A fascinating dirt … err water law (?) decision from the Texas Supreme Court.

We were all set to write up the recent decision in Cactus Water Services, LLC v. COG Operating, LLC, No. 23-0676 (June 27, 2025), when the Texas Agriculture Law Blog beat us to the punch and published a great summary and analysis of the case that we could never beat. Check out Tiffany Lashmet, “Texas Supreme Court: Produced Water Conveys to Mineral Lessee” (June 30, 2025) for details and analysis. 

The fight was between the surface owner and the owner of the mineral estate about who owns “produced water,” a fancy way of saying the byproduct of fracking for oil and gas. As the court described it, it is “a mixture of fracking fluid, hypersaline brine, residual hydrocarbons, and other substances of varying concentrations.” Slip op. at 6-7. Perhaps not surprisingly, until fairly recently, this stuff was considered waste and no one really wanted it. But “recent technological innovations have given new purpose to produced water as a potentially lucrative commodity.” Slip op. at 9.

With that background, dive right in: 

The Court held it “beyond cavil, and not in genuine dispute” that produced water is oil and gas waste. The leases do not mention or define “waste” or “produced water,” but the Court said this was expected. Because waste is an inevitable byproduct of oil and gas operations, it goes without saying that the right to produce hydrocarbons necessarily contemplates and encompasses the right to the resulting waste. This, the Court reasoned, was the understanding at the time of the mineral lease and was well-established for decades before. The statutory and regulatory authority shows this, and the Court cited a number of statutes and regulations defining oil and gas waste as including produced water.

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Key Takeaways

First, the Court reiterated Texas law that, absent any agreement or conveyance to the contrary, surface owners own the groundwater beneath their property.

Second, the Court made clear in the absence of any reservation language expressly addressing produced water, the mineral lessee has the right to possession, custody, control, and disposition of the produced water.

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Interesting case. We recommend reading the entire post.  

Cactus Water Services, LLC v. COG Operating, LLC, No. 23-0676 (Texas June 27, 2025)