The Collins mineral lease covers 1131.5 acres in Bienville Parish spread across 10 semi-contiguous tracts.
The lease
Provision 6 of the form lease provides: In the event of cessation of production for any cause following expiration of the primary term, the lessee would be entitled to continue the lease in force by restoring production
There are specific requirements for proving that an oil and gas lease has survived past its primary term. Fail to hit them all when the lease is challenged at the courthouse, and disappointment will be order of the day.
The heart of the dispute in J&L Oil Company v. KM Oil Company was whether plaintiff J&L satisfied the requirements of a Pugh clause in a 1951 lease. J&L sued KM for impinging upon J&L’s lease on 55 acres in Caddo Parish, Louisiana. Summary judgment in favor of KM, the alleged impinger, was affirmed.
Continue Reading Lack of Proof Dooms Pugh Clause Defense