⚖ Oral Arguments, with Context

The Fifth Circuit hears an oil-and-gas lease dispute between Pearl Resources and the Texas General Land Office. The agency claimed that parts of Pearl's state leases had expired because continuous drilling requirements were not met. Pearl maintained that its well preparation and infrastructure work kept its rights alive. Shortly after the state recorded the partial termination, Pearl filed for Chapter Eleven bankruptcy. The agency went to bankruptcy court to seek a ruling on the leasehold rights. Pearl counterclaimed for breach of contract, saying the termination had blocked development. After trial, the judge rejected the partial termination claim and found damages to Pearl. The judge initially barred recovery on immunity grounds, then reconsidered and held that the state had waived immunity from liability by failing to plead that defense. After offsets, the result was a judgment for more than forty million dollars against the Land Office. The damages reflected delay: increased drilling and facility costs, reduced well value, and repairs needed to restart. The agency's lawyer will argue that going to court over title was not consent to this damages judgment. She will also challenge the drilling evidence and whether the damages double-count costs and assume uncertain future wells. Pearl's lawyer will argue that the state's litigation conduct waived immunity and that the evidence supports both the leases and the award. Keep separate the lease-interpretation question, immunity defenses, and proof of loss; they are not one and the same issue.

Pearl Resources v. Buckingham (No. 25-20481) — U.S. Court of Appeals for the Fifth Circuit, argued November 4, 2026.