Office of the Attorney General News Release Archive
Thursday, January 4, 2001
STATE SUES EXXON-MOBIL FOR TENS OF MILLIONS OF DOLLARS
Alleges Oil Giant Ignored State's Oil and Gas Interest in 'Hawkins Field' for Decades
AUSTIN - Texas Attorney General John Cornyn today filed a major lawsuit in Houston to recover tens of millions of dollars in state mineral interests from oil giant Exxon-Mobil. The suit focuses on about 50 acres of state highway right-of-way land in the "Hawkins Field" in Wood County in East Texas.
Cornyn made the announcement at a news conference at his Austin office today.
"If we prevail in this case - as I believe we will - the state of Texas will finally realize the millions of dollars that should have been placed in state coffers decades ago," said Attorney General Cornyn. "We submit that Exxon-Mobil willfully ignored its responsibility to the people of Texas by draining valuable oil and gas resources under state land and failing to include the state of Texas among those receiving production revenues from the Hawkins Field."
The situation existing in the Hawkins Field was brought to the attention of the Attorney General's office by a former oil patch landman in Coleman County. The landman, who discovered the problem when he began investigating certain discrepancies in his field-wide acreage calculations, then pursued the case under current Texas law, which provides incentives to those who turn up evidence of money that rightfully belongs to the state of Texas.
The public records the Attorney General's office reviewed before filing the lawsuit strongly support the suit's allegation that Exxon-Mobil "converted" minerals of value belonging to the state for its own benefit and profit without permission from the state, a taking of state property which the Attorney General's office is charged by law to recover through legal means.
During the 1930s the state of Texas acquired mineral rights underlying many tracts of what would become highway land, including the strip in question that traverses the city of Hawkins from east to west.
While Exxon-Mobil obtained permission from the Texas Railroad Commission in the 1970s to operate the Hawkins field as a single oil and gas field unit (including that portion of U.S. Highway 80 in which the state held the mineral rights), the company allegedly misrepresented to the commission that all correlative rights in the field had been and would be protected. The lawsuit alleges that the company drilled wells too close to state land and engaged in injection practices that forced oil and gas out from under state property without permission.
The Attorney General contends in this lawsuit that Exxon-Mobil, including its predecessors, was aware of the state's mineral ownership at all times during the company's longstanding primary and secondary recovery operations in the Hawkins Field.
The suit alleges that the company "wrongfully and knowingly drained minerals from property" owned by the state and never invited the state to be a party to the unitization agreement on a prorata or yardstick basis with other mineral interest owners.
The amount of delinquent revenue sought in this lawsuit could reach well into the tens of millions of dollars, but the Attorney General's office will not be certain until it examines, during trial discovery, all company records pertaining to Hawkins Field production for the years in question.
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