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Oil & Gas Matching
Implied Covenants- To protect against drainage; Lessor must prove
1. Substantial drainage, 2. Lessee could drill a profitable well to offset drainage, and 3. Damages
Interference with Oil and Gas Interests- Trespass; Geophysical or seismic trespass: Remedy
Sue in assumpsit (Market value of K for right to do seismic exploration)
Divided Ownership- Concurrent ownership; Cotenancy: Partition
Cotenant has absolute right to partition property in a judicial proceeding; Ct favor partition in kind (dividing property) over partition by sale, unless dividing property is inequitable
Interference with Oil and Gas Interests- Adverse possession
WY rules of adverse possession apply to oil and gas interests; Key: Whether and when mineral estate was severed from surface estate; Exam- Key: Whether trespasser started adversely possessing severed or unsevered tract
Oil and Gas Lease- Habendum clause; Temporary cessation doctrine
Once PPQ established, temporary cessation due to "sudden stoppage of well or some mechanical breakdown or like" will not terminate lease
Oil and Gas Lease- Defensive or "saving" clause; Dry hole, continuous operations, and cessation of production clause: Tack savings clauses
Lessess can tack their savings clause together over time
Oil and Gas Lease- Delay rental clause; Late delay rentals: Required proof
1. An act by Lessor (cashing check), 2. Upon which Lessee has detrimentally relied
Divided Ownership- Concurrent ownership; Cotenancy
Every cotenant can drill and produce or lease his undivided interest w/o consent of cotenants, but cannot exclude other cotenants; Must account to others for their rightful share of profits from production
Interference with Oil and Gas Interests- Trespass; Slant well drilling
Bottoming well underneath someone else's tract
Oil and Gas Lease- Pooling clause; Pugh clause
If only part of leased acreage is pooled the rest should be severed unless lessee drills or pay delay rentals on remainder
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