Co-author Brittany Blakey

Yowell v. Granite Op. Co. and Apache Corp. v. Peyton Royalties, L.P. is another Rule Against Perpetuities case. Keep reading. The anti-washout protection for your reserved overriding royalty could be at risk.

The court of appeals (on remand from the Supreme Court) determined that a reserved overriding royalty interest in an oil and gas lease may be reformed under section 5.043 of the Texas Property Code to comply with the Rule.
Continue Reading Texas Court Addresses Anti-Washout Clause and Rule Against Perpetuities

Co-author Chance Decker

Is an overriding royalty interest lasting beyond the term of a lease-now-in-effect impossible to create?  You saw the recent Texas Supreme Court opinion invalidating an anti-washout clause in TRO-X v. Anadarko Petroleum Corp. Now, you see Tommy Yowell et al v. Granite Operating Company et al.  In light of these opinions one could wonder if an override is as valuable a tool in an oil and gas trade as it used to be.

An assault on overrides?
Continue Reading Anti-Washout Clause Defeated by the Rule Against Perpetuities

Co-author Trenton Patterson*

We’re not saying you should do it, but there is a recipe for ridding oil and gas leases of pesky burdens: Enter into a new lease covering the same interest as the earlier lease and omit any reference to an intent that the later be subordinate to the earlier. You don’t even have to release the earlier lease. So says TRO-X, L.P. v. Anadarko Petroleum Corp.

You might remember a report on this case at the court of appeal, where we marveled at the skillful (or fortuitous, we’ll never know) way the Anadarko landman won the day via email.
Continue Reading Texas Supreme Court Affirms Washout of a Back–in Interest