Slant Operating v. Octane Energy Operating

FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
5/23/2025
2025 Tex. Bus. 22

THE BUSINESS COURT OF TEXAS
EIGHTH DIVISION

SLANT OPERATING, LLC, §
§
Plaintiff, §
§
v. § Cause No. 24-BC08A-0002
§
OCTANE ENERGY OPERATING, LLC, §
§
Defendant. §

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OPINION AND ORDER
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Syllabus *

This opinion addresses whether the Plaintiff pleaded facts sufficient to establish subject-
matter jurisdiction under Texas Government Code § 25A.004(d)(1) and whether the
Defendant successfully challenged jurisdiction on the grounds of pleading insufficiency and
existence of jurisdictional facts. The Court concludes that because the Plaintiff has pleaded
sufficient jurisdictional allegations and the Defendant failed to successfully refute these
allegations, the Court must deny Defendant’s Plea to the Jurisdiction.

*
The syllabus was created by court staff and is provided for the convenience of the reader. It is not part of the
Court’s opinion, does not constitute the Court’s official description or statement, and should not be relied
upon as legal authority.
OPINION

¶1 Before the Court is Plaintiff Slant Operating, LLC’s (“Slant”) Objection to

Dismissal for Lack of Jurisdiction and Supporting Brief filed on November 25, 2024

(“Dismissal Objection”), Defendant Octane Energy Operating, LLC’s (“Octane”)

Response to Slant Operating LLC’s Objection filed on December 5, 2024 (“Objection

Response”), Octane’s Plea to the Jurisdiction filed on April 4, 2025 (“Plea”), and Slant’s

Response in Opposition to Octane’s Plea filed on May 2, 2025 (“Plea Response”). After

considering the pleadings, the jurisdictional briefs and evidence, and the oral arguments

presented by counsel, the Court concludes that Slant has sufficiently pleaded facts to

support its claims that (1) the agreement at issue is a qualified transaction, and (2) that the

Court has subject-matter jurisdiction over this action under Texas Government Code §

25A.004(d)(1). Accordingly, the Court denies Octane’s Plea.

I. RELEVANT BACKGROUND

A. Slant and Octane enter into a reciprocal waiver agreement.

¶2 Slant and Octane are entities involved in oil and gas exploration and

production in several regions of the state. Pl.’s Am. Pet. ¶ 20. As part of their business

operations, both entities operate oil and gas wells. Id. On February 22, 2023, Slant and

Octane entered into a letter agreement whereby each entity agreed to a reciprocal waiver of

any objections they had to the other’s “off-lease penetration point” permit applications

(“Letter Agreement”). Id. ¶¶ 27–29; Pl.’s Am. Pet., Ex. 1. More specifically, Slant agreed

to waive its right to protest Octane’s permit application to drill Octane’s Green Gables

OPINION AND ORDER, PAGE 2
Wells from a penetration point on Slant’s leasehold. Pl.’s Am. Pet. ¶ 29. In turn, Octane

agreed to “waive its right to protest future Slant drilling permit applications insofar . . . as

they concern Off Lease Penetration Points where Octane is the offset operator of record.”

Id. In addition to exchanging waivers, the parties also agreed to provide each other with

“daily drilling, completion, and flowback reports for each of the [w]ells” and “[d]aily

production data for each of the [w]ells.” Pl.’s Am. Pet., Ex. 1. The Letter Agreement made

no mention of monetary consideration; any obligations that one party had to pay or advance

money to the other; the monetary value each party placed on the waivers, the production

data and reports, or the agreement as a whole; or the revenue each party expected to receive

following the issuance of the drilling permits by the Texas Railroad Commission (“RRC”).

¶3 Slant alleges that following the execution of the Letter Agreement it “fully

performed its obligation” by waiving objections to Octane’s plan to drill the five Green

Gables Wells from a penetration point on Slant’s leasehold. Pl.’s Am. Pet. ¶ 30.

¶4 Less than 18 months after the Letter Agreement was signed, Slant sought to

drill its Gardendale Wells from an off-lease penetration point on Octane’s leasehold. Id.

From June to August 2024, Slant and Octane discussed a possible waiver of Octane’s right

to object to Slant’s application to drill the Gardendale Wells. Id. ¶¶ 32–34; Pl.’s Am. Pet.,

Exs. 2–3. After Slant formally requested the waiver, Octane ultimately informed Slant that

it would not provide the waiver. Pl.’s Am. Pet. ¶ 35; Pl.’s Am. Pet., Exs. 4–5. On September

16, 2024, after Slant submitted its permit application to the RRC without the waiver,

OPINION AND ORDER, PAGE 3
Octane sent an official objection to the application to Slant and the RRC. Pl.’s Am. Pet. ¶

37.

B. Slant files suit against Octane in a Tarrant County district court.

¶5 On August 12, 2024, Slant filed an original petition in the 48th Judicial

District Court in Tarrant County. In its petition, Slant alleged that Octane breached the

Letter Agreement by refusing to provide the requested Gardendale Wells waiver, causing

Slant to lose at least $11.8 million in expected revenue.

