The Texas Supreme Court recently granted petitions for review regarding the ownership of salt caverns created by salt extraction in Myers-Woodward, LLC v. Underground Servs. Markham, LLC, ___ S.W.3d ___, 2025 WL ___ (Tex. May 16, 2025).
In this case, the lessee, Underground Services (“USM”) owned the mineral estate, and Myers owned the surface and a 1/8 royalty in all the minerals. Salt caverns had been created where USM had been extracting salt. USM used the caverns to store hydrocarbons. USM sued Myers, seeking declaratory relief regarding the royalty’s calculation and the right to use the underground salt caverns. The Corpus Christi Court of Appeals reversed the trial court judgment and held that the salt caverns belonged to the surface owner and affirmed the portion of the trial court judgment that the surface owner was due a 1/8 royalty on the market value of the salt at the wellhead.
The Supreme Court held that USM owned the salt under the tract, however the subsurface voids encased in salt and created by the production of salt belonged to Myers. USM, as the owner of the dominant mineral estate, had a qualified right to use the salt caverns, but that use was limited to uses that are reasonably necessary to recover USM’s minerals. USM could not use the caverns for storage of hydrocarbons or off-site minerals. The Supreme Court reversed regarding the royalty issue and remanded that issue back to the trial court.