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High court hears dispute over whether cotenant production can perpetuate oil-and-gas leases
Summary
The Supreme Court of Texas heard argument in Cromwell v. Anadarko E & P Onshore (No. 230927) over whether production by a cotenant can sustain a paid-up oil-and-gas lease past the primary term even if the lessee did not drill.
The Supreme Court of Texas heard oral argument in 230927, Cromwell v. Anadarko E & P Onshore, a dispute over whether a lessee who did not itself drill wells may hold a paid-up oil-and-gas lease past the primary term when production occurs on the leased acreage by a cotenant or a later lessee. Petitioner (Cromwell) argued his leases contemplate production without requiring the lessee personally to drill; respondent (Anadarko) countered that longstanding precedent and lease purpose require the lessee to take affirmative steps to produce or cause production.
The case centers on interpreting treaty-like lease clauses (the habendum and granting clauses), the meaning of passive-voice "is produced" language, and whether…
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