¶6 On September 23, 2024, Octane filed a motion to transfer venue and an

original answer, arguing that the case should be transferred to Midland County. On October

1, Slant filed a response in opposition to Octane’s motion to transfer venue. That same day,

Slant nonsuited its claim against Octane.

C. Slant commences suit in the Business Court.

¶7 On October 1, 2024, Slant filed its Original Petition in the Business Court of

Texas (“Business Court” or “Court”), bringing a breach-of-contract claim. In the petition,

Slant generally alleged that this Court has subject-matter jurisdiction over the action under

Texas Government Code § 25A.004(d)(1) because it arose out of a qualified transaction and

the amount in controversy is over $10 million.

¶8 On November 15, 2024, after reviewing the Original Petition, the Court

ordered jurisdictional briefing explaining (1) how the agreement at issue is a qualified

transaction under Texas Government Code § 25A.004(d)(1) sufficient to invoke the Court’s

OPINION AND ORDER, PAGE 4
authority to hear the case and (2) whether the case should be dismissed or transferred under

§ 25A.006(b) in the event the Court lacks authority.

¶9 On November 25, 2024, Slant filed its Dismissal Objection, arguing that

Octane’s promise to waive objections to all future off-lease drillings was a qualified

transaction worth over $10 million. Slant also requested a dismissal without prejudice in

the event the Court finds it lacks jurisdiction. On December 5, Octane filed its Objection

Response. Octane argued that this case should be dismissed for lack of jurisdiction because

the Letter Agreement lacks material terms that would show that it is a qualified transaction.

On January 7, 2025, the Court held a hearing where the parties presented their arguments

for and against dismissal.

¶ 10 On January 17, 2025, after making a preliminary determination that the

Original Petition failed to plead facts sufficient to establish the Court’s jurisdiction, the

Court issued an order allowing Slant the opportunity to amend its petition and for the

parties to conduct jurisdictional discovery. On January 31, Slant filed its Amended

Petition. On April 4, Octane filed its Plea, formally asking the Court to dismiss the case for

lack of jurisdiction. Slant filed its Plea Response on May 2. The Court heard arguments

pertaining to the Plea on May 7.

II. LEGAL STANDARDS

¶ 11 “[S]ubject-matter jurisdiction is essential to a court’s power to decide a

case.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex. 2000). Whether

subject-matter jurisdiction exists is a question of law. City of Houston v. Rhule, 417 S.W.3d

OPINION AND ORDER, PAGE 5
440, 442 (Tex. 2013) (per curiam). To establish jurisdiction, the plaintiff must plead facts

sufficient to “affirmatively demonstrate the court’s jurisdiction to hear the cause.” Tex.

Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993); see also TEX. R. CIV.

P. 354(a) (“For an action originally filed in the business court, an original pleading that sets

forth a claim for relief . . . must . . . plead facts to establish the business court’s authority to

hear the action.”).

¶ 12 When a plea to the jurisdiction attacks the pleadings, courts typically

construe the pleadings liberally in favor of the plaintiff and consider the plaintiff’s intent.

Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). “If the

pleadings do not contain sufficient facts to affirmatively demonstrate the trial court[’]s

jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue

is one of pleading sufficiency and the plaintiff[] should be afforded the opportunity to

amend.” Id. at 226–27. However, “[i]f the pleadings affirmatively negate . . . jurisdiction,”

the case may be dismissed without providing an opportunity to amend. Id. at 227.

¶ 13 On the other hand, when a plea to the jurisdiction attacks the existence of

jurisdictional facts, courts are required to consider relevant evidence “when necessary to

resolve the jurisdictional issues raised,” even if the evidence implicates the merits. Id.;

Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 770 (Tex. 2018). When a

defendant attacks the existence of jurisdictional facts in a plea to the jurisdiction, the Texas

Supreme Court has described the process of analyzing and resolving the plea as one that

“generally mirrors that of a summary judgment.” City of Austin v. Powell, 704 S.W.3d 437,

OPINION AND ORDER, PAGE 6
446 (Tex. 2024) (citing Miranda, 133 S.W.3d at 226). If the plea challenges a plaintiff’s

factual allegations with supporting evidence that refutes jurisdiction, the burden then shifts

to the plaintiff to raise a genuine issue of material fact to defeat the jurisdictional challenge.

Miranda, 133 S.W.3d at 221; C Ten 31 LLC ex rel. Summer Moon Holdings LLC v. Tarbox,

2025 Tex. Bus. 1, ¶ 44, 708 S.W.3d 223, 241 (3rd Div.). The plea to the jurisdiction may

also take on the character of a no-evidence motion for summary judgment by asserting that

the plaintiff has produced no evidence to establish jurisdiction. See Powell, 704 S.W.3d at

447. In such a case, the plaintiff must produce enough evidence to raise a genuine issue of

material fact to survive the plea. See id. at 448; Miranda, 133 S.W.3d at 227–28; Town of

Shady Shores v. Swanson, 590 S.W.3d 544, 551–52 (Tex. 2019) (providing that nonmovant

raises fact issue by producing “more than a scintilla of evidence”). Or, as the Supreme

Court stated in Powell, the plea “may be like a hybrid motion for summary judgment where

both parties attach evidence,” in which case the “ʻultimate issue’ in that instance is

likewise ʻwhether the nonmovant raised a fact issue to preclude summary judgment.’”

