Marathon Oil v. Mercuria Energy America

2025 Tex. Bus. 39

The Business Court of Texas,
11th Division
MARATHON OIL CO., §
Plaintiff, §
§
v. § Cause No. 25-BC11A-0013
MERCURIA ENERGY AMERICA, §
LLC, §
§
Defendant.
§
════════════════════════════════════════════
Syllabus*
════════════════════════════════════════════

In this force-majeure dispute arising out of Winter Storm Uri, parties to a
contract for the sale of natural gas dispute whether the seller should have
(i) purchased gas on the spot market to cover any production shortfall or (ii) bought
back its delivery obligation. The Court holds that the parties’ contract did not
obligate the seller to take either action as a prerequisite or alternative to declaring
force majeure or as a contractually required “reasonable effort.”

*
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.
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
10/14/2025
2025 Tex. Bus. 39

The Business Court of Texas,
11th Division
MARATHON OIL CO., §
Plaintiff, §
§
v.
§ Cause No. 25-BC11A-0013
MERCURIA ENERGY AMERICA, §
LLC,
§
Defendant. §
════════════════════════════════════════════
OPINION
════════════════════════════════════════════

¶1 The parties dispute whether the force-majeure clause in their contract

excused Marathon’s failure to deliver natural gas to Mercuria in February 2021, in

the wake of Winter Storm Uri. Among other things, Mercuria argues that Marathon

should have (a) purchased gas on the spot market to meet its delivery obligations or

(b) bought back its delivery obligation. The Court holds that the contract did not

require Marathon to do either. First, the parties added language to the force-majeure

clause—“the party claiming excuse shall have no obligation to seek alternative Gas

supplies in order to satisfy any obligation hereunder”—that relieved Marathon of
any obligation to seek spot-market gas. Second, the clause’s “reasonable efforts”

duty does not encompass buybacks, which would render the clause ineffective.

Background

¶2 Marathon and Mercuria entered into a base contract for the sale and

purchase of natural gas (the Base Contract),1 which is based on a form published by

the North American Energy Standards Board (NAESB).2 In January 2021, they

agreed that Marathon would sell Mercuria natural gas each day in February 2021

at the EOIT West Pool, under the Base Contract. The parties exchanged transaction

confirmations reflecting this agreement, which integrate with the Base Contract to

form the relevant agreement (the Contract). When Winter Storm Uri hit, Marathon

declared force majeure and did not deliver the full amount of gas promised. Mercu-

ria disputed Marathon’s declaration of force majeure, resulting in this suit (and its

predecessor in district court).3

1
The Base Contract is attached to Marathon’s Motion for Traditional and No-Evidence Partial
Summary Judgment (Marathon MSJ) as Exhibit 1 and to Mercuria’s Response as Exhibit 1A.
2
“The NAESB is the consensus organization of United States oil and gas producers, and many of
its standards have been adopted by both the federal and state governments.” Mieco, L.L.C. v. Pio-
neer Nat. Res. USA, Inc., 109 F.4th 710, 714 n.2 (5th Cir. 2024); see also Luminant Energy Co. v.
Koch Energy Servs., LLC, 551 F. Supp. 3d 373, 379 n.5 (S.D.N.Y. 2021) (“NAESB is an organiza-
tion that creates standards for the gas and electricity industries, including a ‘Base Contract’ for
the sale of energy.”).
3
Additional details about the background in this case can be found in the Court’s prior opinion.
Marathon Oil Co. v. Mercuria Energy Am., LLC [Mercuria], 2025 Tex. Bus. 36, __ S.W.3d __ (11th
Div.).

2
¶3 Both parties moved for partial summary judgment,4 and the Court

granted in part and denied in part both motions.5 Having determined that analysis

relating to the Court’s holdings on the replacement-gas and buyback issues will

benefit the parties and the jurisprudence, the Court issues this opinion.

Rules of Contract Construction

¶4 The issue before the Court requires it to construe the Base Contract.

The meaning of an unambiguous contract is a question of law for the courts. 6 The

Court has laid out Texas’s general rules of contract construction in its prior opinion

in this case.7 In short, the Court holds parties to what they said in the contract and

interprets what they said to mean what an ordinary person reading the contract

would think it means.8 What an ordinary reader understands words to mean can be

influenced by the context in which the words are written, so courts read the contract

as a whole and consider things like the contract’s structure, the text surrounding

the disputed language, the nature of the contract, the purpose reflected in the con-

tract, word usage, grammar, and punctuation.9

4
Marathon MSJ; Mercuria’s Mot. for Summ. J. (Mercuria MSJ).
5
See Order on Marathon MSJ (Sept. 19, 2025); Order on Mercuria MSJ (Sept. 19, 2025).
6
URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755, 763 (Tex. 2018). The parties did not argue ambiguity
here.
7
Mercuria, 2025 Tex. Bus. 36, ¶ 6, __ S.W.3d at __ (listing authority).
8
Id.
9
Id. And, of course, if the contract defines terms or otherwise shows that its words are intended to
mean something different than usual, a reasonable reader would accept that.

