Texas Oil and Gas Essay Question

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yourmomsofun
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Texas Oil and Gas Essay Question

Postby yourmomsofun » Fri Jul 27, 2012 5:45 pm

Last one the I'll post on TLS; I promise.

Sean owned a 2,000 acre tract of land in Atascosa County, Texas (the "land"), and he also owned all of the mineral interest in the land. On Dec 1, 2006, Sean entered into a valid lease of all mineral interest in the north 1,000 acres of the with production Co. for oil and gas production. The lease contained the following terms:

a) a 1/16 royalty interest
b) a "bonus payment of $1,500 per acre
c) delay rental of $750 per acre to be paid on the anniversary of the lease for any period during which no production operation have commenced; and
d) a term of five years and for so long thereafter as oil and/ or gas is produced on the Land.
e) a term of five years and for so long thereafter as oil and/or gas is produced on the Land.

Oil Co. began drilling operations on the Land on Dec 30, 2007 and completed three wells from mid 2008 through mid 2010, which have produced gas continously in paying quantities since then. Oil Co. did no no further drilling thereafter.

On Dec 1, 2010, the fourth anniversary of the lease to Oil Co. Sean sold all 2,000 acres of the Land to Riley with a reservation of all mineral interests in the Land to Sean. Rilely, a wind farm proponent, believed that the lease to Oil Co. on the north 1,000 acres would expire at the end of the fifth year (Nov 30, 2011) and that thereafter he would be able to pursue his wind farm amitions free of any interference from the mineral production activities.

Oil Co.'s completed wells were still producing when on Nov 15, 2011, Oil Co. announced its intention to begin drilling a new well in Jan 2012 on the north 1,000 acres. Riley objected strenuously, asserting that Oil Co. had no right to engage in drilling after the end of the primary term of the lease. He also demanded that Oil Co. remove all its equipment and abandon the wells at the end of the primary term of the lease.

In March 2012, Sean entered into a new 5 year oil and gas lease with Oil Co. on the south 1,000 acres of the Land over Riley's objection. Riley claimed that, inasmuch as a leade did not exist on the south 1,000 acres prior to the time he purchased the Land, Sean had no continuing right to enter into a new lease.

1. At any time under the lease for the North 1,000 acres, was Sean entitled to receive any delay rentals or bonus payments from Oil Co. Explain fully

2. At what point in time, if at all, did Sean's right to begin receving royalty payments arise and for how long do such rights continue? Explain fully

3. Could Riley have prevented Oil Co. from drilling the new well in Jan 2012 and required it to remove its equipment and abandon all wells at the end of Nov 2011? Explain fully.

4. Could Riley have successfully challanged Sean's March 2012 lease to Oil Co.? Explain fully.

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I.P. Daly
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Joined: Fri Nov 19, 2010 3:27 pm

Re: Texas Oil and Gas Essay Question

Postby I.P. Daly » Sat Jul 28, 2012 1:48 pm

yourmomsofun wrote:Last one the I'll post on TLS; I promise.

Sean owned a 2,000 acre tract of land in Atascosa County, Texas (the "land"), and he also owned all of the mineral interest in the land. On Dec 1, 2006, Sean entered into a valid lease of all mineral interest in the north 1,000 acres of the with production Co. for oil and gas production. The lease contained the following terms:

a) a 1/16 royalty interest
b) a "bonus payment of $1,500 per acre
c) delay rental of $750 per acre to be paid on the anniversary of the lease for any period during which no production operation have commenced; and
d) a term of five years and for so long thereafter as oil and/ or gas is produced on the Land.
e) a term of five years and for so long thereafter as oil and/or gas is produced on the Land.

Oil Co. began drilling operations on the Land on Dec 30, 2007 and completed three wells from mid 2008 through mid 2010, which have produced gas continously in paying quantities since then. Oil Co. did no no further drilling thereafter.

On Dec 1, 2010, the fourth anniversary of the lease to Oil Co. Sean sold all 2,000 acres of the Land to Riley with a reservation of all mineral interests in the Land to Sean. Rilely, a wind farm proponent, believed that the lease to Oil Co. on the north 1,000 acres would expire at the end of the fifth year (Nov 30, 2011) and that thereafter he would be able to pursue his wind farm amitions free of any interference from the mineral production activities.

Oil Co.'s completed wells were still producing when on Nov 15, 2011, Oil Co. announced its intention to begin drilling a new well in Jan 2012 on the north 1,000 acres. Riley objected strenuously, asserting that Oil Co. had no right to engage in drilling after the end of the primary term of the lease. He also demanded that Oil Co. remove all its equipment and abandon the wells at the end of the primary term of the lease.

In March 2012, Sean entered into a new 5 year oil and gas lease with Oil Co. on the south 1,000 acres of the Land over Riley's objection. Riley claimed that, inasmuch as a leade did not exist on the south 1,000 acres prior to the time he purchased the Land, Sean had no continuing right to enter into a new lease.

1. At any time under the lease for the North 1,000 acres, was Sean entitled to receive any delay rentals or bonus payments from Oil Co. Explain fully

2. At what point in time, if at all, did Sean's right to begin receving royalty payments arise and for how long do such rights continue? Explain fully

3. Could Riley have prevented Oil Co. from drilling the new well in Jan 2012 and required it to remove its equipment and abandon all wells at the end of Nov 2011? Explain fully.

4. Could Riley have successfully challanged Sean's March 2012 lease to Oil Co.? Explain fully.

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sunynp
Posts: 1899
Joined: Tue May 24, 2011 2:06 pm

Re: Texas Oil and Gas Essay Question

Postby sunynp » Sat Jul 28, 2012 1:54 pm

Is this for summer school? Why are you posting these here?

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Systematic1
Posts: 237
Joined: Sun Feb 19, 2012 5:14 pm

Re: Texas Oil and Gas Essay Question

Postby Systematic1 » Sat Jul 28, 2012 2:55 pm

Motion to out OP by divulging his IP address and email.

nonprofit-prophet
Posts: 844
Joined: Sun Oct 04, 2009 11:10 am

Re: Texas Oil and Gas Essay Question

Postby nonprofit-prophet » Sat Jul 28, 2012 2:59 pm

I think those are bar prep essays, not summer school. Though I could be wrong

Applesaucer
Posts: 3
Joined: Sun Jul 19, 2009 12:19 pm

Re: Texas Oil and Gas Essay Question

Postby Applesaucer » Mon Jul 30, 2012 2:53 pm

Systematic1 wrote:Motion to out OP by divulging his IP address and email.


This is a douche bag post if I have ever seen one.




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