Powell, 704 S.W.3d at 448 (citing Fossil Grp., Inc. v. Harris, 691 S.W.3d 874, 882 (Tex.

2024)). “If the evidence raises a fact question as to the court’s jurisdiction, then the trial

court may not grant the plea.” Id. (citing Univ. of Tex. at Austin v. Hayes, 327 S.W.3d 113,

116 (Tex. 2010)). Instead, the fact issue must be resolved by the fact finder. See Miranda,

133 S.W.3d at 227–28. If a fact issue is not raised, or if the evidence is undisputed, the

court can rule on the plea as a matter of law. Id. at 228.

OPINION AND ORDER, PAGE 7
¶ 14 If the evidence implicates the merits of the case, the court must take all

evidence favorable to the plaintiff as true and “indulge every reasonable inference and

resolve any doubts in the [plaintiff’s] favor.” See Miranda, 133 S.W.3d at 228; Christ v.

Tex. Dep’t of Transp., 664 S.W.3d 82, 89 (Tex. 2023).

III. ANALYSIS

A. At its core, whether the Court has subject-matter jurisdiction is an issue of
statutory construction.

¶ 15 To determine whether the Business Court has jurisdiction over this case, the

Court must construe Texas Government Code §§ 25A.001(14) and 25A.004(d)(1).

Statutory construction is a question of law. Cadena Comercial USA Corp. v. Tex. Alcoholic

Beverage Comm’n, 518 S.W.3d 318, 325 (Tex. 2017). The goal of statutory construction is

to ascertain and effectuate legislative intent. Id. Legislative intent is expressed in the plain

and common meaning of the statutory text “unless a different meaning is supplied, is

apparent from the context, or the plain meaning of the words leads to absurd or nonsensical

results.” Id. In construing a statute’s plain meaning, the words and phrases are considered

in the context of the entire statute and construed according to the rules of grammar and

usage. Id. at 325–26. Courts presume that the legislature chose the statutory text “with

care, including each word chosen for a purpose, while purposefully omitting words not

chosen.” Id. Definitions prescribed by the legislature are used when construing a statute.

Prairie View A&M Univ. v. Chatha, 381 S.W.3d 500, 511 (Tex. 2012).

¶ 16 Section 25A.004 of the Texas Government Code sets forth the types of cases

the Business Court has the authority to hear. Pursuant to the statute, the Business Court

OPINION AND ORDER, PAGE 8
has jurisdiction over cases with an amount in controversy exceeding $10 million and arising

out of a qualified transaction. TEX. GOV’T CODE § 25A.004(d)(1). The legislature defined

“qualified transaction”:

“Qualified transaction” means a transaction, other than a transaction
involving a loan or an advance of money or credit by a bank, credit union, or
savings and loan institution, under which a party:

(A) pays or receives, or is obligated to pay or is entitled to
receive, consideration with an aggregate value of at least $10
million; or

(B) lends, advances, borrows, receives, is obligated to lend or
advance, or is entitled to borrow or receive money or credit with
an aggregate value of at least $10 million.

Id. § 25A.001(14).

¶ 17 As an initial matter, § 25A.004(d)(1) includes two requirements for

jurisdiction: (1) the amount in controversy is over $10 million; and (2) the action arises out

of qualified transaction, which is supported by consideration worth at least $10 million. Id.

§ 25A.004(d)(1). The amount in controversy is not the same as consideration. See

Goosehead Ins. Agency v. Williams Ins. & Consulting, 533 F. Supp. 3d 367, 376 n.2 (N.D.

Tex. 2020) 1; Amount in Controversy, BLACK’S LAW DICTIONARY (12th ed. 2024) (“The

damages claimed or relief demanded by the injured party in a lawsuit.”); Consideration,

BLACK’S LAW DICTIONARY (12th ed. 2024) (“Something (such as an act, a forbearance, or a

1
The Goosehead case analyzes the meaning of “qualified transaction” in the Texas Business and Commerce
Code, which is defined in substantially similar terms as that in Texas Government Code § 25A.004(d)(1). The
court concluded that the legislature’s use of “obligation” in the Business and Commerce Code definition
“refer[s] to the contractual consideration between all parties in the transaction, as opposed to . . . the amount
in controversy at the time of litigation.” Goosehead, 533 F. Supp. 3d at 376 n.2.

OPINION AND ORDER, PAGE 9
return promise) bargained for and received by a promisor from a promisee; that which

motivates a person to do something, esp. to engage in a legal act.”). Consequently, not every

commercial dispute with an amount in controversy of over $10 million will arise under a

qualified transaction and confer jurisdiction on the Business Court.