3
¶5 The Base Contract is based on an NAESB contract form that has been

interpreted by many other courts, including in other force-majeure disputes arising

out of Winter Storm Uri.10 As discussed in the Court’s prior opinion in this case, it

is incumbent upon courts to protect the “continuity and predictability” provided by

such forms by construing them in a “uniform and predictable way.”11 Parties who

prefer a different outcome may modify the form as they see fit, and such modifica-

tions will be given effect without disrupting the industry’s reliance on the forms to

operate in accordance with the parties’ reasonable expectations.12

The Force-Majeure Provision

¶6 Section 11 of the NAESB form contract is the force-majeure provision.

Sections 11.1, 11.2, and 11.3 work together to delineate the parameters of what

10
See Freeport LNG Mktg., LLC v. Kinder Morgan Tex. Pipeline LLC, No. 14-22-00864-CV, 2025
WL 1109028, at *8 (Tex. App.—Houston [14th Dist.] Apr. 15, 2025, no pet.); Mieco, 109 F.4th at
714; Marathon Oil Co. v. Koch Energy Servs., LLC [Marathon II], No. CV H-21-1262, 2025 WL
950085, at *1 (S.D. Tex. Mar. 28, 2025); Targa Gas Mktg. LLC v. Koch Energy Servs., LLC
[Targa/Koch II], No. CV H-21-1258, 2024 WL 5328564, at *4 (S.D. Tex. Dec. 18, 2024), report
and recommendation adopted, 2025 WL 108190 (S.D. Tex. Jan. 14, 2025); Unit Petroleum Co. v.
Koch Energy Servs., LLC, No. 4:21-CV-01260, 2023 WL 4828375, at *1–3 (S.D. Tex. July 27,
2023); Marathon Oil Co. v. Koch Energy Servs., LLC [Marathon I], No. 4:21-CV-1262, 2023 WL
4032879, at *3 (S.D. Tex. May 8, 2023), report and recommendation adopted, 2023 WL 4033332
(S.D. Tex. June 15, 2023); LNG Ams., Inc. v. Chevron Nat. Gas, No. CV H-21-2226, 2023 WL
2920940, at *1 (S.D. Tex. Apr. 12, 2023); Ark. Okla. Gas Corp. v. BP Energy Co., No. 2:21-CV-
02073, 2023 WL 3620746, at *1–16 (W.D. Ark. May 24, 2023); Luminant, 551 F. Supp. 3d at
375–80.
11
Mercuria, 2025 Tex. Bus. 36, ¶ 6, __ S.W.3d at __ (citing Devon Energy Prod. Co., L.P. v. Shep-
pard, 668 S.W.3d 332, 346 (Tex. 2023); Wenske v. Ealy, 521 S.W.3d 791, 798 (Tex. 2017);
French v. Occidental Permian Ltd., 440 S.W.3d 1, 8 (Tex. 2014); Heritage Res., Inc. v. Na-
tionsBank, 939 S.W.2d 118, 129–30 (Tex. 1996) (plurality op. on rehearing)).
12
Id. (citing Wenske, 521 S.W.3d at 798; Devon, 668 S.W.3d at 346).

4
constitutes force majeure. Section 11.1 defines force majeure broadly: “any cause

not reasonably within the control of the party claiming suspension, as further de-

fined in Section 11.2”;13 Section 11.2 identifies a subset of events that are the

common examples of force majeure;14 and Section 11.3 identifies events that a party

cannot rely on to claim force majeure even if they fall within the broad definition of

causes outside the parties’ control.15 Additionally, Section 11.2 imposes a duty on

any party claiming force majeure to “make reasonable efforts to avoid the adverse

impacts of a Force Majeure and to resolve the event or occurrence once it has oc-

curred in order to resume performance.”16

¶7 Parties who use the NAESB form contract can modify its standard

terms through special provisions, and the parties did so here. Special Provision 5

modified Section 11.1 of the Base Contract. As modified, Section 11.1 provides in

relevant part:

[N]either party shall be liable to the other for failure to perform … , to
the extent such failure was caused by Force Majeure and the party
claiming excuse shall have no obligation to seek alternative Gas supplies
in order to satisfy any obligation hereunder.17

13
Base Contract § 11.1.
14
Id. § 11.2.
15
Id. § 11.3. As discussed below, some of the items listed in Section 11.3 are excluded unless they
fall within Section 11.2. Id. § 11.3(iv), (v).
16
Id. § 11.2.
17
Id. § 11.1, Special Provision 5 (emphasis added).

5
In this quote, the italicized language is what Special Provision 5 added.

Analysis

¶8 As discussed below, the Court concludes that Marathon had no duty

under the parties’ Contract to buy replacement gas on the spot market to meet its

February 2021 delivery obligations to Mercuria or to buy back that delivery obliga-

tion—whether before or instead of declaring force majeure or to satisfy its

“reasonable efforts” obligation under the force-majeure clause.

