AZA Law's SilverBow Verdict And The Trespass Risk Injection Well Operators Cannot Model
A McMullen County jury awarded $41.8 million against Energy Transfer affiliate ETC Field Services in February 2023, finding that hydrogen sulfide and carbon dioxide injected into an underground disposal well had trespassed on the mineral estates of SilverBow Resources and El Dorado Gas & Oil.
Author:K. N.May 31, 2026625 Shares11.5K Views
A McMullen County jury awarded $41.8 million against Energy Transfer affiliate ETC Field Services in February 2023, finding that hydrogen sulfide and carbon dioxide injected into an underground disposal well had trespassed on the mineral estates of SilverBow Resources and El Dorado Gas & Oil. AZA Law served as lead trial counselfor SilverBow. The verdict, one of the largest oil and gas trespass awards in recent Texas history, arrived during a period when Texas courts had been narrowing the defenses available to injection well operators for years.
The case applied existing doctrine to facts that many midstream companies have assumed their permits and predictive models protect them against. Those assumptions haven't held up well across multiple Texas courts.
Where the Rule of Capture Ends
Texas oil and gas law has long operated under the rule of capture: a producer may extract oil and gas that flows naturally from a neighboring tract into its own wells without liability to the neighbor. That rule developed in an era when underground migration was understood as a product of natural geological pressure, and courts treated it as a necessary accommodation for an industry where subsurface boundaries are difficult to police (Lexology).
Injection wells occupy different legal ground. The Texas Supreme Court confirmed in FPL Farming Ltd. v. Environmental Processing Systems that an Injection Well Act permit doesn't shield its holder from civil tort liability. That holding meant when a company places foreign material underground through deliberate action, the resulting migration can't be defended under the same rules that govern oil and gas flowing through natural geological pressure.
AZA Law's trial team built its case around that distinction. ETC Field Services operated a disposal well in the Wilcox formation near Tilden. Hydrogen sulfide and carbon dioxide, byproducts of natural gas processing, were injected into the well. SilverBow and El Dorado alleged that those gases migrated laterally beyond what Energy Transfer's predictive modeling had projected, that the plume crossed into their leased acreage, and that it interfered with their ability to drill (Texas Lawbook).
The jury agreed. It found that ETC Field Services interfered with both companies' rights to "explore, obtain, produce and possess minerals."
What Iskandia v. SWEPI Added
AZA Law's SilverBow verdict didn't arrive in isolation. Nine months after the McMullen County jury returned its award, the Texas Court of Appeals issued its opinion in Iskandia Operating Inc. v. SWEPI, LP, a subsurface trespass case involving produced water injection in Loving County (Energy & the Law).
Iskandia produced oil from 100 wells across 5,000 acres in the Delaware Mountain Group formation. SWEPI, Shell's production arm, operated nearby and injected more than 110,000 barrels of saltwater per day into the same formation. Iskandia alleged that the volume overwhelmed the subsurface, migrated onto its leases, and swamped its oil reserves.
The trial court had excluded Iskandia's expert witnesses and dismissed the case. The appeals court reversed. It found that reservoir simulation evidence was admissible under Rule of Evidence 702 and that genuine fact questions had been raised about whether SWEPI's injections caused physical damage to Iskandia's wells. The ruling reaffirmed that injection operators can't rely on permit compliance alone. Civil trespass liability attaches when injected material migrates and causes actual interference with a neighbor's existing subsurface use.
The Modeling Problem
Both cases exposed a common vulnerability: the gap between what an operator's subsurface model predicts and what's actually happening underground. In the SilverBow trial, AZA Law partner Todd Mensing got Energy Transfer's own experts to concede that their models did not reflect real-world conditions. "The first big crack was when we got their experts to admit that their models do not reflect the real world," Mensing told the Texas Lawbook.
In Iskandia, the appellate court devoted considerable attention to the reliability of reservoir simulation methodology. The Texas Supreme Court's six-factor test for scientific expert testimony was applied before the evidence could come through.
Operators present predictive models showing that injected material will remain within a defined zone. Plaintiffs present monitoring data, geological evidence, or production decline curves showing that it did not. Juries then have to decide whether the migration occurred and caused interference with mineral owner’s rights—for which the permit itself offers no defense.
What AZA Law's Verdict Signals for Operators
The $41.8 million result and the Iskandia reversal both point in the same direction. Midstream operators disposing of waste byproducts or produced water through injection wells carry exposure that their internal modeling may understate. Texas law doesn't require plaintiffs to show that the operator intended to violate another’s rights, only that the operator intended the injection and the injected material physically entered the plaintiff's subsurface estate and caused actual damages (Permian Basin Oil and Gas Magazine).
The SilverBow case is now on appeal before the Fourth Court of Appeals in San Antonio. Energy Transfer filed its notice of appeal in July 2023. Whatever the appellate court decides, the trial record has already been established as a proof template: geological experts who can map the migration path, petroleum engineers who can quantify interference with drilling operations, and economists who can attach a dollar figure to delayed or abandoned wells. AZA Lawpresented all three to a rural South Texas jury and walked out with a $41.8 million verdict.
For operators with active disposal wells in shared formations, the question after SilverBow is whether their predictive models will hold up when a trial team puts a geologist on the stand to show where the injected gas actually went.
K. N.
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