Texas Supreme Court’s “Produced Water” Ruling: What led up to it—and what it means on the ground for ranchers

A first-of-its-kind ruling puts “produced water” in operators’ hands by default—reshaping leases, liability, and reuse prospects for Texas ranchers.

The Texas Supreme Court has handed down a first-of-its-kind ruling on who owns “produced water,” the salty, often contaminated fluid that comes up with oil and gas. In Cactus Water Services, LLC v. COG Operating, LLC, decided June 27, 2025, the Court held that produced water is oil-and-gas waste and, when leases are silent, it belongs to the mineral lessee—the operator—not the surface owner. The opinion, authored for a unanimous court, resolves years of uncertainty and instantly reshapes bargaining leverage on ranches across the Permian and beyond.