A. Marathon was not obligated to buy replacement gas.18

¶9 The parties dispute whether Special Provision 5 relieved Marathon of

(a) any obligation to buy gas on the spot market to fulfill its delivery obligations to

Mercuria in an event of force majeure or (b) only its obligation to buy spot-market

gas at other locations besides West Pool, the contractual delivery location. This is-

sue turns largely on whether the term “alternative gas supply” includes spot-

market gas available at West Pool. The Court concludes that it does, such that Spe-

cial Provision 5 relieved Marathon of any duty to buy spot-market gas, whether at

West Pool or elsewhere.

18
The summary-judgment briefing and order use the term “replacement gas.” The Court recog-
nizes that term could have different connotations in different contexts. What is at issue here is gas
that Marathon could have purchased from third parties on the spot market to meet its February
2021 delivery obligations to Mercuria.

6
1. Without Special Provision 5, Marathon would not have to buy spot-mar-
ket gas to invoke force majeure but might have to as a “reasonable effort.”

¶10 The phrase “alternative Gas supplies” is specific to this Contract and

is not the subject of prior decisions. But courts have construed the similar phrase

“Seller’s Gas supply” in Section 11.3 of the NAESB form contract, and both parties

rely on such cases here. Those cases are relevant here because they define the

phrase “Gas supply” and tell us what Marathon’s duty would have been without

Special Provision 5: Marathon would not be obligated to purchase spot-market gas

to rely on the force-majeure clause to excuse delivery, but it might have a duty to do

so as a “reasonable effort” under Section 11.2.

a. Virginia Power

¶11 First, the Fourteenth Court of Appeals defined “Gas supply” in Vir-

ginia Power Energy Marketing, Inc. v. Apache Corp., a suit arising out of Apache’s

declaration of force majeure under an NAESB form contract after Hurricanes Rita

and Katrina.19 The parties disputed what constituted Apache’s “Gas supply,” as

that term is used in Section 11.3(v), which provides that force majeure does not

apply “to the extent performance is affected by … the loss or failure of Seller’s Gas

supply or depletion of reserves, except … as provided in Section 11.2.”20 Under this

provision, Apache could prevail on its force-majeure claim only if a Section 11.2

19
297 S.W.3d 397, 399 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
20
Base Contract § 11.3(v) (emphasis added).

7
event—the hurricanes—caused the loss of its “Gas supply.”21 Virginia Power ar-

gued that “Gas supply” included Apache’s uncommitted gas from the same

geographic region that could have been used to meet Apache’s delivery obligation

to Virginia Power, such that Apache would need to prove that the hurricanes caused

the loss of all such gas.22 Apache argued that its “Gas supply” included only the

gas from specific offshore production platforms that Apache had internally ear-

marked for the contract, such that it need only show that the hurricanes caused it

to lose the gas from those platforms.23

¶12 The court of appeals agreed with Virginia Power. Applying the NAESB

form contract’s definition of “Gas” (“any mixture of hydrocarbons and noncom-

bustible gases in a gaseous state consisting primarily of methane”) and the ordinary

meaning of “supply” (“a quantity or amount that is ‘available for use’”), the court

held that “Gas supply,” as used in the NAESB form contract, means “the amount

or quantity of gas that was available to satisfy VPEM’s contractual demands.”24

21
Va. Power, 297 S.W.3d at 404; see also Mieco, 109 F.4th at 720–21 (consistently construing
Section 11.3 to mean that loss of seller’s gas supply will not trigger force majeure unless it “was
caused by one of the events listed in Section 11.2, such as a ‘weather related event[] affecting an
entire geographic region,” including Winter Storm Uri).
22
Va. Power, 297 S.W.3d at 405.
23
Id. at 407. This analysis applies only to Apache’s delivery obligations at one delivery point at
issue in Virginia Power. Apache had separate obligations to deliver gas at another delivery point
that was damaged by the hurricanes, preventing delivery. Id. at 403–04. The Court held that the
“reasonable efforts” requirement did not obligate Apache to deliver at an alternative location. Id.
24
Id. at 407.

8
Because Apache had not shown that it had no gas available from sources other than

the internally designated platforms, the court held there was a fact issue as to

whether Apache had available gas that could have been used to fulfil its obligation

to Virginia Power, as necessary to rely on the force-majeure clause.25

¶13 Notably, the trial court in Virginia Power ruled that “Apache was not

legally obligated to purchase gas on the spot market to meet its contractual com-

mitment to” Virginia Power, and Virginia Power did not appeal that decision. 26 It

was thus undisputed on appeal that the force-majeure provision did not obligate

Apache to purchase spot-market gas, and the parties fought only over what portion

of Apache’s own gas it was required to deliver. In fact, the court of appeals observed

in an earlier case that the plain language of the NAESB form contract indicated that

the duty to purchase gas on the spot market at prices inflated by a force-majeure-

caused supply shortage was “the very obligation” the seller sought to avoid by ne-

gotiating a force-majeure clause in the contract.27

25
Id. at 407–08. The Court pointed to evidence that Apache (a) had available uncommitted gas in
the same geographical area that could have been used to fulfill its contractual obligations but was
instead offered to new customers at higher prices and (b) sold spot-market gas to Virginia Power
at two other points along the same pipeline as the delivery point. Id.
26
Id. at 407 n.13.
27
Tejas Power Corp. v. Amerada Hess Corp., No. 14-98-00346-CV, 1999 WL 605550, at *3 (Tex.
App.—Houston [14th Dist.] Aug. 12, 1999, no pet.).

