We can't find the internet
Attempting to reconnect
Something went wrong!
Attempting to reconnect
MRC Permian Company v. Point Energy Partners Permian LLC
MRC Permian Company missed a drilling deadline under its lease and sought declaratory relief that a force majeure clause prevented termination, while Point Energy Partners claimed successor rights and counterclaimed for breach. The El Paso Court of Appeals, on remand from the Texas Supreme Court, held that the lease's retained-acreage clause was a covenant rather than a special limitation, meaning breach could not result in automatic lease termination or limit production unit size, and further clarified that horizontal wellbore length must be measured from the kickoff point into the producing formation.
Analysis
El Paso Court Construes Retained-Acreage Clause as Covenant, Not Special Limitation, in Permian Lease Termination Dispute
MRC Permian Company missed a drilling deadline under its lease and sought to invoke force majeure, while Point Energy Partners claimed successor rights and the lessors argued termination, spawning disputes over quasi-estoppel, retained-acreage clause construction, and horizontal wellbore measurement methodology. On remand from the Texas Supreme Court, the El Paso Court of Appeals held that the lease's retained-acreage clause was a covenant rather than a special limitation, meaning breach could not result in automatic lease termination or limit production unit size.
El Paso Court Clarifies Retained-Acreage Clause as Covenant, Not Special Limitation, in Permian Lease Dispute
MRC Permian Company missed a drilling deadline under its lease and sought declaratory relief that a force majeure clause prevented termination, while Point Energy Partners claimed successor rights and counterclaimed for breach. The El Paso Court of Appeals, on remand from the Texas Supreme Court, held that the lease's retained-acreage clause was a covenant rather than a special limitation, meaning breach could not result in automatic lease termination or limit production unit size, and further clarified that horizontal wellbore length must be measured from the kickoff point into the producing formation.