¶ 18 As Slant correctly stated in its Dismissal Objection, “[t]he principal question

is whether the statutory requirement of consideration with an aggregate value of at least

$10 million has been satisfied.” Pl.’s Dismissal Obj. at 10 (internal quotation marks

omitted). It is not whether the $10 million amount-in-controversy requirement has been

met. The parties disagree as to whether the Letter Agreement constitutes a qualified

transaction supported by consideration worth at least $10 million and whether the amount

in controversy is indeed more than $10 million. However, a resolution of those disputes is

best left for another day. Under Texas’s liberal pleading standard, for purposes of

determining jurisdiction, the Court finds that Slant’s Amended Petition contains sufficient

facts to satisfy the $10-million amount-in-controversy requirement. See Pl.’s Am. Pet. ¶¶

38–41. Further, for the reasons below, the Court also finds that Slant has pleaded facts

sufficient to support its claim that the parties were entitled to receive at least $10 million

in aggregate consideration under the Letter Agreement.

B. Slant’s pleadings and factual allegations overcome Octane’s jurisdictional
challenges.

In its Plea, Octane challenges both the pleadings and the existence of jurisdictional

facts as bases for the Court’s lack of jurisdiction over the case. The Court will examine both

challenges in turn.

OPINION AND ORDER, PAGE 10
1. Challenge to Pleadings

¶ 19 In its Plea, Octane argues that Slant has not pleaded sufficient facts alleging

that Slant was entitled to receive over $10 million in consideration at the time of

contracting. De f.’s Plea at 4. Octane distinguishes what Slant “expected to receive” from

what it was “entitled to receive.” Id. at 5. Additionally, Octane argues that Slant did not

affirmatively show how the parties valued Slant’s waiver associated with the Green Gables

drilling, which Slant also uses to argue that the Letter Agreement is a qualified transaction.

Id. In accordance with Texas’s liberal pleading standard, the Court finds that Slant has

pleaded enough facts to support its claim that the Letter Agreement is a qualified

transaction under Texas Government Code Chapter 25A.

¶ 20 In its Amended Petition, Slant alleges that the value of the waivers (i.e., the

consideration) was “the value of the additional oil and gas that both Slant and Octane

expected to receive as a result of the increased productive lateral length that drilling at an

off-lease penetration point provided.” Pl.’s Am. Pet. ¶ 13. Slant also alleges that, at the

time of contracting, “Slant knew that the receipt of Octane’s waiver would increase the

productive lateral length of Slant’s future wells by an estimated 515 feet per well,” which

would allow for over 33,000 additional feet of productive lateral length over an estimated

65 wells. Id. ¶ 14. Slant asserts that it expected to produce at least an additional 2.6 million

barrels of oil, 2.9 billion cubic feet of natural gas, and 305,000 barrels of natural gas liquids

based on Octane’s promise to waive objections. Id. ¶ 15. Slant, therefore, valued Octane’s

promised waivers at about $130 million at the time of contracting. Id.

OPINION AND ORDER, PAGE 11
¶ 21 As for the value of the Gardendale Wells waiver specifically, the drilling of

which is the crux of Slant’s alleged damage amount, Slant further alleges that it expected

to produce an additional 41,200 barrels of oil, 44,800,000 cubic feet of natural gas, and

4,700 barrels of natural gas liquids at the time of contracting, which was valued at over

$11.5 million. Id. ¶ 16; see id. ¶¶ 38, 41. Regarding the value of Slant’s waiver for the

Green Gables drilling, Slant alleged that the waiver “similarly allowed Octane to increase

its productive lateral length for the wells,” and Octane’s consideration at the time of

contracting was also over $10 million. Id. ¶ 18.

¶ 22 Based on the foregoing factual allegations, Slant has satisfied the pleading

standard set forth in Texas Rule of Civil Procedure 354(a) and Miranda and has

successfully pleaded the Court’s authority to hear the case under Texas Government Code

§ 25A.004(d)(1).

¶ 23 In arguing that Slant’s jurisdictional allegations provided no indication of

what consideration it was entitled to receive at execution, Octane cites an Austin Court of

Appeals opinion. Def.’s Plea at 5 n.3 (citing Hughes v. Pearcy, No. 03-10-00319-CV, 2014

WL 7014353, at *3 (Tex. App.—Austin Dec. 8, 2014, pet. denied) (mem. op.)). In Hughes,

Pearcy contracted with Hughes to sell his business, PPI, to Hughes. Hughes, 2014 WL

7014353, at *1. Pearcy also agreed to grant PPI the exclusive rights to certain microbial

formulations for five years in exchange for royalties. Id. Per the licensing agreement, the

royalty payments were 14 percent of the business’s net sales up to $189,000 per year. Id.

at *1, 3. Once the five-year period was over, PPI had the option to purchase the formulations

OPINION AND ORDER, PAGE 12
for $100,000; PPI could also accelerate this purchase option if the maximum unpaid

royalties remaining under the agreement and the formulation purchase price were paid. Id.

at *1. Pearcy alleged that Hughes accelerated PPI’s purchase option, but PPI refused to pay

the remaining unpaid royalties and the formulation purchase price despite Pearcy providing

Hughes with the formulations. Id.

