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March 13, 2026 Get Citation Alerts Download PDF Add Note

Equinor Energy Lp v. Lindale Pipeline, LLC

Texas Supreme Court

• Citations: None known
• Docket Number: 24-0425
• Judges: Sullivan

• Disposition: The Court reverses the court of appeals' judgment and renders judgment.

• Opinion

• Authorities (6)

• Cited By (0)

• Summaries (0)

• Similar Cases (2K)

• PDF

Disposition

The Court reverses the court of appeals' judgment and renders judgment.

Lead Opinion

                        by Sullivan

Supreme Court of Texas
══════════
No. 24-0425
══════════

Equinor Energy LP,
Petitioner,

v.

Lindale Pipeline, LLC,
Respondent

═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the First District of Texas
═══════════════════════════════════════

Argued October 9, 2025

JUSTICE SULLIVAN delivered the opinion of the Court.

Did Equinor Energy LP breach a contract with its water supplier
and pumper, Lindale Pipeline, LLC, by purchasing water from other
suppliers for use in fracking its oil wells? The answer is no because the
oil wells sit outside the scope of the contract’s exclusivity clause. We
therefore reverse and render judgment for Equinor.
I
Fracking is a thriving industry in the United States. Short for
“hydraulic fracturing,” it involves pumping water “down [a] well and
into a formation under pressure high enough to cause the formation to
crack open, forming passages through which oil or gas can flow into the
wellbore.” 8 Howard R. Williams & Charles J. Meyers, Oil and Gas Law
414 (Patrick H. Martin & Bruce M. Kramer, eds. 2024). Fracking
requires large amounts of water, so fracking companies often contract
with water suppliers to transport water to well sites.
In the early days of fracking, the normal practice was to transport
water to well sites by truck. But in 2000, Dale Behan developed a way
to transport water directly to well sites via pipelines. For the next decade,
he ran a company that built these pipelines in Texas.
Around 2009, Behan’s company expanded its business to North
Dakota and began providing water to Equinor’s predecessor for fracking
operations there. Behan and Equinor’s predecessor agreed that laying
an underground pipeline would be more efficient than trucking in the
water. So Behan formed a new company, Lindale, which contracted with
Equinor’s predecessor to supply water through the new pipeline in
North Dakota. Under the contract, Equinor’s predecessor would finance
the pipeline’s construction and take ownership of the pipeline once
constructed. In exchange, Lindale agreed to serve as the exclusive water
supplier “on the Pipeline” and to charge below-market rates for the water.
Relevant here, Section 4 of the contract provides in relevant part
that “Lindale shall be the sole and exclusive water provider and pumper
on the Pipeline; however, in the unlikely event that Lindale is unable to

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provide water through the Pipeline for [Equinor], [Equinor] may then
use other water sources or pumpers on the Pipeline.” The contract
defines “Pipeline” as the “freshwater pipeline, lateral lines, related
facilities, well-site appurtenances, rights-of-way, easements, and permits
owned by [Equinor] as of the date of this Agreement, including without
limitation, those described and shown on [the map] attached hereto.”
A few years after the parties executed the contract, Equinor
acquired the predecessor company that’d signed the contract with
Lindale. In the meantime, a new water-transportation technology had
emerged: lay-flat hoses. As the name suggests, lay-flat hoses are similar
to large fire hoses that lay on the ground. They’re cheaper to use than
underground pipelines, so Equinor began purchasing its water from
other suppliers that used the new technology—this instead of
purchasing its water from Lindale.
Lindale sued Equinor for breach of contract, arguing that
Section 4 gave Lindale the exclusive right to supply water for Equinor’s
fracking operations. Equinor responded that the oil wells for which it
bought outside water were not “on the Pipeline” and thus were outside
the scope of Section 4’s exclusivity clause. The district court deemed
Section 4 ambiguous and submitted the question of its meaning to a jury.
The jury sided with Lindale and awarded it $26 million in damages. On
appeal, Equinor argued that it didn’t breach the exclusivity clause and
that the damages award was excessive in any event. The court of
appeals disagreed with Equinor on both issues and affirmed. We
granted Equinor’s petition for review.

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II
This case turns on whether Equinor’s wells are “on the Pipeline”
such that they fall within the scope of Section 4’s exclusivity clause. * If
a contract is ambiguous, its meaning is a question of fact for a jury to
decide, and “extraneous evidence may be admitted to help determine the
language’s meaning.” Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc.,
590 S.W.3d 471, 480 (Tex. 2019). But if a contract is unambiguous, its
meaning is a question of law that we review de novo. Id. at 479; URI, Inc.
v. Kleberg County, 543 S.W.3d 755, 763–64 (Tex. 2018). In doing so, we
“interpret contract language according to its plain, ordinary, and generally
accepted meaning unless the instrument directs otherwise.” URI, Inc., 543
S.W.3d at 764 (internal quotation marks omitted). Although we’ve said
that our primary goal in contract construction is to “ascertain the true
intentions of the parties,” e.g., Italian Cowboy Partners, Ltd. v.
Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011), this “intent”
is a bit of a legal fiction. We’re really looking for something objective, not
subjective—hence our careful attention to the text of the contract itself.
Assuming for argument’s sake that this is a requirements
contract, Equinor could’ve breached the contract only if the water it
purchased fell within the scope of Section 4. The contract, after all, only
made Lindale “the sole and exclusive water provider and pumper on the

