12 Oct Harvey and Environment Modification, and Factor to consider of a Kept Acreage Provision
Co-author Chance Decker
You have actually seen the headings. The picture is total; the decision remains in; the clock has actually diminished to absolutely no. The destruction of Harvey is “extraordinary” and it’s all since of environment modification. That’s not always so, thanks to Powerline and Dr. Roy Spencer. Read it and reach your very own conclusion.
And now, on to the the law
Apache Deepwater, LLC v. Double Eagle Development, LLC asked whether a maintained acreage stipulation attended to “rolling terminations” after the main term or “picture termination”. As you may anticipate, the outcome depended upon the language of the lease.
Apache’s predecessor rented a 640 acre system in Regan County, Texas. The lease was divided into 4 160 acre proration systems. Each system had one producing well at the end of the main term; 3 of the wells ultimately stopped to produce.
Double Eagle took a lease covering the 3 non-producing systems and required Apache to perform releases. Apache declined, competing production from the one well in the producing system held the whole 640 acre system. Lawsuits took place.
The core of the disagreement was the interaction in between the habendum and maintained acreage provisions. The habendum stipulation was basic:
TO HAVE AND TO HOLD … for a regard to 3 (3) years … and as long afterwards as oil, gas or other hydrocarbons … are produced …
The maintained acreage stipulation:
Regardless of anything to the contrary in the foregoing, Lessee covenants to launch this lease after the main term other than regarding each producing well on stated lease, operations for which were begun prior to or at the end of the main term and the proration systems as might be assigned to stated wells …
Apache competed this stipulation attended to “picture termination”– i.e., a single point-in-time examination at the end of the main term regarding whether each proration system was kept. Due to the fact that each of the 4 proration systems had a producing well in it on that date, the maintained acreage stipulation did not use.
Double Eagle competed the stipulation was for “rolling terminations”. The lease would end regarding any proration system that did not have a producing well or constant operations causing a producing well within it at any time after the expiration of the main term
Check out the words of the file
The picture dominated. The habendum stipulation unambiguously supplied the whole 640 acre system would be held by production from any well within its borders. For the maintained acreage stipulation to customize the habendum stipulation and offer rolling terminations, it needed to include “clear, accurate, and indisputable language” revealing a “clear intent” to do so. That stipulation had no such language.
Though the maintained acreage stipulation enabled the lessor to require a release at any time “after the main term”, not “at the expiration of the main term,” it still restricted Apache’s release commitment to acreage not within a proration system with a producing well or constant operations “ prior to or at the end of the main term.” Hence, it did not include “clear, accurate, and indisputable” language offering rolling terminations.