Navasota Resources, L.P. v. First Source Texas, Inc., First Source Gas, LP, Gastar Exploration Texas, LLC F/K/A Bossier Basin, LLC, First Texas Gas, LP, First Source Bossier LLC, Gastar Exploration, LTD., Chesapeake Energy Corp., Chesapeake Exploration LP & Chesapeake Operating. Inc
Navasota Resources, L.P. initiated a lawsuit to enforce a preferential right clause within a joint operating agreement with First Source Texas, Inc. and related entities concerning oil and gas interests. The trial court granted summary judgment for First Source and Chesapeake Energy Corp., denying Navasota's motion. On appeal, the court examined whether the preferential right was triggered by a multi-asset 'package deal' and if Navasota was obligated to accept all additional terms. The appellate court determined that the preferential right was indeed invoked, and Navasota was not required to agree to unrelated conditions like stock purchases or entry into an Area of Mutual Interest. Consequently, the court found a binding contract was formed, the preferential right provision was not an unreasonable restraint on alienation, and rejected defenses of mistake or unconscionability. The judgment of the trial court was reversed, with judgment rendered in favor of Navasota for breach of contract and specific performance, and the case was remanded for determination of attorney's fees and revenues.