• The parties also dispute whether Section 4 creates a “requirements

contract.” The question of what language creates a requirements contract, as
opposed to an ordinary supply contract, is a complicated one. We haven’t opined
on this issue in over 70 years, see Pace Corp. v. Jackson, 284 S.W.2d 340, 344–46
(Tex. 1955), and have no occasion to do so today. Even if Lindale is right about
Section 4 creating a requirements contract, Lindale would still have to show that
the water sales at issue were within Section 4’s scope.

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Pipeline.” The contract defines the “Pipeline” as the “freshwater
pipeline, lateral lines, related facilities, well-site appurtenances, rights-
of-way, easements, and permits owned by [Equinor].” Equinor notes
that the wells themselves aren’t on this list and argues that, as a result,
the exclusivity clause doesn’t apply to water bought for the wells and
transported through pipes (or lay-flat hoses) other than the Pipeline.
A
As always, we turn to the text. Section 4 is divided into two
clauses: an exclusivity clause and an exception clause. The exclusivity
clause makes Lindale “the sole and exclusive provider and pumper on
the Pipeline.” The exception clause allows Equinor to “use other water
sources or pumpers on the Pipeline” only “in the unlikely event that
Lindale is unable to provide water through the Pipeline for [Equinor].”
Our principal task is to divine the meaning of the phrase “on the
Pipeline,” which is used in both clauses. The parties primarily dispute
the meaning of the word “on” because that meaning determines whether
Lindale is the exclusive supplier of water that flows through the
Pipeline, or the exclusive supplier for wells that are attached to the
Pipeline. Equinor advocates the first view, arguing that “on” indicates
a means of conveyance. On this reading, “on” would most nearly mean
“for” or perhaps “of,” such that Lindale is the provider for only the
Pipeline—not for the lay-flat hoses that don’t connect to the Pipeline.
Lindale counters that “on” means “next to.” On this view, the wells are
“on” the Pipeline because they’re attached to it.
Both parties plausibly invoke dictionary definitions of “on” that
support their respective views. Turning first to dictionaries, the big boys

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agree that “on” has many meanings. The primary meaning is to indicate
that one thing is atop another thing. See, e.g., On, Merriam-Webster’s
Collegiate Dictionary (11th ed. 2020). But as both parties agree, that’s
not what “on” means here. Merriam-Webster’s Collegiate Dictionary
notes that “on” can indicate either a “position in close proximity with” or
a “means of conveyance.” Id. The Oxford English Dictionary likewise
notes that “on” can mean either “[i]n proximity to; close to” or “[w]ithin
the limits or bounds of.” On, The Oxford English Dictionary (2d ed.
1989). In other words, dictionaries support both parties’ views.
Moving on from the dictionaries, then, we find some clues in
sentence structure. The prepositional phrase “on the Pipeline” modifies
the nouns “provider” and “pumper.” This is inconsistent with Lindale’s
argument that the wells are “on the Pipeline” simply because they’re
connected to it. To adopt that logic, we’d have to read into the exclusivity
clause an additional noun such as “oil wells,” “drilling,” or “operations”
for the prepositional phrase to then modify. On that view, the exclusivity
clause would read: Lindale is the “exclusive water provider and pumper
[for oil wells] on the Pipeline.” We decline this latest invitation to blue-
pencil words into the contract. See Am. Midstream (Ala. Intrastate), LLC
v. Rainbow Energy Mktg. Corp., 714 S.W.3d 572, 574 (Tex. 2025).
Turning to the exception clause, we note that it uses the word
“through” somewhat synonymously with the word “on.” The clause states
that if “Lindale is unable to provide water through the Pipeline,” then
Equinor may “use other water sources or pumpers on the Pipeline.” In
other words, the function of a pumper “on the Pipeline” is to get “water
through the Pipeline,” not to pump water into conduits next to the Pipeline.

