El Paso Court Rejects Common-Law Bad-Faith Washout Claims and Narrows Lease Surrender 'Good Faith' Obligations

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.