9
b. Mieco

¶14 The spot-market gas ruling that was uncontested in Virginia Power

was contested in Mieco, L.L.C. v. Pioneer Natural Resources USA, Inc., a force-

majeure dispute arising under an NAESB form contract in the wake of Winter Storm

Uri.28 Like in Virginia Power, the Mieco parties disputed what gas the seller, Pio-

neer, had to show was unavailable—i.e., what gas was included in “Seller’s gas

supply.” Pioneer argued that “Seller’s gas supply” meant the Permian Basin gas it

regularly produced from its crude oil operations in the Permian Basin; Mieco argued

that it included gas available for Pioneer to purchase on the spot market for the

delivery point.29

¶15 The Fifth Circuit adopted Pioneer’s position that its “Gas supply” was

the gas it produced in the Permian Basin.30 The court reasoned that, while Pioneer

sometimes purchased gas on the spot market to make up for shortfalls, the “vast

majority” of the gas it sold was residue gas from its operations in the Permian Ba-

sin, which was what Pioneer considered its “gas supply.”31 The court cited

28
109 F.4th 710 (5th Cir. 2024). Pursuant to the parties’ contract, the Mieco court applied New
York law. Id. at 716. But the court indicated that Texas and New York law were indistinguishable
on this issue.
29
Id. at 713, 721–22.
30
Id. at 713.
31
Id. at 713; see also Targa/Koch II, 2024 WL 5328564, at *1–6 (following Mieco but declining to
grant summary judgment that seller “had no obligation under any circumstances to purchase re-
placement gas”); Targa Gas Mktg. LLC v. Mieco LLC [Targa/Mieco], No. CV H-21-1128, 2023 WL

10
numerous consistent federal cases,32 and also relied in part on Virginia Power:

“Virginia Power interpreted ‘Seller’s gas supply’ to embrace only gas the seller

owned and could physically deliver to the buyer—not spot market gas.”33 The court

also noted that, while the contract language was unambiguous, it would have

reached the same conclusion even if it were ambiguous, relying in part on the fact

that the NAESB drafting committee repeatedly rejected efforts to amend the form

contract so that force majeure would not excuse performance when gas could be

purchased on the spot market for the delivery point.34

¶16 Mieco raised another issue not raised in Virginia Power: how did the

availability of spot-market gas impact Pioneer’s duty under Section 11.2 to “make

reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve

the event or occurrence once it has occurred in order to resume performance”?35

Despite having held that Pioneer did not have a duty to purchase spot-market gas

9546743, at *5, *6 (S.D. Tex. Aug. 8, 2023) (following the trial court in Mieco and granting sum-
mary judgment that contract did not require seller to purchase replacement gas).
32
Mieco, 109 F.4th at 723 n.17 (citing Canadian Breaks LLC v. JPMorgan Chase Bank, N.A., No.
2:21-cv-00037-M, 2024 WL 1337868, at *3 (N.D. Tex. Mar. 28, 2024) (holding “Seller’s sup-
ply ... refers to the energy that is generated at the relevant [production sources]” and not that
which is procured from third parties); Unit Petroleum, 2023 WL 4828375, at *1 (treating “gas
supply” as that produced by the seller, not gas on the spot market); Targa Gas Mktg. LLC v. Koch
Energy Servs., LLC [Targa/Koch I], No. H-21-1258, 2024 WL 1076839, at *1 (S.D. Tex. Feb. 20,
2024), report and recommendation adopted, 2024 WL 1201622 (S.D. Tex. March 20, 2024) (treat-
ing defendant’s “gas supply” as gas it processed, not spot market gas)).
33
Id. at 723.
34
Id. at 722 (citing Amicus Br. of Marathon Oil Corp. & Targa Gas Mktg. L.L.C., at 7–8).
35
Id.; Base Contract § 11.2.

