning that the assignment identifies the county, survey, block, and section of the described land, which it held was sufficient to identify the property with reasonable certainty.