shut-in royalty clause in Kansas

2012See Levin, 290 Kan. 928 , Syl. ¶¶ 3-5; Tucker v. Hugoton Energy Corp., 253 Kan. 373, 381 , 855 P.2d 929 (1993); see also Welsch v. Trivestco Energy Co., 43 Kan.

2010See Welsch v. Trivestco Energy Co., 43 Kan.

2010“We hold capital expenditures for budding a pipeline are improper considerations for determining whether a gas well will produce in paying quantities under a shut-in royalty clause.” Pray, 233 Kan. at 356-57 .

1993In making such a determination, consideration is given only to the circumstances existing at the time without benefit of the wisdom of hindsight. *380 In Pray v. Premier Petroleum, Inc., 233 Kan. 351, 352 , 662 P.2d 255 (1983), the lessor executed an oil and gas lease which contained the standard provision with a primary term of two years “ ‘and as long thereafter as oil and gas, or either of them, is produced from said land by the lessee, or the premises are being developed or operated.’ ” The lease also contained a shut-in royalty clause.

2021Russell Petroleum, Inc., 235 Kan. 6, 14 , 679 P.2d 158 (1984) ("In the usual oil and gas lease the appellant concedes under Kansas law the lease would terminate by its own terms when further production of the lease by the lessee was abandoned by reason of unprofitable production."); Wilson v. Holm, 164 Kan. 229, 237 , 188 P.2d 899 (1948) (permanent cessation of profitable production terminates the lease); 2 Kuntz, Law of Oil and Gas §§ 26.8(a) & (c), 26.13(c) (2021) ("The shut-in royalty clause is, of course, designed to modify the habendum clause, and the lease will remain in force and effect

2021Russell Petroleum, Inc., 235 Kan. 6, 14 , 679 P.2d 158 (1984) ("In the usual oil and gas lease the appellant concedes under Kansas law the lease would terminate by its own terms when further production of the lease by the lessee was abandoned by reason of unprofitable production."); Wilson v. Holm, 164 Kan. 229, 237 , 188 P.2d 899 (1948) (permanent cessation of profitable production terminates the lease); 2 Kuntz, Law of Oil and Gas §§ 26.8(a) & (c), 26.13(c) (2021) ("The shut-in royalty clause is, of course, designed to modify the habendum clause, and the lease will remain in force and effect

2012See Levin, 290 Kan. 928 , Syl. ¶¶ 3-5; Tucker v. Hugoton Energy Corp., 253 Kan. 373, 381 , 855 P.2d 929 (1993); see also Welsch v. Trivestco Energy Co., 43 Kan.

2010Dewell, 191 Kan. at 263 (quoting Sellers v. Breidenbach, 300 S.W.2d 178, 179 [Tex. Civ.

2010He thus framed the issue before him as: “Does the word capable’ within the phrase ‘capable of producing in paying quantities’ require that a well be capable of production without any additional equipment?” Although Kansas cases had never defined the term “capable,” the district judge relied on two Texas cases— Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 557-58 (Tex. 2002), and Hydrocarbon Mgt. v. Tracker Exploration, 861 S.W.2d 427, 433 (Tex. App. 1993) — to rule that a gas well is capable of producing in paying quantities if it does not require additional equipment or repairs.

2010He thus framed the issue before him as: “Does the word capable’ within the phrase ‘capable of producing in paying quantities’ require that a well be capable of production without any additional equipment?” Although Kansas cases had never defined the term “capable,” the district judge relied on two Texas cases— Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 557-58 (Tex. 2002), and Hydrocarbon Mgt. v. Tracker Exploration, 861 S.W.2d 427, 433 (Tex. App. 1993) — to rule that a gas well is capable of producing in paying quantities if it does not require additional equipment or repairs.

2009Pierce, Kansas Oil and Gas Handbook § 11.18, p. 11-20 (1991) (a lessee seldom has control over the demand for production from a well, and this is why the shut-in royalty clause was devised); see also United States v. Panhandle Eastern Corp., 693 F. Supp. 88, 96 (D.

2009Pierce, Kansas Oil and Gas Handbook § 11.18, p. 11-20 (1991) (a lessee seldom has control over the demand for production from a well, and this is why the shut-in royalty clause was devised); see also United States v. Panhandle Eastern Corp., 693 F. Supp. 88, 96 (D.

2009Del. 1988) (surveying the law regarding the question whether market forces may constitute force majeure and concluding that courts generally refuse to excuse performance under such a theory); Champlin Petroleum Co. v. Mingo Oil Producers, 628 F. Supp. 557, 560-61 (D.

1983In Miller v. Nordan-Lawton Oil and Gas Corp. of Texas, 403 F.2d 946, 948 (5th Cir. 1968), Judge Griffin Bell stated: “Shut-in or in lieu royalties were devised to benefit both the lessor and lessee from the standpoint of insuring exploration for and the production of minerals in paying quantities so that both parties may reap the expected benefits.