In one of the most anticipated cases of 2025, the Texas Supreme Court’s decision in Cactus Water Services, LLC v. COG Operating, LLC, No. 23-0676, resolves—on its face—a straightforward question of first impression: who owns produced water when an oil and gas lease doesn’t expressly address it? The Court delivered its answer with unusual speed following oral argument: the mineral lessee, not the surface owner. In essence, the Court held that produced water is a waste byproduct of oil and gas production, necessarily included in a mineral lease unless it expressly states otherwise.
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