¶ 24 During the litigation, there was a dispute regarding venue. Id. at *2. To

resolve the venue question, the court analyzed whether the mandatory venue provision in

Texas Civil Practice and Remedies Code § 15.020 for major transactions applied. Id. A

“major transaction” is “[a] transaction evidenced by a written agreement under which a

person pays or receives, or is obligated to pay or entitled to receive, consideration with an

aggregate stated value equal to or greater than $1 million.” TEX. CIV. PRAC. & REM. CODE §

15.020(a) (emphasis added). The transaction underlying the suit was made up of four

separate contracts, including the licensing agreement. Hughes, 2014 WL 7014353, at *3.

After determining that the other three contracts expressly entitled Pearcy to $500,000, the

court ultimately determined that the transaction was not a major transaction because of the

licensing agreement. See id. Because the royalty payments under the licensing agreement

were “contingent upon PPI’s future sales and PPI electing to purchase the formulations at

a later date,” the court could not conclude that the agreement obligated Pearcy to the

remaining $500,000 needed to make the transaction a major transaction. Id. The court

stated, “On the face of this agreement, PPI may never have been obligated to pay any sum

as consideration because all payments are conditioned on future, uncertain net sales and

OPINION AND ORDER, PAGE 13
the Appellants electing to exercise their option to purchase Pearcy’s formulations at a future

date.” Id.

¶ 25 Setting aside that Hughes focuses on major transactions and does not address

pleadings challenges under pleas to the jurisdiction, even if Hughes applied to deem what

Slant was entitled to receive under the Letter Agreement too uncertain, Slant also alleged

that its promise to provide a waiver for Octane’s Green Gables Wells (what Octane was

entitled to receive) was worth at least $10 million. See Pl.’s Am. Pet. ¶ 18. Therefore, the

value of consideration for that promise alone would have made the Letter Agreement a

qualified transaction. Additionally, the Court must consider Slant’s intent and construe its

allegations liberally in its favor. See Miranda, 133 S.W.3d at 226. Doing so makes Slant’s

allegations sufficient to overcome this jurisdictional challenge.

¶ 26 Further, the Hughes court cited In re Texas Association of School Boards, 169

S.W.3d 653 (Tex. 2005), for support of its conclusion. Hughes, 2014 WL 7014353, at *3.

But, in that case, the Supreme Court of Texas found that an insurance agreement was not a

major transaction because the consideration’s aggregate stated value was the insurance

premiums paid, not the insurance limits. See In re Tex. Ass’n of Sch. Bds., 169 S.W.3d at

658. This was because an insurance agreement is an aleatory contact—“a contract in

which a promise is conditioned on the happening of a fortuitous event, an event of

chance”—and the consideration for such an agreement is the premiums that covers a

party’s assumption of the risk that a fortuitous event will occur. Id. at 658–59. The Letter

Agreement cannot be categorized as an aleatory contract, as the obligations of the parties

OPINION AND ORDER, PAGE 14
were not conditioned on events of chance. And the parties did not assume the risk of certain

events occurring. Instead, each party assumed obligations to provide waivers upon request

and production data once the wells were drilled. See Spin Dr. Golf, Inc. v. Paymentech, L.P.,

296 S.W.3d 354, 359 (Tex. App.—Dallas 2009, pet. denied) (contrasting assumption of

risk from assumption of obligation under contract). In short, the consideration each party

was entitled to under the Letter Agreement was not contingent on future events of chance.

While future fortuitous events could impact the value ultimately derived from that

consideration (i.e., revenue), the relevant inquiry here is the value of the consideration at

the time of contracting. See Atlas IDF, LP v. NexPoint Real Est. Partners, LLC, 2025 Tex.

Bus. 16, ¶ 33, --- S.W.3d ----, 2025 WL 1381574, at *4 (1st Div.).

¶ 27 Accordingly, the Court deems Octane’s pleadings challenge unsuccessful.

2. Challenge to Jurisdictional Facts

a. Octane failed to successfully refute the existence of jurisdictional facts.

¶ 28 With its Plea, Octane produced several exhibits in an attempt to refute Slant’s

jurisdictional allegations that the Letter Agreement entitled Slant and Octane to receive at

least $10 million in consideration at the time of contracting. Octane also argued that Slant

failed to produce evidence supporting these allegations. In accordance with Miranda and

Powell, the Court concludes that (1) the evidence presented by Octane fails to refute Slant’s

assertion that the Letter Agreement is a qualified transaction for purposes of conferring

jurisdiction on the Court and (2) Slant has produced evidence sufficient to survive Octane’s

no-evidence argument.

OPINION AND ORDER, PAGE 15
i. The Letter Agreement

¶ 29 Octane argues that the Letter Agreement itself refutes jurisdiction because

(1) it is silent about the value of Octane’s waivers for future drilling permits, (2) “Slant

cannot alter the Letter Agreement’s stated consideration with allegations,” and (3) Slant

was not entitled to receive consideration over $10 million at the time of contracting because

Octane’s promise to waive objections to future permit applications is an unenforceable

agreement to agree with no value. Def.’s Plea at 6–7.

