A key hearing is set for this Friday in Big Spring, Texas, in a legal battle that could have wide-reaching implications for the Permian Basin’s leasing and reporting practices.
The case, initially filed by Pioneer Natural Resources and now inherited by ExxonMobil following its acquisition, involves a $500 million tortious interference claim against Texas-based Pony Oil. At the heart of it is a contested top lease located just miles from the Midland Country Club—an area known for its high-value acreage and strategic position in the Permian Basin.
Last week, Pony Oil filed a motion for sanctions alleging that critical title and production records—some dating back more than five years—were withheld until recently and only after court intervention. Pony and its legal team believe this could be one of the largest fraud cases in Permian Basin history, with a major oil and gas company using a $500 million lawsuit to cripple a much smaller oil and gas company. The case raises broader questions: Why such aggressive litigation? And what, if anything, is being protected behind the scenes?
If the allegations in the motion prove to be true, it raises a difficult question: Why would a company like Pioneer—at the time of filing—choose to stick its neck out so far and risk compromising its integrity if it was confident in the strength of its leasehold? The move invites deeper scrutiny into how far operators are willing to go to defend positions that may not stand up to complete legal and market transparency.
The hearing will mark the first time Pioneer and Exxon must formally respond to the allegations in open court. Observers say the outcome could carry ripple effects for future top leasing activity, disclosure practices, and potentially even reserve valuations in the basin.
“I can’t speak to the current litigation, but it’s been pretty shocking,” said John Paul Merritt, CEO and founder of Pony Oil. “Exxon has a long-standing reputation as a leader in this industry, setting the standard on integrity and helping push this country forward in energy development and independence. I’m just glad these alleged practices are finally seeing some light, hopefully. I also believe top leasing is critical to the health of this industry—it’s a check-and-balance system that protects mineral owners, operators, and investors. It keeps the market honest.”
Now, as the matter enters the homestretch and heads toward a trial date of October 6, many in the industry will be watching closely to see how these questions are answered and what precedents may be set.
Cause No. 7738
