Other than say, $8.00 crude, the recent national election, or a top-five recruiting class by your most-reviled gridiron enemies, few events are as likely to work an operator into a worst-case-scenario frenzy as a lease termination claim. Lessors love ‘em, of course! The question of the day: In a head-to-head contest between a Louisiana statute and language… Continue Reading
Category Archives: Lease Disputes
Subscribe to Lease Disputes RSS FeedMineral Lessors Introduced to Commercial Paper
Posted in Lease DisputesBy Jonathan Nowlin The difference between a “draft” and a “check” is explained in Jackson v. Pride Oil & Gas Properties, Inc., a Louisiana case. To the lessor,they might look and feel the same, but in reality they aren’t. “Draft” is a general term for an instrument that directs one person or entity to pay… Continue Reading
Executive Right Owner Could Be Liable for Failing to Forward Royalty Payments
Posted in Land Titles, Lease Disputes, LitigationThe ghosts of Clinton Manges and people like him continue to haunt executive right owners in Texas. In the 1980’s, Mr. Manges’ abuse of his non-participating royalty owner inspired the Texas Supreme Court to re-affirm the obligations of an executive right owner to the NPRI owner: “utmost fair dealing” and a fiduciary duty. In Friddle v. Fisher an appellate court… Continue Reading
Royalty Clause Paying Annual Rent Does Not Survive Non-production
Posted in Lease Disputes“How long will you torment me and crush me with words?” Job 19:3. Much like the long-suffering Job, the defendants in Heasley v. KSM Energy, Inc. et al, did not like the words they were hearing. In this case, the words were their own, in the sense that the words were in the oil and gas lease. The… Continue Reading
Exxon and the Miesches – Round Three
Posted in Lease Disputes“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns —… Continue Reading
“We’ll Fill in the Blanks Later” Does Not Make a Contract
Posted in Lease DisputesContract law 101: To have a binding contract there must be an offer and an acceptance. And so it is in oil and gas leasing in Louisiana. Thus, in Ballard v. XTO there was no binding agreement to take a lease. A landowner representing an unknown number of potential lessors… Continue Reading
The Conspiracy That Never Was
Posted in Lease DisputesSponsoring the most paranoid Texas conspiracy theory since the puff of smoke from the grassy knoll, groups of neighborhood associations, homeowners, and businesses sued virtually all of the major Barnett Shale producers over their failure to complete negotiations for oil and gas leases for bonuses of up to $20,000 per acre. Cessation of negotiations - or culmination of the sinister and… Continue Reading
“Paying Quantities” Revisited After 113 Years
Posted in Lease DisputesSurely, the Pennsylvania Supreme Court has been busy since century before last, but apparently not on a lot of oil and gas cases. The court revisited the standard, first established in 1899, for determining whether an oil and gas lease has produced in paying quantities. In T.W. Phillips Gas & Oil Co. v. Jedlicka, the… Continue Reading
“Gotcha. I have a contract!”
Posted in Lease DisputesSo said the lessor-plaintiffs in Walker v. Chesapeake Louisiana, L.P. The lessee-defendant, the trial court, and the court of appeals said “Yes, but . . .”. The lessors accused the lessee of breaching six leases and sought cancellation. The court invoked the doctrine of “judicial control” that allows a court to avoid cancellation when equity requires it. The… Continue Reading