¶ 30 First, while including a dollar amount would have been helpful to

determining the value of consideration, a recital of consideration is not required to be

included in a written contract. See Gooch v. Am. Sling Co., 902 S.W.2d 181, 185 (Tex.

App.—Fort Worth 1995, no writ) (citing Wright v. Robert & St. John Motor Co., 58 S.W.2d

67, 69 (Tex. [Comm’n Op.] 1933) (explaining that a written contract presumes

consideration and that the burden is on the defendant to prove want of consideration). Also,

as argued by Slant, there is no language in Texas Government Code Chapter 25A that

requires that the value of consideration be stated in the contract. See Def.’s Plea Resp. at 4.

Compare TEX. GOV’T CODE § 25A.001(14) (definition of “qualified transaction” providing

for “aggregate value”), with TEX. CIV. PRAC. & REM. CODE § 15.020(a) (definition of “major

transaction” providing for “aggregate stated value”). Therefore, the fact that the Letter

Agreement does not state the monetary value of Octane’s future waivers does not mean the

contract itself refutes Slant’s allegation that the waivers were worth at least $10 million.

OPINION AND ORDER, PAGE 16
¶ 31 Second, the Court does not believe that Slant’s jurisdictional allegations alter

the Letter Agreement’s “stated consideration.” Consideration is an exchange of promises

bargained for by the parties to a contract. Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d

492, 496 (Tex. 1991). Consideration “consists of either a benefit to the promisor or a

detriment to the promisee.” Id. The aggregate value of the consideration used to support a

qualified transaction is determined at the time of contracting. See Atlas IDF, 2025 Tex.

Bus. 16, ¶ 33, 2025 WL 1381574, at *4 (citing Goosehead, 533 F. Supp. 3d at 376, 380).

¶ 32 The consideration that each party was entitled to receive is apparent from the

Letter Agreement. The agreement consists of two provisions, one pertaining to the drilling

of Octane’s Green Gables Wells and the other pertaining to the future drillings of Slant

wells:

OPINION AND ORDER, PAGE 17
De f.’s Plea, Ex. C. Slant alleges that its promise to provide a waiver for the Green Gables

Wells and Octane’s promise to provide future waivers for Slant’s wells entitled each party

to consideration with an aggregate value of at least $10 million at the time of contracting.

Slant’s attempt to place a dollar value on those promises does not alter the consideration

set forth in the Letter Agreement.

¶ 33 Lastly, even if Octane’s promise to provide future waivers is an unenforceable

agreement to agree with no value, this does not refute the allegation Slant’s promise to

provide a waiver for the Green Gables Wells to Octane was worth at least $10 million at the

time of contracting, which provides an independent basis for concluding that the Letter

OPINION AND ORDER, PAGE 18
Agreement is a qualified transaction. Therefore, the Court does not believe that considering

the enforceability of Octane’s future waiver promise is necessary for the jurisdictional

analysis.

¶ 34 In addressing Slant’s allegation that the Green Gables waiver provision

provided an independent basis for jurisdiction, Octane argued at the May 7, 2025 hearing

that the Letter Agreement is divisible, making each provision separate contracts.

Therefore, Octane asserted that any value Slant placed on the future waiver provision

cannot be placed on the Green Gables waiver provision to establish jurisdiction.

Additionally, according to Octane, interpreting the Letter Agreement as divisible will

further show a lack of jurisdiction, as the future waiver provision is an unenforceable

agreement to agree and the action does not arise out of the Green Gables waiver provision.

¶ 35 In support of these arguments, Octane referenced Stanley Works v. Wichita

Falls Independent School District, 366 S.W.3d 816 (Tex. App.—El Paso 2012, pet. denied).

In this case, Stanley Works and Wichita County, Texas entered into a tax abatement

agreement, whereby Stanley Works would make personal property additions and

improvements to its Wichita Falls, Texas tool manufacturing facility. Stanley Works, 366

S.W.3d at 820. The work was to occur in three separate phases—Phase I, Phase II, and

Phase III—and was detailed in the agreement. Id. at 820–21. Under the agreement, the

county would give Stanley Works declining ad valorem tax abatements on these additions

and improvements. Id. at 821. If Stanley Works failed to complete the work for each phase,

the agreement provided that the company would have to repay all property tax revenue the

OPINION AND ORDER, PAGE 19
county lost related to the additions and improvements. Id. Wichita Falls Independent

School District (“WFISD”) was also a party to the agreement. Id. at 820. WFISD sued

Stanley Works, alleging that the company did not make all the required additions and

improvements to the Wichita Falls facility and failed to repay the county’s lost property tax

revenue. Id. at 822. The trial court ruled in WFISD’s favor, and Stanley Works appealed.

Id.

¶ 36 On appeal, Stanley Works argued that the agreement was a divisible contract

separated into three parts: Phases I, II, and III. Id. at 826, 827. The appellate court relied

on principles of contractual construction to determine whether the agreement was divisible.

