Why your drillsite title opinion doesn't cover brine.

Operators moving into the Smackover lithium trend usually arrive with a reasonable assumption: they hold drillsite title opinions on the acreage, so title is handled. It is not. A drillsite opinion answers one question — who owns the oil, gas, and associated hydrocarbons in the unit, and who is entitled to the proceeds — and a brine project asks a different one. Texas has still not said, by statute or appellate decision, whether lithium dissolved in Smackover brine belongs to the surface estate, the mineral estate, or the oil and gas lessee. Until it does, the title work on a brine project is a separate examination, from a separate starting point, with its own conclusion. This article explains what that examination covers, where the law stands after the 2025 decisions, why project lenders will insist on it, and what the 2027 Legislature could change.

What a drillsite opinion assumes

A conventional Texas drillsite opinion starts from the mineral estate. The examiner traces the mineral chain, identifies the leases and their burdens, calculates net revenue interests, and lists the curative required before a well is spudded. The surface chain is examined only as far as needed to confirm the severance and any surface-use restrictions. Groundwater rights, salt-water rights, and prior brine, salt, or sulfur instruments are rarely material to the hydrocarbon question and are often not abstracted at all. That is the correct scope for the question asked. It is the wrong scope for brine, because the brine question begins in the surface chain and may never leave it.

Where the law actually stands

Three lines of Texas authority bear on brine, and none of them answers the question directly.

Water is surface. Groundwater belongs to the surface owner, and the Supreme Court of Texas has treated it as owned in place since Edwards Aquifer Authority v. Day (2012). Salt water has been part of the surface estate since Robinson v. Robbins Petroleum (1973), which allowed a lessee to use it for the lease but not to take it for other operations. Under Lightning Oil v. Anadarko (2017) the surface owner owns the subsurface matrix itself, and under Myers-Woodward v. Underground Services Markham (May 16, 2025) the surface owner owns the empty space left when a mineral is removed; the mineral owner takes the salt and no more. If Smackover brine is "water," those cases point to the surface.

"Other minerals" is a question of date and words. Whether an unnamed substance passed with a grant or reservation of "oil, gas and other minerals" depends on when the instrument was signed. For instruments dated after June 8, 1983, Moser v. United States Steel (1984) asks whether the substance falls within the ordinary and natural meaning of "minerals," whether or not the parties knew it was there. For earlier instruments the surface-destruction test of Acker v. Guinn (1971) and the two Reed v. Wylie decisions (1977, 1980) controls, and a substance that could only be removed by consuming the surface stays with the surface owner. Lithium itself, as an element, is plainly a mineral in the ordinary sense; the harder question is whether lithium in solution in brine is a mineral or a constituent of water, and no Texas appellate court has decided it. A Northeast Texas chain of title typically contains severances on both sides of the 1983 line, which means the answer can differ tract by tract within a single unit.

Produced water is mineral — but the Court stopped there. In Cactus Water Services v. COG Operating (June 27, 2025) the Supreme Court held that water produced from an oil and gas well is the lessee's, as a waste byproduct of hydrocarbon production, unless the conveyance expressly reserves it; "produced water is not water," and a grant of "oil and gas" carried it. Two features of that opinion matter for brine. First, footnote 3: the Court "express[ed] no view regarding ownership of any nonhydrocarbon minerals included in liquid-waste byproduct, as no such substances are in dispute here." Second, the reasoning rests on produced water being waste that the lessee is obligated to handle — a rationale that does not transfer to brine produced on purpose, from a formation, for its lithium. Justice Busby's concurrence, joined by two other justices, flagged the open questions the majority left behind. Cactus Water settles the chain for lithium recovered incidentally from Permian produced water. It does not settle Smackover brine, and a title opinion that cites it as if it did is overstating the law.

The Legislature has declined, twice, to say. When it gave surface owners geothermal energy in 2023, it carved brine out expressly: Natural Resources Code §141.004(c) provides that the section does not "apply to minerals dissolved or otherwise contained in groundwater, including in hot brines." Senate Bill 1763 in 2025 would have defined "brine minerals" and placed them in the mineral estate; it died in the Senate Natural Resources Committee. The Railroad Commission's Statewide Rule 82 regulates how brine is produced and re-injected, and Water Code §27.036 gives the Commission jurisdiction over the wells, but neither says who owns what comes up. The ownership question is, today, exactly where it was in 2023, with more money riding on it.

What a brine mineral title opinion covers

Because the question cannot be answered by starting from the mineral estate and stopping, the examiner traces both estates in full and then applies the instrument-by-instrument analysis above. A brine mineral title opinion on a Smackover tract covers, at minimum:

• The surface chain, including every reservation or conveyance of groundwater, salt water, or "water rights," any geothermal reservation, and — for instruments recorded before June 18, 2023 — the §141.004 savings-clause analysis, since geothermal and brine are frequently produced from the same wellbores.
• The mineral chain, with attention to the exact words of each severance ("oil, gas and other minerals," "all minerals," "oil and gas only," lists that include or exclude salt, sulfur, potash, or lithium) and the date of each instrument relative to June 8, 1983, which fixes whether Moser or the surface-destruction test applies.
• Prior brine, salt, sulfur, bromine, and geothermal instruments, which are more common in Northeast Texas than developers expect and can control the answer on a given tract regardless of the general rule.
• Existing oil and gas leases, and whether their granting clauses reach brine produced for mineral extraction (usually not), what Cactus Water does and does not give the lessee, and any amendments or ratifications purporting to add brine rights.
• Brine leases of record, from which estate each was taken, whether the lessee has covered every estate with a colorable claim, and whether the lease defines "brine" and "brine minerals" in a way that will survive a statute.
• Unit and pooling instruments, because Texas has no brine-specific pooling statute, so a brine unit today exists only by contract and every tract's consent has to be in the chain.

