Political actions have consequences. A force majeure clause in New York oil and gas leases does not modify the primary term of the habendum clause and the leases are not extended because of the state ban “moratorium” on hydraulic fracturing.
We recently discussed failure to produce in paying quantities. Another decision involving the same lessee had a different result. Why?
The question in both cases was whether the well was capable of producing in paying quantities and whether a reasonably prudent operator would continue to operate the well.
In the new
What is your guiding principle when writing agreements?
“The more the words the less the meaning, and how does that profit anyone?” Ecclesiastes 6:11.
or
“The beginning of wisdom is the definition of terms.” Socrates
The Legal Issue
A lease grants “a perpetual, cost-free (except only its portion of production taxes) overriding royalty of five
One consequence of falling oil prices is leases that cease to produce in paying quantities. The producer’s question: How soon must the well return to profitability? The answer in BP American Production Company v. Laddex, Ltd. is, a “reasonable” period, to be determined by the jury and not the judge.
The Magic Well
The
Whoa! I didn’t see this one coming. Pennsylvania lessees are not entitled to an equitable extension of the primary term of an oil and gas lease in the face of a legal challenge to the validity of the lease.
Half way during the primary term of a five-year lease, lessors the Harrisons sued Cabot in
Co-Author Brooke SizerWhat must a Louisiana lessee do to avoid statutory penalties for non-payment of royalty, and what must a royalty owner do to put the lessee on notice that royalties are not being paid? The answers are, more than the lessee did in Samson Contour Energy E&P, LLC v. Smith and less than
You are negotiating to take a big oil and gas lease. The run sheets show you are dealing with an executive right owner on behalf of himself and his NPRI owner. His proposed terms are odd: a lower-than-market royalty and a higher-than-market bonus. After reflecting, you get it: The terms aren’t odd; they are just
The duty owed by the executive right holder to its non-participating royalty interest holder in Texas, long haunted by the ghost of Clinton Manges, is again examined. From KCM Financial, et al. v. Bradshaw and its precursors …
We Know This:
Co-author Sandra L. Mazan
It s been said that if you don’t ask for what you want you’ll get what you deserve. Mr. Hooks took that truism to heart.
Hooks v. Samson is about more than the discovery rule (See last week). Here are the other claims at issue:
Most Favored Nations Clause
Co-author Sandra L. MazanThe Texas Supreme Court – that elephants’ graveyard of claims and causes of action – has sided with a lessor-plaintiff who relied on the discovery rule to defeat a limitations defense. For the many with low expectations when the court agreed to review this case, this result is a welcomed surprise.