Id. at 826. “In construing a contract, a court must ascertain the true intentions of the

parties as expressed in the writing itself,” which requires examination of the whole contract

to harmonize and effectuate every provision and avoid rendering any provision meaningless.

Id. Whether a contract is divisible involves consideration of the parties’ intent and conduct

and the agreement’s subject matter. Id. at 827. “If there is a single assent to a whole

transaction involving several things, a contract is entire, but if there is a separate assent to

each of the several things involved, it is divisible.” Id. Further, “[a] contract is divisible

when the performance by one party consists of several distinct and separate items and the

price paid by the other party is apportioned to each item.” Id.

¶ 37 The court concluded that the tax abatement agreement’s express language

showed the parties’ intent to create a divisible contract. Id. at 828. Section 4.4 of the

agreement provided the following:

OPINION AND ORDER, PAGE 20
If [Stanley] fails to make the personal property additions and improvements
to the Premises which are described in this Agreement as Phase I, II, or III,
respectively, [Stanley] shall repay all property tax revenue lost by the County
as a result of this Agreement insofar as such lost tax revenue relates to the
additions and improvements described in the particular Phase, subject to any
and all lawful offsets, settlements, deductions or credits to which [Stanley]
may otherwise be entitled; provided, however, the failure to make the
additions and improvements in any particular Phase shall not adversely affect
the tax abatement provided for herein with respect to any other Phase.

Id. at 827 (alteration in original). Because the language “plainly contemplate[d]” that

specific additions and improvements were assigned to specific phases and the failure to

complete one phase would not affect the tax abatement provided for another, the court

concluded that the parties intended the contract be divisible. Id. at 827–28. Any other

interpretation of Section 4.4 would render it meaningless. Id. at 828.

¶ 38 The case at bar is distinguishable from Stanley Works. The Letter Agreement

does not contain any express language similar to Section 4.4. There is no language that

expressly divides performance by each party into separate phases or parts. And there is no

language that expressly states that the failure of one party to perform under one provision

will not limit that party’s right to receive the waivers or data it contracted for in the other

provision. Additionally, the Letter Agreement contains a single assent (i.e., the parties’

signatures at the end of the agreement), evidencing a non-divisible contract. See id. at 826.

Therefore, the Court is not persuaded by Octane’s divisibility argument.

ii. Contract Negotiations

¶ 39 Octane argues that the documents evidencing the parties’ negotiations show

there was no mention of the future waiver provision, as “Slant was interested in a waiver-

OPINION AND ORDER, PAGE 21
for-data exchange—not the waiver-for-waiver deal, that Slant now alleges as a basis for this

Court’s jurisdiction.” Def.’s Plea at 9.

¶ 40 These documents consist of an email thread between Octane’s Jared Blong

and Slant’s Sean Gill from February 2023 where the parties negotiated the Letter

Agreement. Def.’s Plea, Ex. B. The emails indicate that Blong sent a draft of the Green

Gables Wells waiver the parties discussed via text to Gill on February 6, 2023. On February

15, Gill responded that Slant would be “open to granting the waiver in exchange for drilling,

completion, flowback and production data for the wells being drilled.” On February 20,

Blong indicated that Octane revised the waiver and asked that it be turned around quickly

for submission to the RRC. On February 22, Gill indicated that he sent Blong the Letter

Agreement “to document the exchange further.” On February 23, Blong sent Gill the

executed Letter Agreement and asked for Gill to sign it as well. The same day, Gill sent the

final Letter Agreement signed by both parties and the signed Green Gables waiver.

¶ 41 This email thread does not refute Slant’s jurisdictional allegations. The

Court acknowledges that there is no mention of an agreement that Octane would provide

waivers for future Slant drilling applications anywhere in the email thread. However, the

absence of discussion regarding that provision in the thread does not mean that Slant was

not interested in a “waiver-for-waiver deal”; in fact, Blong sending Gill the Letter

Agreement that included the future waiver provision suggests that Slant was interested in

such an agreement during negotiations. And nothing in the email thread refutes Slant’s

allegation that its Green Gables Wells waiver and Octane’s future waivers entitled the

OPINION AND ORDER, PAGE 22
parties to consideration with an aggregate value of at least $10 million at the time of

contracting. As such, this exhibit also fails to refute jurisdiction.

iii. Slant’s Post Hoc Valuation of the Green Gables Wells Waiver

¶ 42 Octane also produced an email thread from January 2025 in which Slant

personnel attempted to calculate the value of Slant’s agreement to provide a waiver for

Octane’s Green Gable Wells. De f.’s Plea, Ex. F.

¶ 43 While Slant was not in the position to accurately calculate this figure (as it

pertained to Octane’s wells), Slant’s attempt to do so does not refute its allegation that was

Octane was entitled to receive at least $10 million in aggregate consideration under the

Letter Agreement. An attempt to create a detailed calculation of the value of consideration

after the fact does not refute that that value met the jurisdictional threshold. As Slant

argues, while the Goosehead court found that a party’s projections created before entering

a franchise agreement satisfied the $1 million aggregate-consideration threshold, the court

did not adopt a rule stating that such evidence must have existed at the time of contracting.

