Ambiguity is handy for office-seekers intending to walk back “promises” they later say they really didn’t make. It doesn’t work so well for the stability of land titles. In Thagard Mineral Partnership, LP v. Cass v. RIM, LLP, a Texas court of appeals resolved a dispute over whether vague exhibits in
Co-author Skyler StuckeyIn Endeavor Energy Resources, L.P. v. Energen Resources Corp. et al. the Supreme Court of Texas construed a continuous development clause in an oil and gas lease covering 11,300 acres in Howard County. After the primary term, lessee Endeavor could retain acreage by drilling a new well every 150 days. The clause gave Endeavor “ … the right to accumulate unused days in any 150-day term during the continuous development program in order to extend the next allowed 150-day term between the completion of one well and the driling of a subsequent well.
After the primary term, Endeavor drilled 12 wells that extended the lease. Endeavor began drilling a 13th well 320 days after completing the preceding well. In the ensuing period Energen top-leased the supposedly non-retained parcels. Litigation ensued.
The dispute focused on how to calculate the number of “unused days”. Endeavor argued that it could carry forward unused days across multiple 150-day terms. Energen argued that unused days in any given 150-day term could be carried forward only once, to the next term.
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