pjc-oil-and-gas-2022-lib

PJC 303.2

L ESSOR -L ESSEE I SSUES

PJC 303.2

Question on Breach of Express Pooling Provision

QUESTION ______ Did Larry Lessee fail to pool in accordance with the terms of the lease? The lease provides [ insert express lease provision ]. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 303.2 should be used when the lessor claims the lessee has breached the express terms of the pooling provisions of the lease. The right to pool must be expressly granted in the lease and may be exercised only to the extent stipu lated in the lease. Source of question. PJC 303.2 is derived from Samson Exploration, LLC v. T.S. Reed Properties, Inc. , 521 S.W.3d 766 (Tex. 2017); Coastal Oil & Gas Corp. v. Garza Energy Trust , 268 S.W.3d 1, 21 n.68 (Tex. 2008) (citing Southeastern Pipe Line Co. v. Tichacek , 997 S.W.2d 166, 170 (Tex. 1999)); and Jones v. Killingsworth , 403 S.W.2d 325, 327 (Tex. 1965). Remedies. When a lessee fails to pool in accordance with the terms of the lease, courts view the pooling as ineffective from the beginning and grant remedies to reflect that fact. Tittizer v. Union Gas Corp. , 171 S.W.3d 857 (Tex. 2005) (holding lessee’s declaration of retroactive pooling improper in light of express terms of pooling clause); Jones , 403 S.W.2d 325 (holding lessee could not maintain lease by forming pooled unit that did not comply with express terms of pooling clause). For a question on damages for breach of express pooling provisions, see PJC 313.12.

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