Co-author Brittany Blakey
The takeaway from Hahn v. ConocoPhillips Company is that in Texas a NPRI holder may not diminish his rights by ratifying pooling of an oil and gas lease unless there are provisions explicitly purporting to do so.
Kenneth and brother George each owned ½ of the surface estate of a tract and
The question in Kim R. Smith Logging Inc. v. Indigo Minerals LLC was whether a disgruntled Louisiana royalty owner sent its demand for unpaid royalties to the right party. It turns out that it did.
Mineral interest owner Cherry executed an oil and gas lease. Plaintiff Smith Logging purchased the property and Cherry retained
Let’s proceed directly to the takeaways from Fort Apache Energy, Inc. v. Short OG III, Ltd., et al, a Southern District of Texas bankruptcy district court opinion. (Gray Reed partners Jim Ormiston, Gabe Vick and Kristen Kelly represented Short OG III)
The other guy’s operations will not extend your lease beyond the primary
Co-author Trevor LawhornIf you have ever wondered how many ways a cocktail of stupidity*, treachery and feckless government can inflict financial harm on the undeserving, including the citizens the feckless government leaders are supposed to serve, see City of Dallas v. Trinity E. Energy, LLC.
Facts
In 2008 during the Barnett Shale drilling boom
Co-author Trevor LawhornSM Energy Co. v. Union Pac. R.R. Co. considers a question frequently asked in Texas suits affecting title: When is a suit a trespass to try title action and not a declaratory judgment action?
The dispute
SM Energy and Union Pacific are parties to three oil and gas leases covering lands in
Co-author Brittany BlakeyRecall our recent post on Carl v. Hilcorp Energy Company from the U.S. District Court for the Southern District of Texas discussing the lessee’s royalty obligations on gas used off the premises in a market-value lease. See now, Fitzgerald v. Apache Corporation: Different judge; same district; similar facts, lease provisions
Co-author Brittany BlakeyThe question is presented again but in a different format: In Texas is a lessee allowed to deduct post-production costs (PPC’s) from the lessor’s gas royalty? In Carl v. Hilcorp, the answer was “yes” based on the language in the oil and gas lease at issue. The question was for gas
Co-author Carolina Cuppetilli*Today we will skip our usual routine of explaining how court rulings on the question of the day might affect your interests. Instead we will discuss the fallout from abysmal document drafting. In Rosetta Resources Operating v. Martin, the Supreme Court of Texas cautioned that an express covenant to protect against
Co-author David LeonardIf perpetuation of a mineral lease beyond the primary term is contingent upon continuous operations, do traditional notions of “production in paying quantities” always matter? Spoiler: No.
In Thistle Creek Ranch, LLC v. Ironroc Energy Partners, LLC, an appellate court affirmed partial summary judgment in favor of lessee Ironroc Energy Partners under these odd clauses in the Kettler lease.
The habendum clause:
Unless sooner terminated … this lease shall remain in force for a term of three (3) years from the date hereof, hereinafter called “primary term,” and as long thereafter as operations, hereinafter defined, are conducted upon said land with no cessation for more than ninety (90) consecutive days.
The lease defined “operations” as:
“ … any of the following: drilling, testing, completing, reworking, recompleting, deepening, plugging back or repairing of a well in search for or in any endeavor to obtain production of oil [or] gas, … production of oil [or] gas, … whether or not in paying quantities.
The oddity, of course, is that the lease could be perpetuated by operations, whether or not there was production in paying quantities.
Continue Reading Lease Perpetuated Beyond Primary Term Without Production in Paying Quantities
Co-author Julia EdwardsThis “most-favored-nations” clause in three oil and gas leases on land in LaSalle County, Texas, was at issue in EP Energy E&P Co., L.P. v. Storey Minerals, Ltd.:
If … the lessee … acquires an Oil and Gas Lease [on certain lands] on such terms that the … bonus … [is] greater than th[at] provided to be paid to lessor hereunder, lessee … agrees that it will execute an amendment to this lease, effective as of the date of the third party lease on the leased premises, to provide that the lessor hereunder shall receive thereafter the same percentage (per net mineral acre) … bonus … as any subsequent lessor of the leased premises to the extent that such … bonus … [is] greater than those provided to be paid herein. … “
In the end, as a result of lessee EP’s subsequent leases lessors (MSP) were entitled to increased bonuses on leases from the time prior to execution of the triggering lease. Once again, a court applied the plain, ordinary, and generally accepted meaning of the contract.
Continue Reading Most-Favored-Nations Clause Costs Lessee