11
to fulfill its original delivery obligation, the court held that Pioneer might still owe

a duty to purchase spot-market gas as a “reasonable effort.”36 The court thus re-

manded the case to the trial court for further consideration.37

c. Marathon I

¶17 Both before and after Mieco, judges in the Southern District of Texas

reached similar results in other force-majeure disputes arising under an NAESB

form contract in the wake of Winter Storm Uri,38 most significantly in Marathon

Oil Co. v. Koch Energy Services, LLC [Marathon I].39 Marathon I is a force-majeure

36
Mieco, 109 F.4th at 725–27. Importantly, the base contract in Mieco included special provisions,
not present here, that imposed additional or heightened force-majeure burdens on the seller, in-
cluding a “due diligence” duty. Id. at 726. The Mieco court addressed the traditional “reasonable
efforts” duty and the added “due diligence” duty together and held that the trial court erred in not
reaching that issue after resolving the Section 11.3(v) dispute. Id.
37
Id. at 727.
38
See Targa/Mieco, 2023 WL 9546743; Targa/Koch II, 2024 WL 5328564. Targa was the seller
that invoked force majeure in both of these cases, and in both cases, Targa sought the same sum-
mary-judgment ruling: a declaratory judgment that (1) Winter Storm Uri was a force-majeure event
within the meaning of the base contract; (2) Targa’s failure to supply full contract volumes was
caused by force majeure; and (3) Targa had no obligation to purchase replacement gas.
Targa/Mieco, 2023 WL 9546743, at *4; Targa/Koch II, 2024 WL 5328564, at *1. In the first case,
decided before the Fifth Circuit’s opinion in Mieco, the court granted Targa’s summary-judgment
request, without expressly addressing the “reasonable efforts” issue. Targa/Mieco, 2023 WL
9546743, at *6; see also Plf.’s Opp. to Def.’s Mot. for Partial Summ. J., Targa/Mieco, No. 4:21-cv-
01128, 2023 WL 11230109 (S.D.Tex. June 29, 2023) (arguing briefly that Targa had not satisfied
its “reasonable efforts” obligation under Section 11.2 because it “could have avoided the adverse
impacts of Winter Storm Uri entirely by purchasing widely available gas”). In the second case,
decided after Mieco, the court declined to grant summary judgment on whether Targa had an obli-
gation to purchase replacement gas, relying on Mieco to hold that while Section 11.3(v) did not
require Targa to purchase replacement gas to invoke force majeure, purchasing replacement gas
could have been necessary as a “reasonable effort” under Section 11.2. Targa/Koch II, 2024 WL
5328564, at *5–6. Because the court could not rule out that possibility as a matter of law, it con-
cluded that Targa’s requested declaratory relief was “simply too broad.” Id.
39
Marathon I, 2023 WL 4032879, at *13.

12
dispute arising out of Winter Storm Uri in which Marathon was the seller claiming

force majeure, and the parties were represented by the same law firms that repre-

sent the parties here.40 Consistent with Mieco, the Marathon I court held that

Marathon was not obligated to buy gas on the spot market to fulfill its delivery ob-

ligations under the parties’ contract,41 pointing out that otherwise the force-

majeure clause would be “essentially meaningless because it would mean that a

seller could never invoke force majeure so long as there was some gas available an-

ywhere in the world, at any price.”42 If the existence of a spot market precluded

sellers from relying on the force-majeure clause, a well-freezing storm would rarely,

if ever, trigger the clause, even though the clause expressly covers regional weather

events “such as low temperatures which cause freezing or failure of wells[.]”43

¶18 Also consistent with Mieco, the court later clarified the scope of its

summary-judgment ruling, stating that Koch could not argue that Marathon could

40
See Mercuria MSJ at 15. The parties in that case were also represented by counsel that also rep-
resent the parties in this case.
41
Marathon I, 2023 WL 4032879, at *13.
42
Id. (quoting Ergon-West Va., Inc. v. Dynegy Mktg. & Trade, 706 F.3d 419, 424 n.5 (5th Cir.
2013); also citing LNG Ams., 2023 WL 2920940, at *8); Mieco, LLC v. Pioneer Nat. Res. USA,
Inc., No. 3:21-CV-1781-B, 2023 WL 2064723, at *6 (N.D. Tex. Feb. 15, 2023), aff’d in part and
rev’d in part by Mieco, 109 F.4th 710 (5th Cir. 2024)).
43
Base Contract § 11.2; see LNG Ams., 2023 WL 2920940, at *8 (“If the existence of a sport
market precluded force majeure, a well-freezing storm would never qualify unless all suppliers lost
virtually all of their production feeding the [delivery point].”); Tejas Power Corp., 1999 WL
605550, at *3 (holding that if it were to require purchasing replacement gas, “the force majeure
clause would be meaningless. So long as gas could be procured anywhere in the world, at any price,
[Marathon] would be obliged to meet its contractual obligations.”).

