Texas SC agrees to rehear long-running Exxon sabotage case

AUSTIN, Texas (Legal Newsline)- The Texas Supreme Court has agreed to rehear a case in the long-running case over whether Exxon Mobil Corp. sabotaged abandoned wells.

In March, the high court tossed out an $18.6 million verdict against Exxon, the largest U.S. oil company, for improperly plugging oil wells in Refugio County.

At the time, a unanimous court found that landowners waited too long to sue after discovering junk and plugs in wells Exxon abandoned in the early 1990s.

For its part, Irving, Texas-based Exxon has denied any wrongdoing. The company has said the oil wells were plugged to protect groundwater from contamination.

The plaintiffs won at trial in 1999. The Texas Supreme Court reversed the ruling. The Texas land commissioner and state comptroller urged the high court to rehear the case.

The state Supreme Court ruled that the O'Connor family, which owned the oil fields, and Emerald Oil & Gas Co., which took over some former Exxon Mobil leases in 1993, had waited too long to sue.

The O'Connors' relationship with Exxon soured after the rejected the company's request for a reduction in the 50 percent royalty rate in the late 1980s. In 1989, Exxon told the family it intended on plugging the wells, saying they were no longer profitable.

Refugio, Texas-based Emerald Oil years later agreed to lease one-third of the oil fields formerly operated by Exxon. But when Emerald drilled into the plugged wells to begin production, they found cement and other debris in addition to explosives.

Exxon drilled 121 wells and produced more than 15 million barrels of oil and 65 billion cubic feet of natural gas from the O'Connor lands, court papers indicate.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.