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the advanced minimum royalty payments were in holding the lease, it was a moot issue as the lease was clearly held beyond its primary term under the first two analyses. 5 The court also briefly touched on the issue of notice, which warrants discussion here.The Lessor claimed it satisfied the notice requirement in the lease, yet the court pointed out that the lease required written notice while the Lessor verbally raised its concerns with the Lessee’s land team. While the court found this issue irrelevant since the lease was held by pooling, the court could have found notice was not met as the Lessor’s verbal notice did not comply with the lease terms (i.e. written notice). The bottom line in Northwood is that the lease terms prevail, and pooling is unlikely to be considered in bad faith if the pooling 6 complies with the mutually agreed upon lease terms.Thus, all parties should be aware of how lease terms can and will impact their assets now and beyond the primary term.
Andrew Good Partner, Columbus agood@oglawyers.com
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5 Id. at 1258. 6 Id. at 1259.
Unanimous Oklahoma Supreme Court Answers:
When does an oil and gas lease expire due to cessation of production? By: Jake Krattiger and Rhyder M. Jolliff
Oklahoma
The Oklahoma Supreme Court recently answered two hotly contested energy issues: when does an oil and gas lease expire due to cessation of production, and how must courts
2) Termination is not judged solely by the lease’s stated time period; and 3) Oklahoma’s strong public policy against estate forfeiture provides a grace period for protecting leasehold interests. In Tres C, LLC v. Raker Resources, LLC, Continental Resources, Inc., and Dewblaine Energy, LLC , 2023 OK 13, the Court granted certiorari to decide whether the trial judge erred by holding that a lease expires by its
apply a lease’s habendum clause? The unanimous Court explained: 1) Cessation of production can be
determined only after a reasonable period based on all economic circumstances to decide if the well can no longer produce in paying quantities;
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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