13
not declare force majeure because gas was available for purchase on the spot market

but could still “put on the full panoply” of what it considered a “reasonable effort”

under Section 11.2.44

d. Applicability of Virginia Power, Mieco, and Marathon I here

¶19 This Court generally agrees with and will follow Virginia Power,

Mieco, and Marathon I with respect to the holdings discussed above. Based on this

non-binding but persuasive authority, the Court holds that: (1) the phrase “Seller’s

Gas supply” in Section 11.3 refers to the gas Marathon had available to satisfy its

delivery obligations under the parties’ Contract45 and does not include gas available

for purchase on the spot market;46 (2) Marathon was not required to purchase spot-

44
Marathon II, 2025 WL 950085, at *8.
45
See Va. Power, 297 S.W.3d at 407. Virginia Power is distinguishable from this case in a notable
respect. A key dispute between the parties was over whether “Gas supply” could be limited to
certain gas from specific offshore platforms Apache had internally designated as the source for
fulfilling the parties’ contract but had not designated in any way in the contract documents. As the
court pointed out, there was evidence that “[i]f Apache and VPEM wanted to ‘path’ the gas from
specific wellhead(s) to delivery points then that information should have been in the contract, or
at least the Transaction Confirmations, and it was not.” Id. at 406. Here, in contrast, Marathon’s
transaction confirmation does identify an aspect of its delivery path—“Enable Gathering and Pro-
cessing”—and the Court has held that both parties’ transaction confirmations are part of the
parties’ Contract. Mercuria, 2025 Tex. Bus. 36, ¶ 2, __ S.W.3d at __. Thus, while this Court
adopts Virginia Power’s interpretation of “Gas supply,” the interaction between the meaning of
that phrase and the other, different contract language present here may result in a different out-
come with respect to what gas is “available” or what the delivery obligation to be satisfied is. In
Marathon I, for example, the court held that because Marathon designated the Midship pipeline in
its transaction confirmation, the base contract did not require Marathon to deliver on any other
pipeline as a matter of law. Marathon I, 2023 WL 4032879, at *12. Ultimately, this Court need
not resolve that issue at this stage.
46
See Mieco, 109 F.4th at 714. The Fifth Circuit left open the possibility that “Seller’s Gas supply”
could have a different meaning when the seller is a “middleman” rather than a producer. Id. at
722. Marathon is not a middleman; it is a producer similar to Pioneer in Mieco.

14
market gas to fulfill its original delivery obligation and need not prove that Winter

Storm Uri prevented it from doing so to satisfy Section 11.3(v);47 and (3) in the ab-

sence of Special Provision 5, Marathon might still have had a duty to purchase spot-

market gas as a “reasonable effort” under Section 11.2.48 This leaves two key ques-

tions for this case: (1) what is the meaning of “alternative Gas supplies,” and (2)

whether the addition of Special Provision 5 eliminated Marathon’s potential duty

to purchase spot-market gas as a reasonable effort.

2. “Alternative Gas supplies” includes spot-market gas, whether available
at the delivery location or elsewhere.

¶20 Having concluded that “Seller’s Gas supply” is the gas Marathon had

available to satisfy its delivery obligations under the parties’ Contract and not spot-

market gas, the Court turns to the meaning of “alternative Gas supplies.” The

Court concludes that “Seller’s Gas supply” and “alternative Gas supplies” are two

sides of the same coin: “alternative Gas supplies” are gas supplies that could be

used to fulfill Marathon’s delivery obligation instead of or as a substitute for the gas

that Marathon is excused from delivering by the force-majeure clause—typically,

the seller’s gas supply. Because spot-market gas is not part of Marathon’s gas sup-

ply, it is one of the “alternative gas supplies” covered by Special Provision 5.

47
Id. at 713; Marathon I, 2023 WL 4032879, at *11–13.
48
Mieco, 109 F.4th at 727; Marathon I, 2023 WL 4032879, at *13.

15
¶21 First, “Gas supplies” in Special Provision 5 and “Gas supply” in Sec-

tion 11.3(v) have a consistent meaning. Absent a contrary indication, there is a

“natural presumption” that the same words are intended to have the same meaning

throughout a contract.49 The Contract shows that in both contexts, “Gas supply”

refers to gas available to Marathon to satisfy its delivery obligations to Mercuria.50

“Gas supply” thus includes spot-market gas, though “Seller’s Gas supply” does

not include spot-market gas because it is not owned by Marathon, the seller.

¶22 Second, because the Contract does not define “alternative,” the Court

gives that term its ordinary meaning. Along with other, less apropos definitions,

contemporary dictionaries generally define the adjective “alternative” as reflecting

a choice between two (or more) mutually exclusive options, potentially with the

“alternative” option being the one that is a “substitute” for the original or more

usual option.51 The meaning of “alternative Gas supplies” thus necessarily depends

on what they are an “alternative” to.