See Goosehead, 533 F. Supp. 3d 367 at 380; Pl.’s Plea Resp. at 9. And this Court is unaware

of any case that has established such a rule. Therefore, the Court refuses to create such a

rule at this time.

iv. Slant’s Jurisdictional Discovery Responses

¶ 44 In the section of Octane’s argument titled “Slant’s discovery responses do

not support and undermine its jurisdictional allegations,” Octane argues that Slant’s

discovery responses refute jurisdiction because (1) Slant’s interrogatory responses stating

OPINION AND ORDER, PAGE 23
that it valued Octane’s future waivers at about $130 million at the time of contracting were

unsupported and (2) Slant produced no evidence, such as projections created during

contract negotiation, of its valuation of the future Octane waivers. Def.’s Plea at 8; see

Def.’s Plea, Ex. D.

¶ 45 Courts review the substance of pleadings and motions to determine the proper

characterization of them. Powell, 704 S.W.3d at 448. In substance, Octane’s argument

that Slant has not produced evidence supporting its jurisdictional allegations mirrors a no-

evidence motion for summary judgment. See Def.’s Plea at 8–9 (“Slant, however, has

produced no evidence that [the allegations set forth in its interrogatory responses] are

actually true; that is, Slant has no ʻprojections’ it created during negotiations about how it

valued Octane’s waiver.”). Therefore, the Court’s analysis of this argument will be akin to

the no-evidence summary judgment standard. See Powell, 704 S.W.3d at 447. Once Octane

put forth its no-evidence argument, Slant was required to present more than a scintilla of

evidence to create a genuine issue of material fact regarding jurisdiction and overcome the

challenge. See Swanson, 590 S.W.3d at 551. Slant did just that by filing supporting

evidence, including uncontroverted expert declarations. Pl.’s Plea Resp., Exs. 1–2; see Pl.’s

Plea Resp. at 14–15. Slant has therefore overcome Octane’s no-evidence challenge to

OPINION AND ORDER, PAGE 24
jurisdiction, making denial of the Plea on that basis appropriate. 2 See Swanson, 590 S.W.3d

at 551–52. 3

b. Because Octane did not successfully refute the existence of jurisdictional
facts, the Court must deny the Plea.

¶ 46 Because Octane has failed to produce evidence refuting Slant’s jurisdictional

allegation that both parties were entitled to receive consideration with an aggregate value

of at least $10 million at the time of contracting, the Court must deny Octane’s Plea.

Miranda, 133 S.W.3d at 221. Furthermore, because Slant was able to overcome Octane’s

no-evidence argument by producing more than a scintilla of evidence supporting its

jurisdictional allegations, denial of the Plea at this stage is appropriate. See Swanson, 590

S.W.3d at 551–52.

IV. CONCLUSION

¶ 47 The parties dispute Slant’s alleged damages and whether the Letter

Agreement entitles either party to receive consideration with an aggregate value of at least

2
Even if Octane’s argument in this subsection is analyzed under the traditional summary judgment standard,
the Court finds that Octane has not satisfied its burden of presenting evidence refuting jurisdiction. See
Miranda, 133 S.W.3d at 221; C Ten, 2025 Tex. Bus. 1, ¶ 44, 708 S.W.3d at 241. As the Court has already
concluded, Slant sufficiently alleged that the parties were each entitled to receive consideration with an
aggregate value of at least $10 million at the time of contracting. Slant’s “vague” discovery responses and
failure to produce evidence of projections created at the time of contracting is not evidence that refutes
jurisdiction.
3
In arguing that Slant should have produced evidence of valuation, Octane also produced an email thread
showing Slant’s Gardendale Wells waiver request to Octane. Def.’s Plea, Ex. G. Octane appears to argue that
because Slant did not request the waiver until over a year after the Letter Agreement was executed, that is
evidence that Slant cannot prove the value it placed on the waiver at execution. Under either summary
judgment-like standard, Octane’s argument is defeated. Under a no-evidence standard, Slant’s expert
declarations provide more than a scintilla of evidence supporting jurisdiction. Under a traditional standard,
producing documents showing that Slant did not request the waiver until July 2024 does not refute the
allegation that Slant was entitled to receive at least $10 million in consideration at the time of contracting.

OPINION AND ORDER, PAGE 25
$10 million. While the Court makes no final determination regarding whether the amount

in controversy is over $10 million or whether the Letter Agreement is indeed a qualified

transaction, the Court concludes that (1) Slant has sufficiently pleaded facts to establish

these jurisdictional requirements under Texas Government Code § 25A.004 and (2) Octane

has failed to successfully challenge Slant’s pleadings and the existence of jurisdictional

facts.

¶ 48 Consistent with this opinion, the Court DENIES Defendant’s Plea to the

Jurisdiction.

IT IS SO ORDERED.

JERRY D. BULLARD
Judge of the Texas Business Court,
Eighth Division
SIGNED ON: May 23, 2025

OPINION AND ORDER, PAGE 26