The opinion then states a conclusion the way a lender needs it stated: which estate most likely holds the brine minerals on the tract, how confident the examiner is and why, and which additional instruments — leases from the other estate, ratifications, stipulations of interest, corrective deeds — would make the project's position bankable whichever way the law eventually breaks.

Why lenders and investors will ask for it

A project financing or an equity raise on a Smackover position will be diligenced by counsel who understand that the ownership question is open. A lease schedule and a set of drillsite opinions will not satisfy them; an opinion that addresses brine directly, with a curative and leasing program attached, will. The scale is not small. Smackover Lithium's September 2026 assessment of its Franklin Project describes roughly 76,000 acres under brine lease across Hopkins, Franklin, and Titus counties and $3.5 billion of initial capital, with a feasibility study targeted for 2027. Capital on that scale is not advanced against acreage whose brine rights were leased from one estate on the assumption that the other has no claim. Across the state line, Arkansas has had a brine statute, a conservation commission with unitization authority, and a court-approved 2.5 percent lithium royalty since last year; a lender that has closed on an Arkansas unit will ask why the Texas side of the same formation cannot show the same certainty, and the honest answer is that it cannot yet — which is exactly why the opinion, and the leasing it drives, have to do the work the statute does not.

What to look for in 2027

The 90th Legislature convenes January 12, 2027, and bills can be pre-filed from November 9. Five things could change the examination, and each of them changes it differently.

1. A brine-minerals ownership statute. Expect Senate Bill 1763 or a successor to return. The three design questions for title purposes are which estate the statute names; whether it defines "brine" to exclude groundwater and produced water, as the 2025 bill did; and what it says about instruments already of record. The geothermal statute is the model: §141.004 applies "except as otherwise expressly provided" by an existing conveyance, and the Texas Constitution's bar on retroactive laws makes any broader reach unlikely. A default rule helps on new instruments. It does not relieve the examiner of tracing both chains for every severance signed before the effective date — which, in the Smackover, is nearly all of them.
2. A brine unitization or pooling statute. Developers will ask for a Mineral Interest Pooling Act analogue so the Commission can force-pool holdouts into a brine unit. If it passes, pooled interests, unit designations, and Commission orders become instruments the opinion has to find and construe; if it does not, the unit remains a contract and the consent of every tract stays on the critical path.
3. Royalty and valuation. Texas sets no uniform brine royalty and has no property-tax guidance for brine minerals; the Bureau of Economic Geology has told legislators to expect findings on water rights and royalties by the end of this year. Royalty is a lease question rather than a title question, but any statutory royalty will be computed on an ownership the examiner has to establish first.
4. The courts, after Cactus Water. Footnote 3 is an invitation. The first appellate case to put lithium in produced water, or lithium in purpose-produced brine, squarely before a court will decide more than any bill, and the concurrence suggests at least three justices are ready for it. Watch the Business Court as well: brine disputes between sophisticated parties will increasingly land there.
5. The Railroad Commission. One of the three seats is decided on November 3, and the winner serves through 2032. Rule 82 is in its first full year, the federal Class V primacy question for spent-brine injection wells is unfinished, and the first contested brine dockets — spacing, setbacks, the line between a brine well and a geothermal injection well under Rule 46 — are still ahead. None of that is title, but a permit issued to a project that leased from the wrong estate is a permit the project cannot use, and an opinion that is current when the application is filed is cheaper than one commissioned after a protest.

Practical guidance

• Do not rely on existing drillsite or division order opinions for brine rights; they were not written to answer the question, and most of them did not abstract the surface chain far enough to try.
• Commission brine mineral title opinions on the core acreage first and let them drive the leasing program, rather than leasing first and examining later.
• Where the opinion shows a credible claim in more than one estate, lease from each. The additional royalty burden is the price of a bankable position, and it is small next to a plant built on brine leased from the wrong owner.
• Draft the brine lease so it survives a statute: define "brine" and "brine minerals," state which estate the lessor claims under, and include a ratification covenant that obligates the lessor to confirm the lease if the law assigns the minerals to the lessor's estate.
• Keep the opinions current. A supplemental opinion after the 2027 session, or after the first appellate decision, is inexpensive compared with the alternative.

Brine mineral title opinions are a defined, fixed-fee product in our title practice; the examination is document-intensive in exactly the way the firm's tooling is built for, which is how an opinion on a Smackover tract can be delivered on a quoted price and a defined timeline rather than as an open-ended research project.

Scott Beckmen is the Managing Partner of Windward Counsel, PC, a business law firm in Flower Mound, Texas, and leads the firm's lithium-brine, geothermal, and Railroad Commission work. This article is general information about Texas law as of its date, not legal advice about any tract, lease, or project, and does not describe any client matter. Attorney advertising. Not certified by the Texas Board of Legal Specialization.

This article is general information about developments in Texas and federal law as of its publication date, not legal advice about any specific tract, lease, project, or offering. Laws and rules change; talk to counsel about your situation before acting. Attorney advertising.