49
RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 126 (Tex. 2015) (quoting rule of statutory
interpretation from Atlantic Cleaners & Dyers v. United States, 286 U.S. 427, 433 (1932), applying
rule to contract construction, and noting that rule is “not rigid” and yields when contract text
indicates different intent); see also Farmers Grp., Inc. v. Geter, 620 S.W.3d 702, 709 (Tex. 2021);
Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex. 1990); Antonin Scalia & Bryan A.
Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 170-173 (2012).
50
See Va. Power, 297 S.W.3d at 407.
51
E.g., Alternative, OXFORD ENGLISH DICTIONARY (“Of two things: Such that one or the other may
be chosen, the choice of either involving the rejection of the other”); Alternative, DICTIONARY.COM
(2024) (“affording a choice of two or more things, propositions, or courses of action,” “employing
or following nontraditional … methods …”); Alternative, COLLINS DICTIONARY (2024), available

16
¶23 Third, to determine what “alternative Gas supplies” are an alternative

to, the Court looks to the textual context in which that phrase appears. Section 11.1

states that “neither party shall be liable to the other for failure to perform … , to the

extent such failure was caused by Force Majeure and the party claiming excuse shall

have no obligation to seek alternative Gas supplies in order to satisfy any obligation

hereunder.”52 Thus, “alternative Gas supplies” is juxtaposed with the gas supply

that Marathon would “be liable to [Mercuria] for failure to [deliver]” except “to the

extent such failure was caused by Force Majeure.”53 In circumstances like Virginia

Power, Mieco, Marathon I, and this case, that is generally the “Seller’s Gas sup-

ply”: the gas supply the seller must show the storm caused to be unavailable to

fulfill its delivery obligations under the contract.54

¶24 Mieco and Marathon I foreclose Mercuria’s argument that Marathon’s

original delivery obligation extended to buying gas available on the spot market.55

Under those holdings, Marathon might have to purchase spot-market gas to fulfill

the force-majeure clause’s “reasonable efforts” duty, but it did not have to do so to

at www.collinsdictionary.com (“An alternative plan or offer is different from the one that you al-
ready have, and can be done or used instead”); Free Dictionary (“Substitute or other”).
52
Base Contract § 11.1, Special Provision 5 (emphasis added).
53
Id.
54
See Va. Power, 297 S.W.3d at 407; Mieco, 109 F.4th at 724; Marathon I, 2023 WL 4032879, at
*13.
55
Mieco, 109 F.4th at 713; Marathon I, 2023 WL 4032879, at *11–13.

17
fulfill its original delivery obligations or to rely on the force-majeure provision.56

Moreover, as the Fifth Circuit points out, the NAESB drafting committee rejected

efforts to revise the force-majeure clause in the form contract to require sellers to

buy gas available on the spot market.57 Mercuria cannot obtain by judicial fiat con-

tract terms it failed to obtain from the NAESB or in negotiations with Marathon.

¶25 Because spot-market gas is not part of the gas supply Marathon was

obligated to deliver unless excused by force majeure, it is part of the “alternative

Gas supplies” that Marathon “ha[d] no obligation to seek … in order to satisfy any

obligation hereunder” pursuant to Special Provision 5.58

3. Special Provision 5 relieved Marathon of any obligation to obtain spot-
market gas as a “reasonable effort” under Section 11.2.

¶26 Under Section 11.2, Marathon has a duty to “make reasonable efforts

to avoid the adverse impacts of a Force Majeure and to resolve the event or occur-

rence once it has occurred in order to resume performance.”59 The courts in Mieco

and Marathon I left open the question of whether the seller might have a duty to

purchase spot-market gas as such a “reasonable effort.”60 The question here is

56
Mieco, 109 F.4th at 727; Marathon I, 2023 WL 4032879, at *13.
57
Mieco, 109 F.4th at 722.
58
Base Contract § 11.1, Special Provision 5.
59
Base Contract § 11.2.
60
Mieco, 109 F.4th at 727; Marathon I, 2023 WL 4032879, at *13.

18
whether the language added by Special Provision 5 eliminates that possibility. The

Court concludes that it does.

¶27 Section 11.3(v) does not excuse any party from any contractual duty;

it dictates when a party cannot rely on the force-majeure clause—i.e., when a duty

is not excused.61 Thus, in Virginia Power, Mieco, and Marathon I, even if the seller

prevailed on its interpretation of Section 11.3, the seller was still subject to what-

ever duties it owed under Section 11.2’s “reasonable efforts” mandate. Special

Provision 5, on the other hand, expressly relieves the party claiming force majeure

of any “obligation to seek alternative Gas supplies in order to satisfy any obligation

hereunder.”62 The question becomes whether this disclaimer extends to any duty

to seek spot-market gas under Section 11.2. The Court holds that it does.

¶28 Having already held that Special Provision 5 excuses Marathon from

any duty to seek spot-market gas “in order to satisfy any obligation hereunder,” the

Court easily concludes that “any obligation hereunder” includes any “reasonable

efforts” obligation under Section 11.2. The term “hereunder” in a contract typi-

cally extends to the whole contract. 63 Even if it does not extend to the whole

61
Base Contract § 11.3.
62
Base Contract § 11.1, Special Provision 5 (emphasis added).
63
Hereunder, BLACK’S LAW DICTIONARY (12th ed. 2024) (defining term to mean “[i]n accordance
with this document” or “[l]ater in this document”). In the contractual context, courts have typi-
cally interpreted “hereunder to refer to the whole agreement.” See, e.g., Terra Int’l, Inc. v. Miss.
Chem. Corp., 119 F.3d 688, 692 (8th Cir. 1997) (observing that in contractual context,

19
contract here, at a minimum, it extends to the obligations imposed in the very next

part (Section 11.2) of the very same provision (the force-majeure provision). Thus,

under Section 11.1 of the Base Contract, as modified by the parties, Marathon had

no duty to seek spot-market gas “in order to satisfy [its] obligation” under Section

11.2 to “make reasonable efforts” to ameliorate Winter Storm Uri’s effects.

