pjc-oil-and-gas-2022-lib

L ESSOR -L ESSEE I SSUES

PJC 303.11

PJC 303.11 Question and Instructions on Breach of Implied Covenant to Protect against Drainage QUESTION ______ Did Larry Lessee fail to prevent substantial drainage from Paul Payne ’s lease? Larry Lessee failed to prevent substantial drainage from a lease under his control if he failed to act as a reasonably prudent operator would under the same or similar circumstances with a reasonable expectation of profit. A “reasonably prudent operator” means an operator of ordinary prudence acting with ordinary diligence under the same or similar circumstances, having due regard for the interests of both Larry Lessee and Paul Payne . Answer “Yes” or “No.” Answer: _______________ Source of question and instruction. PJC 303.11 is derived from Rosetta Resources Operating, LP v. Martin , 645 S.W.3d 212 (Tex. 2022); Coastal Oil & Gas Corp. v. Garza Energy Trust , 268 S.W.3d 1, 17 n.57 (Tex. 2008); Kerr-McGee Corp. v. Helton , 133 S.W.3d 245, 249–53 (Tex. 2004); Southeastern Pipe Line Co. v. Tichacek , 997 S.W.2d 166, 170 (Tex. 1999); Amoco Production Co. v. Alexander , 622 S.W.2d 563, 567 n.1 (Tex. 1981); Circle Dot Ranch, Inc. v. Sidwell Oil & Gas, Inc. , 891 S.W.2d 342, 346 (Tex. App.—Amarillo 1995, writ denied); Good v. TXO Production Corp. , 763 S.W.2d 59, 61 (Tex. App.—Amarillo 1988, writ ref’d n.r.e.); Vela v. Penn zoil Producing Co. , 723 S.W.2d 199, 206 (Tex. App.—San Antonio 1986, writ ref’d n.r.e.); and Elliott v. Davis , 553 S.W.2d 223, 226–27 (Tex. App.—Amarillo 1977, writ ref’d n.r.e.) (citing Eugene Kuntz, The Law of Oil and Gas § 48.3, p. 218 (1972)); see also Ernest E. Smith & Jacqueline Lang Weaver, 1 Texas Law of Oil and Gas § 5.3 A.1. (2d ed. 2013). Modification depending on lease terms. If the lease provisions contain a stan dard other than the reasonably prudent operator standard, then that provision should be used in place of the common law measure in the instruction. Common lessee. For a discussion regarding the circumstances in which the lessee is the same on both leases, see Amoco Production Co. , 622 S.W.2d at 569, and Shell COMMENT When to use. PJC 303.11 should be used when the plaintiff is suing for failure to protect against drainage.

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