Fifth Circuit Holds 40-Day Production Cessation During Bankruptcy Does Not Terminate Texas Oil and Gas Leases

The Fifth Circuit affirmed that EP Energy's temporary 40-day cessation of production from south Texas wells during its Chapter 11 bankruptcy and the COVID-19 pandemic did not automatically terminate mineral leases under Texas law, rejecting lessors' administrative expense claims premised on trespass damages. The court held that the Bankruptcy Court had subject-matter jurisdiction over the underlying state-law lease-termination claims when adjudicating the lessors' request for payment of administrative expenses under 11 U.S.C. § 503(b)(1)(A).