In re: EP Energy E&P Company, LP considered three lease maintenance provisions in several oil and gas leases. The federal district court ruled that the leases were maintained in force after cessation of production despite creative (some would say “strained”) lease interpretations by a group of lessors. In sum, the court deemed
Co-author Brittany BlakeySometimes writing too many alternatives into an oil and gas lease invites confusion … which provokes litigation … which results in disappointment for somebody … or everybody.
For example, the central issue in Vermillion FC, LP v. 1776 Energy Partners, LLC was the effect of a well-tract designation pursuant to a retained
Co-author Rusty TuckerYesterday we discussed aspects of PPC Acquisition Co., LLC, et al. v. Delaware Basin Res., LLC, et al. Today we consider whether the retained-acreage clauses created a special limitation or a covenant and the relationship between the clauses and Field Rules in place at several different times. Did Field Rules establishing 640-acre units expand acreage each lessee could retain? (The clauses are highlighted in the opinion and facts are in yesterday’s post.)
What’s the difference?
Continue Reading Texas Court Parses Three Retained-Acreage Clauses – Part 2
Co-author Rusty TuckerPPC Acquisition Co., LLC, et al. v. Delaware Basin Res., LLC, et al. addressed retained acreage clauses in three separate oil and gas leases covering the same 640-acre tract in Reeves County, Texas.
Did the lessees hold acreage under the leases based on one producing well, the Colt #1 that was completed in 2003? OR, did the lessees’ failure to drill additional wells, re-classification of the well from gas to oil, and failure to timely file a RRC Form P-15 with a limited acreage designation terminate the leases for all or part of the acreage?
The facts
Continue Reading Texas Court Parses Three Retained-Acreage Clauses – Part 1
Co-author Chance DeckerThe Texas Supreme Court has agreed to hear oral arguments in a dispute over an “accumulation” provision in a continuous development clause of an oil and gas lease. The case is Endeavor Energy Resources L.P. v. Energen Resources Corp. et al. Here’s the language:
…this lease shall terminate … [150] days
Co-author Chance DeckerYou’ve seen the headlines. The portrait is complete; the verdict is in; the clock has run down to zero. The devastation of Harvey is “unprecedented” and it’s all because of climate change. That’s not necessarily so, thanks to Powerline and Dr. Roy Spencer. Read it and reach your own conclusion.
And now, on to the the law
Apache Deepwater, LLC v. Double Eagle Development, LLC asked whether a retained acreage clause provided for “rolling terminations” after the primary term or “snapshot termination”. As you might expect, the result depended on the language of the lease.
Continue Reading Harvey and Climate Change, and Consideration of a Retained Acreage Clause
Have you ever wondered about the original purpose of the retained acreage clause? According to Professor Kramer, it was “to prevent the lessee from losing those portions of a lease that had productive wells thereon if the rest of the lease terminated”. The term