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The contract’s definition of “Pipeline” doesn’t change this
conclusion. The “Pipeline” is defined as the “freshwater pipeline, lateral
lines, related facilities, well-site appurtenances, rights-of-way,
easements, and permits owned by [Equinor] as of the date of this
Agreement, including without limitation, those described and shown on
[the map] attached hereto.” The Pipeline thus consists of the enumerated
components that are “described and shown on” a map attached as an
exhibit to the contract. That map shows not only the lateral lines, well-site
appurtenances, and other enumerated components of the Pipeline, but also
the then-existing oil wells. Lindale argues that, as a result, the exclusivity
clause incorporates the map—and hence the oil wells—by reference.
An attached exhibit may provide relevant context for interpreting
the contract’s text. See Occidental Permian, Ltd. v. Citation 2002 Inv. LLC,
689 S.W.3d 899, 905 (Tex. 2024). And where that exhibit is expressly
incorporated by reference, it becomes a valid and enforceable part of the
contract. In re D. Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006).
That said, the map spread before us doesn’t make the oil wells
part of the Pipeline. The contract incorporates the map by defining the
Pipeline to include the enumerated components “described and shown
on [the map] attached hereto.” By the contract’s plain terms, the map
only describes the enumerated components of the Pipeline; it doesn’t
purport to expand that list. And given that the oil wells aren’t on the
list, it’s immaterial that the map depicts them. After all, an exhibit is
enforceable as part of a contract only to the extent it’s incorporated by
reference—that is, the incorporation language determines the exhibit’s
effect. And here, that effect was only a visual description.

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We conclude that, under the plain text of the contract, the oil
wells are outside the scope of the exclusivity clause. As such, Equinor
was free to purchase water for the wells from third parties without
breaching Section 4 of its contract with Lindale.
B
Because the contract’s text is unambiguous, we need not—and
should not—go any further. We therefore reject Lindale’s purposivist
arguments about what it wishes had been written in the contract it signed.
First, Lindale improperly relies on a statement of purpose in the
contract to distort its terms. The introductory section states that the
purpose of the Pipeline is “to provide water for drilling, completion and
production operations.” Lindale argues that this purpose requires providing
water to the wells themselves, not just to the enumerated components of
the Pipeline. That may be true, but we’d care about the purpose of the
contract only if Section 4 were ambiguous. It’s not, so we don’t.
Relatedly, Equinor objects to the district court’s decision to allow
testimony about the parties’ course of performance (specifically, that
Equinor had bought water for its wells from Lindale for the first several
years of the contract’s term). Equinor is correct that courts can’t
consider course-of-performance evidence to interpret an unambiguous
contract. Burlington Res. Oil & Gas Co. v. Tex. Crude Energy, LLC, 573
S.W.3d 198, 206 (Tex. 2019). But the problem isn’t that the district court
allowed the jury to hear improper evidence—it’s that the court allowed the
jury to interpret an unambiguous contract at all.
Ironically, Equinor also points to extrinsic evidence of usage to
argue that the wells aren’t on the Pipeline. At oral argument, Equinor

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noted that a third-party company pumps the water from the pumphouse
down into the wells to fracture the shale. So Lindale only pumps the
water until it gets to the well site (that is, the surface of the ground
surrounding the well), at which point another company pumps the water
from the surface down into the well. We decline to consider any extrinsic
evidence of usage, regardless of which party offers it.
Second, Lindale argues that it wouldn’t have agreed to the
contract if the exclusivity clause didn’t include the water used for the
wells themselves. Lindale also argues in its brief that excluding the wells
from the definition of the Pipeline would be “inequitable” because the
contract “required Lindale make a $1.2 million initial capital investment
to make the Pipeline operable and then continue to pay to maintain the
Pipeline, all while providing below-market pricing to Equinor.”
Lindale points us to loose language from our opinion in Frost
National Bank v. L&F Distributors, Ltd., where we said that we
“construe contracts from a utilitarian standpoint bearing in mind the
particular business activity sought to be served and will avoid when
possible and proper a construction which is unreasonable, inequitable,
and oppressive.” 165 S.W.3d 310, 312 (Tex. 2005) (per curiam) (internal
quotation marks omitted). But we think Lindale takes Frost National
Bank too far. We do indeed interpret words according to how an
ordinary user of the English language would understand them, and
doing so does entail concepts like reasonability and the presumption
against absurdity. But we have no business rescuing parties from
contracts that turned out to be bad deals in the name of utilitarianism
or equity. Our job is to read the words chosen by the contracting parties.

9
“As we have said time and again, courts may not rewrite a contract
under the guise of interpretation.” Sundown Energy LP v. HJSA No. 3,
L.P., 622 S.W.3d 884, 889 (Tex. 2021) (per curiam).
Perhaps Lindale understood the contract to make it the exclusive
provider of water to the wells, not just of water on the Pipeline. But the
contract didn’t say that. We’ve repeatedly emphasized that the
“principle of freedom of contract requires us to recognize that
sophisticated parties have broad latitude in defining the terms of their
business relationship, and courts are obliged to enforce the parties’
bargain according to its terms.” Id. (internal quotation marks omitted).
If Lindale wanted the exclusive right to provide water to the wells, then
it was perfectly free to refuse the contract as drafted and to propose
alternative language. But cf. The Godfather (Paramount Pictures 1972)
(describing offers that, unlike the one here, can’t be refused).
III
We hold that, as a matter of law, Equinor didn’t breach its
contract with Lindale. Because the interpretation of an unambiguous
contract is a question of law, the district court erred in submitting that
question to the jury. That dispositive error makes it unnecessary to
consider damages. We reverse the judgment of the court of appeals and
render judgment for Equinor.

James P. Sullivan
Justice

OPINION DELIVERED: March 13, 2026

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