Opinion ID: 1784269
Heading Depth: 1
Heading Rank: 4

Heading: The Adjacent Lands Clause In the Connell Lease

Text: The granting clause of a mineral lease describes the purpose of the lease and specifies the uses of the land authorized for the lessee to accomplish the overall purpose. Leger v. Petroleum Engineers, Inc., 499 So.2d 953, 955 (La.App. 3d Cir.1986). In the present case, the granting clause authorized the lessee both (1) to conduct mineral operations on the leased premises for the production of oil and gas, and (2) to use the leased premises in connection with mineral operations conducted both on the leased premises and on adjacent lands. [5] These grants were supported by various considerations, including the mineral development of the lessors' property. Plaintiffs first contend that the quoted language refers only to adjacent lands also owned by the same lessor. Plaintiffs would thus have us interpret the adjacent lands clause as a cover-all or Mother Hubbard clause, the purpose of which is to protect the lessee in the event that the description fails to include adjacent lands owned by the lessor. McDougal, supra, at § 3.4 at 117. The Connell lease in fact contains a Mother Hubbard clause, [6] which is distinct from the adjacent lands clause contained in the quoted paragraph. The Mother Hubbard clause in the Connell lease provides in pertinent part that the lease also covers and includes battures, accretions and all other land owned by Lessor adjacent to the land particularly described above. (emphasis added). In contrast, the adjacent lands clause refers to operations conducted on the leased land or on any adjacent lands, regardless of whether the adjacent land is owned by the lessor. Plaintiffs further argue that even if the adjacent lands clause is construed to permit a mineral lessee to use the surface of the leased premises to obtain access for the lessee's operations on adjoining lands not owned by the lessors, the clause should only apply to a lessee who is also the lease operator. Plaintiffs contend that allowing a non-operator co-lessee (such as Kelley) to use the surface was not intended by the parties to the lease contract and is not a reasonable interpretation of the provision. Under plaintiffs' interpretation, the adjacent lands clause apparently would only apply when a lessee is the operator of record on both tracts. Such a constrained interpretation would render the adjacent lands clause virtually without effect. See La. Civ.Code art. 2049. Moreover, under the Connell lease, the operations by Sonat, as operator, or Kelley, as co-lessee, are indistinguishable from one another as to their lessors. See La.Rev.Stat. 31:130 (a partial assignment or partial sublease does not divide a mineral lease); La.Rev.Stat. 31:168 (mineral rights are susceptible of ownership in indivision); La.Rev.Stat. 31:174 (a use or possession of a mineral right inures to the benefit of all co-owners of the right); La.Rev.Stat. 31:177 (prohibiting operation without consent of all coowners to a mineral lease except in limited circumstances). See also La.Rev.Stat. 31:131, Comment (rule that mineral lessor must accept performance by assignee or sublessee stems from the belief that the lessor's basic concern is that the obligations of the lease be properly performed and that as long as performance is being rendered, [lessor] has no major interest in who is rendering it.) Thus all co-lessees must consent to mineral operations on the leased property, and while one co-lessor frequently is deemed to be the operator, all co-lessees generally share in the benefits and the costs of the operation. Accordingly, we conclude that the fact that Kelley is a co-lessee is more appropriate for consideration as a factor in weighing whether Kelley's use of the surface of the leased premises for conducting operations on adjacent lands is reasonable within the contemplation of the requirement in Article 11 that the lessee exercise its rights with reasonable regard for the rights of the lessor.