Court Opinion

ID: 5053642
Source: CourtListenerOpinion
Date Created: 2021-10-01 08:21:12.367045+00
Date Added: 2024-06-11T14:13:28.039898
License: Public Domain

I respectfully dissent. I cannot agree with the conclusion of the majority that the oil and gas lease here under consideration did not terminate under its own provisions under the admitted and undisputed facts of this case.
Fundamental among the rules of construction for oil and gas leases is the requirement *Page 51 
that the intention of the parties be ascertained and given effect, and the conclusion reached as to such intention of the parties must be gathered from the four corners of the instrument. Gibson v. Turner, 294 S.W.2d 781, 783 (Tex. 1956).
 " * * * it appears to be the settled rule in this state that of two or more equally reasonable constructions of which the language of an oil and gas lease is susceptible the one more favorable to the lessor will be allowed to prevail." Zeppa v. Houston Oil Co. of Texas, 113 S.W.2d 612, 615 (Tex.Civ.App.-Texarkana 1938, writ refused)
The legal effect of an oil and gas lease should not be determined alone from a single word, or clause or part of the instrument, but from every pertinent part and effect given to all its language. 42 Tex.Jur.2d Oil and Gas § 165, pages 349-50. It is not the form but the substance of the agreement and intent of the parties that is important.
This court said in Jones v. Killingsworth, 379 S.W.2d 362, 367 (Tex.Civ.App.-Tyler 1964, reversed on other grounds, 403 S.W.2d 325
(Tex. 1965)) that it is the duty of the court to ascertain the intention of the parties, according each provision its reasonable, natural and probable meaning when considered in relation to the entire lease.
It is my view that it was the intention of the parties in making the subject lease that the lease would remain in force for a ten year primary term, and as long thereafter as oil, gas and other mineral are produced, or if production of oil, gas and other minerals ceased, then so long thereafter as lessee shall conduct drilling or reworking operations thereon with no cessation of such operations for more than sixty days. The result of such an intention would cause the lease to continue in force after the expiration of the primary term provided there was production, but if there was no production, then the lessee would have sixty days in which to commence drilling or reworking operations, or failing to do so, the lease would terminate. The only time limitation placed upon drilling or reworking was that there could not be a cessation of such operations for more than sixty days unless production was restored.
I do not agree that the lessee had "a reasonable time" after production ceased to commence drilling or reworking operations; to the contrary the parties agreed that the lessee had sixty days to begin such operations after production ceased. It is my view that the parties had also agreed that sixty days was to be the extent of any temporary cessation of production inasmuch as lessee was obligated to begin drilling or reworking operations within sixty days after production ceased, or the lease would terminate. The lease expired not because there was a permanent cessation of production but because of the failure of the lessee to comply with the terms of the lease. Woodson Oil Co. v. Pruett, 281 S.W.2d 159, 162 (Tex.Civ.App.-San Antonio 1955, writ ref'd n. r. e.)
In the Pruett case the court said:
 "Appellants next contend that the cessation of production on the lease was sudden and only temporary, and that under such circumstances they were entitled to a reasonable time in which to remedy the defect and resume production. This might be true under the terms of some leases, but under the lease here the parties agreed and stipulated what would constitute temporary cessation. The lease provides, in effect, that if production should cease the lessee must commence re-working or additional operations within sixty days or the lease would terminate. If the cessation of production is more than sixty consecutive days it is not to be regarded as temporary under the terms of this lease. If reworking or additional operations are not begun within the sixty-day period the lease terminates by its own provisions."
In the light of the facts and circumstances of this case it is my view that the lessee was not justified in its failure to commence operations within the sixty day period. In Francis v. Pritchett, 278 S.W.2d 288, 290 (Tex.Civ.App.-El Paso 1955, writ refused), where provisions of the lease were similar *Page 52 
to those here, the court held that resumption of drilling operations was expressly required in the event production ceased or terminated for any reason to keep the lease in force, and since it was not done the lease ipso facto terminated.
In Sunray DX Oil Co. v. Texaco, Inc., 417 S.W.2d 424
(Tex.Civ.App.-El Paso 1967, writ ref'd n. r. e.) the language of the lease there was:
 "3. This lease shall remain in force, unless terminated as hereinafter provided, for the term of five years (hereinafter called the 'primary term'), and so long thereafter as oil, gas, casinghead gas, casinghead gasoline, or any of them, is produced hereunder in paying quantities."
 "7. * * * if after the discovery of oil or gas in paying quantities the production thereof should cease from any cause, this lease shall not terminate if the lessee commences additional drilling or reworking operations within thirty days thereafter * * *."
The court held at page 428:
 "Also, the terms of the lease prevent the application of the temporary cessation doctrine in this case. The above quoted habendum clause being expressly subject to the thirty-day drilling or reworking clause, all production having ceased, and no drilling or reworking operation having been commenced within the thirty-day period, the lease terminated. Adams v. Cannan, Tex.Civ.App., 253 S.W.2d 948, err. ref., n. r. e.; Woodson Oil Company v. Pruett, Tex.Civ.App., 287 S.W.2d 159, err. ref., Haby v. Stanolind Oil and Gas Company, 5 Cir., 228 F.2d 298; Wainwright v. Wainwright, Tex.Civ.App., 359 S.W.2d 628, err. ref., n. r. e."
In Hall v. McWilliams, 404 S.W.2d 606 (Tex.Civ.App.-Austin 1966, writ ref'd, n. r. e.) the lease provided " * * * if after discovery of oil or gas the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional drilling or re-working operations within sixty (60) days thereafter * * *." The court held at page 608: "Under the terms of the lease the court was correct in holding that the cessation of production for more than 60 days was not temporary."
I would affirm the judgment of the trial court.