B. Marathon was not obligated to buy back its delivery obligation.

¶29 Mercuria concedes that the Contract did not require Marathon to buy

back its delivery obligations in general but argues that there is nevertheless a fact

issue as to “[w]hether a buyback under this set of facts constitutes a ‘reasonable

effort’” under Section 11.2.64 The Court concludes that the Contract language fore-

closes such a fact issue.

¶30 First and foremost, Section 11.2’s text does not encompass a buyback.

Section 11.2 obligates Marathon to “make reasonable efforts [1] to avoid the ad-

verse impacts of a Force Majeure and [2] to resolve the event or occurrence once it

“‘hereunder’ typically signified ‘under the agreement’”); Gregory v. Electro-Mech. Corp., 83 F.3d
382, 386 (11th Cir. 1996); Mediterranean Enters., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464
(9th Cir. 1983); Int’l Asset Mgmt., Inc. v. Holt, 487 F. Supp. 2d 1274, 1288 (N.D. Okla. 2007).
64
A buyback is a purely financial transaction in which one party pays the other to be relieved of its
duty to perform under the contract. See Marathon I, 2023 WL 4032879, at *14; Hartree Partners,
LP v. Vaquero Permian Processing LLC, 209 N.Y.S.3d 4, 7 (N.Y. App. Div. 2024). Mercuria de-
scribes a “buyback” as “an agreement between counterparties in which one party pays money to
the other party in lieu of physically exchanging gas molecules to meet its contractual obligation.”
Mercuria Resp. to Marathon MSJ at 15.

20
has occurred in order to resume performance.”65 A buyback would do neither. It

would not “avoid the adverse impacts” of Winter Storm Uri; it would merely shift

the financial consequences from one party to another. The storm would have had

the same impact on Marathon’s gas supply, and Marathon would have delivered the

same amount of gas to Mercuria. The only difference would be that Marathon paid

Mercuria for the gas it did not deliver. It likewise would not “resolve the event or

occurrence … in order to resume performance.” A buyback does not allow perfor-

mance to resume; performance does not occur at all under a buyback.

¶31 Second, a buyback duty runs counter to the quintessential purpose of

the force-majeure clause and would render it ineffective. By its very nature, a force-

majeure clause identifies circumstances in which a nonperforming party will not be

liable for failing to perform; instead, the risk of nonperformance is allocated to the

other party when the force-majeure criteria are satisfied. A “reasonable efforts”

duty requiring the nonperforming party to buy back its performance obligation

would shift that risk back to the nonperforming party—undoing the very thing the

force-majeure clause does.

¶32 The case law supports this result. The Marathon I court addressed the

same buyback dispute under similar circumstances and concluded that Marathon

65
Base Contract § 11.2.

21
had no duty to buy back its delivery obligation.66 The court pointed out that impos-

ing a duty on a seller to buy back its delivery obligation in the context of force

majeure would render the force-majeure provision meaningless: because a buy back

is “always possible,” force majeure would never excuse a failure to deliver if the

seller had a duty to buy back its delivery obligation.67

¶33 Moreover, as Marathon points out, Mercuria’s own expert, James Ar-

nold, admitted that Marathon was not required to buy back its delivery obligation

as a reasonable effort:

Q. Are you offering an opinion that Marathon should have done a buyback
of the Mercuria gas?

A. Well, you used the word “should.” I’m saying they could have, that
would have been a different way to meet that obligation, except buy-
backs are a little different. I’m not — on it’s own, I wouldn’t call it a
reasonable effort that you should or could make. I would say a buyback
is an alternative method to perform. … But you would – a buyback in
itself is not — I would not call that a sole reasonable effort. I would
say that it is a — it’s another option — excuse me — another way when
you do have other reasonable efforts that would do it. 68

Mercuria has not cited any controverting evidence on this point.

Conclusion

¶34 For these reasons and the reasons articulated in Marathon’s motion for

partial summary judgment, the Court granted summary judgment holding (among

66
Marathon I, 2023 WL 4032879, at *14.
67
Id.
68
James Arnold Dep. 119:15-25, 120:1-6 (July 24, 2025), Exh. 16 to Marathon MSJ.

22
other things) that the parties’ Contract did not obligate Marathon to acquire re-

placement gas to satisfy its delivery obligation to Mercuria or buy back its delivery

obligation from Mercuria as a prerequisite or alternative to declaring force majeure

or as a “reasonable effort” under Section 11.2 of the Base Contract.

Date signed: October 14, 2025

Hon. Melissa Andrews
Judge of the Texas Business Court,
Third Division, sitting by assignment
in the Eleventh Division

23