Oil & Gas Litigation Analysis
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Lease Litigation

Craddick v. Cimarex Energy Co.

Texas Court of Appeals, El Paso Not specified in source resolved

The El Paso Court of Appeals affirmed a take-nothing judgment against override owners in Reeves County whose overriding royalty interests were extinguished when Cimarex surrendered a producing lease to the mineral owner, holding that Texas common law does not recognize a bad-faith washout claim. The court construed the lease's surrender clause requiring 'good faith' as imposing only a ministerial duty to deliver a recordable release instrument, not a duty governing the lessee's business decision whether to surrender.

Analysis