Opinion ID: 1784269
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Heading: The Adjacent Lands Clause In General

Text: In the absence of a violation of law or public policy, the mineral lease constitutes the law between the parties and regulates their respective rights and obligations. Frey v. Amoco Production Co., 603 So.2d 166, 172 (La.1992). See also La.Rev.Stat. 31:3. Mineral leases are construed as leases generally, and the provisions of the Civil Code applicable to ordinary leases, when pertinent, are applied to mineral leases. Frey, 603 So.2d at 171. Therefore, when the words of a mineral lease are clear and explicit and do not lead to absurd consequences, a court may not make further interpretation in search of the parties' intent. See La. Civ.Code art. 2046. Although the granting of a mineral lease does not convey any title to the surface of the land, it is common for a mineral lease to expressly grant the lessee the right to undertake certain activities on the surface. Luther L. McDougal, Louisiana Oil and Gas Law § 3.4 at 119 (1991). Even in the absence of a clause setting forth the types of surface activities the lessee may engage in on the leased premises, the lessee has an implied right to use the surface to the extent `reasonably necessary' to explore for and drill oil and gas wells. Id. at 119a (footnote omitted). See also La.Rev.Stat. 31:119 (mineral lessor is bound to refrain from disturbing the lessee's possession); Broussard v. Northcott Exploration Co., Inc., 481 So.2d 125 (La.1986) (mineral lessee must reasonably exercise its rights under mineral lease); Rohner v. Austral Oil Exploration Co., 104 So.2d 253 (La. App. 1st Cir.1958) (recognizing mineral lessee's implied right to use an area of the surface which is reasonably necessary to undertake certain works, including building roads for ingress and egress); Leger v. Petroleum Engineers, Inc., 499 So.2d 953 (La.App. 3d Cir.1986) (mineral lease impliedly authorized lessee to undertake subsurface injection of waste salt water attributable to production from other wells on leased premises). An adjacent lands clause in a mineral lease goes a step further by providing expressly that the lessee may use the surface of the leased premises to conduct operations on adjacent land which is not owned by the lessee. Numerous commentators have recognized the validity of a contractual clause granting easements or surface rights in the leased property in connection with operations on other premises. See, e.g., Douglas Gross, What Constitutes Reasonably Necessary Use of the Surface of the Leasehold By A Mineral Owner, Lessee, or Driller Under an Oil and Gas Lease or Drilling Contract, 53 A.L.R.3d 16 §§ 8(a) & 8(b) (1974); 1 Eugene Kuntz, Law of Oil and Gas § 3.2 (1987 & Supp.1999); 1 Patrick H. Martin & Bruce M. Kramer, Williams & Meyers Oil and Gas Law § 218.4 (1998); Hamilton E. McRae, Granting Clauses in Oil and Gas Leases: Including Mother Hubbard Clauses, 2 Inst. On Oil & Gas L. & Tax'n 43 (1951). An adjacent lands clause, although constituting a significant burden on the leased premises, promotes the efficient development of oil and gas fields and the state's public policy of developing mineral resources. The clause was intended to permit a lessee to develop an oil and gas field without regard to property lines and without the necessity of constructing duplicative roads, pipelines, tank farms and other facilities. However, the clause is limited to the term of the lease which continues in effect, after the delay rental period, only as long as there is production in paying quantities on the leased premises. Thus a mineral lessee cannot use the adjacent lands clause for access to operations on other premises unless the basic lease is being maintained by payment of delay rentals or by production. [4] As one early commentator observed, [T]he use of the leased premises in connection with other operations in the same area can in many instances accomplish more efficient and economical operation. McRae, supra at 57. Moreover, the adjacent lands clause, widely used in mineral leases for many years, resolves the impracticality for a mineral lessee to determine in advance which tracts of land will share in the production from a specific well, or whether a specific well will be productive, or whether the leased premises subject to the adjacent lands clause subsequently will be pooled or unitized with producing wells on the adjacent lands. When there are adjacent lands clauses in the leases of several tracts in a field, there is a potential benefit to all lessors, and the fact that one or more particular lessors ultimately do not receive any specific benefits from the lessee's use of the surface of the leased premises to conduct operations on adjacent lands does not affect the validity of the contractual provision.