pjc-oil-and-gas-2022-lib

PJC 303.22

L ESSOR -L ESSEE I SSUES

PJC 303.22 Question and Instruction on Temporary Cessation of Production QUESTION ______ Was the cessation of production of [ oil/gas ] from the lease in question tem porary? A cessation of production of oil or gas is temporary if the lessee acts with diligence to remedy the cessation and resumes production in a reasonable time. Answer “Yes” or “No.” Answer: _______________ COMMENT When to use. PJC 303.22 should be used if it has been determined that the cause of the cessation of production is a valid excuse under the temporary cessation of pro duction doctrine. If the validity of the excuse is not determinable as a matter of law, an additional question or a modification of the question may be needed for the jury to determine that fact dispute. The above question is not appropriate when the lease con tains an express “cessation of production” clause. Ridenour v. Herrington , 47 S.W.3d 117, 121–22 (Tex. App.—Waco 2001, pet. denied). Source of question and instruction. PJC 303.22 is derived from Ridge Oil Co. v. Guinn Investments, Inc. , 148 S.W.3d 143, 158 (Tex. 2004), and Watson v. Rochmill , 155 S.W.2d 783, 784 (Tex. 1941). Scope of the temporary cessation of production doctrine. Earlier cases sug gested that the temporary cessation of production doctrine was limited to situations in which the cessation was the result of mechanical breakdown of equipment used in conjunction with the well, a sudden stoppage of production from the well, or the like or was unforeseen and unavoidable. See, e.g., Amoco Production Co. v. Braslau , 561 S.W.2d 805 (Tex. 1978); Midwest Oil Corp. v. Winsauer , 323 S.W.2d 944 (Tex. 1959); Watson , 155 S.W.2d at 784; Scarborough v. New Domain Oil & Gas Co. , 276 S.W. 331 (Tex. App.—El Paso 1925, writ dism’d). However, the Texas Supreme Court clarified that the doctrine is not so limited. Ridge Oil Co. , 148 S.W.3d at 151–52. The cause of the cessation need not be a sudden stoppage or a mechanical breakdown, nor must the cessation be unforeseeable and unavoidable. Ridge Oil Co. , 148 S.W.3d at 151–52. Instead, a variety of circumstances may qualify as a valid excuse under the doctrine, including situations in which the stoppage was voluntary, foreseeable, or avoidable. Ridge Oil Co. , 148 S.W.3d at 151–52. Whether a cause constitutes a valid excuse may be determined as a matter of law. See, e.g., Winsauer , 323 S.W.2d at 948. However, the

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