Court Opinion

ID: 9660276
Source: CourtListenerOpinion
Date Created: 2023-08-23 22:09:15.113369+00
Date Added: 2024-06-11T18:14:17.320175
License: Public Domain

OPINION ON MOTION FOR REHEARING
Appellees, in their motion for rehearing, complain of our original opinion by contending, among other things, that we have advanced extraordinary factual premises not supported by the evidence and have misconstrued the Supreme Court holdings on Texas mineral law in Clifton and Sunac.1 In this, they are in error. We held in this summary judgment case, that a genuine issue of material fact still exists as to whether a breach of the implied covenant to reasonably develop the uranium interest on the tract in question had occurred.
Additionally, appellees argue in their motion for rehearing that this Court has made a bold departure from the established law relating to the implied covenant of reasonable development of mineral interests. Such is not the case. This covenant has always imposed a duty upon the lessee to develop the mineral interests once the minerals are discovered in paying quantities. Concerning oil and gas, “... after discovery of oil, gas, or other minerals in paying quantities, the obligation to reasonably develop comes into being.” Shell Oil Company v. Stansbury, 401 S.W.2d 623, 636 (Tex.Civ.App.— Beaumont 1966, writ ref’d n. r. e. at 410 S.W.2d 187).
Discovery in paying quantities can be accomplished by different means, depending on the type of mineral interest. Inherent to the nature of oil and gas is the requirement that production be obtained before it can be discovered in paying quantities. Oil and gas require actual production to ascertain “(w)hether there is a reasonable basis for the expectation of profitable return from the well.... ” Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684 (1959). The evidence in this record shows that uranium, on the other hand, can be discovered in paying quantities without actual extraction from the ground. It is possible, therefore, to ascertain through expert evaluations whether uranium ore exists in commercial quantities in the ground.2
It is within the province of the finder of facts to make this determination of whether uranium did exist in commercial quantities. To aid the fact finder in this determination, the courts have invoked the doctrine of the reasonable and prudent operator test. Clifton v. Koontz, supra at 691; Senter v. Sha-nafelt, 233 S.W.2d 202 (Tex.Civ.App.-Fort Worth 1950, no writ). Upon retrial of this cause, the jury (or the trial court as the case may be), should evaluate the performance of Sabine in relation to the way in which a reasonable and prudent operator would have complied with the implied covenant of reasonable development. If uranium is found by the fact finder to have existed in commercial quantities during the time the lease was in effect, the next question to be determined is whether a reasonable and prudent operator would have developed the tract? The fact question raised by the record must be determined in a trial on the merits.
The motion for rehearing is overruled.

. Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684, 693-4 (1959); Sunac Petroleum Corp. v. Parkes, 416 S.W.2d 798 (Tex.Sup.1967).

. Actual production of uranium is not a prerequisite to such a determination.