## Facts

- The Elliffs owned surface and royalty interests in 3,054.9 acres in Nueces County, Texas, including a producing well (“Elliff No. 1”).
- Their land overlaid roughly half of a large gas-and-distillate reservoir; the remainder underlay adjacent land.
- Texon drilled an offset well on the neighboring tract approximately 466 feet from the Elliffs’ boundary.
- At about 6,838 feet, Texon’s well blew out, ignited, and cratered; control efforts failed, and large quantities of gas, distillate, and some oil escaped into the air from the common reservoir.
- Subsurface conditions expanded the event so that Elliff No. 1 was enveloped and destroyed; it also blew out, cratered, ignited, and burned for years; two water wells on the Elliffs’ land also blew out.
- The Elliffs alleged the drainage, dissipation, and related surface losses (including harm to cattle) were proximately caused by Texon’s negligence in allowing the blowout.

## Issues

1. Whether the rule of capture bars recovery when a neighbor’s negligent drilling causes a blowout that wastes or destroys oil and gas from a common reservoir underlying the plaintiff’s land.
2. Whether minerals dissipated into the air by a negligent blowout are treated as noncompensable “drainage” under the rule of capture or as compensable destruction of the plaintiff’s property.

## Decision

- The trial court entered judgment for the Elliffs on a jury verdict finding Texon negligent and awarding damages for wasted hydrocarbons and associated losses.
- The court of civil appeals reversed, holding the rule of capture barred recovery for the lost oil and gas.
- The Supreme Court of Texas reversed the court of civil appeals, holding the rule of capture does not immunize negligent waste or destruction of another’s oil and gas.
- The case was remanded to the court of civil appeals to address issues it had not reached, including remaining questions affecting recovery and damages.

## Legal Principles

- In Texas, landowners are treated as having title to oil and gas in place beneath their land, subject to limitations imposed by the rule of capture and valid governmental regulation.
- The rule of capture protects lawful and reasonable production that incidentally drains minerals from a common reservoir; it does not extend to negligent operations that waste or destroy another’s minerals.
- When hydrocarbons are dissipated as a direct result of negligent drilling practices (rather than being produced and reduced to possession through lawful capture), the injured owner may seek damages because the minerals are treated as belonging to that owner at the time of the waste.
- Correlative rights and negligence principles limit capture-based immunity; operators must conduct drilling in a reasonably prudent manner and may be liable for negligent dissipation of the common supply.

## Conclusion

The Texas Supreme Court held that the rule of capture does not bar liability for a negligent blowout that wastes or destroys hydrocarbons from beneath neighboring land, and it reinstated the possibility of damages for such negligent destruction by reversing and remanding for further appellate consideration.


Elliff v. Texon Drilling Co., 210 S.W.2d 558 (Tex. 1948)