Ninth Court of Appeals Reverses on Habendum Clause Construction: Whether 90-Day Cessation Provision Replaces Clifton Prudent Operator Standard

Zarvona Energy secured reversal of summary judgment denial in dispute over whether identical oil and gas leases covering Tyler and Polk County acreage terminated under a 90-day cessation provision or required application of the Clifton v. Koontz reasonably-prudent-operator standard for measuring production in paying quantities. The appellate court addressed three controlling questions: whether the lease's 90-day cessation language replaces the traditional Clifton standard, whether cessation provisions apply on a pooled-unit basis or to all retained acreage collectively, and whether the retained acreage clause operates as a one-time snapshot provision or permits rolling partial terminations.