Top Leases Can Survive the Rule Against Perpetuities

In BP Am. Prod. Co. v. Laddex, Ltd., 07-13-00392-CV, 458 S.W.3d 683, Tex. App. LEXIS 1521 (February 17, 2015), the Amarillo Court of Appeals upheld the validity of a top lease and remanded the case to determine whether there was a cessation of production in paying quantities which potentially terminated the underlying lease. In Laddex, the lessors executed a lease on January 13, 1971 ("Arrington Lease"), which was eventually assigned to BP. Id. at 684. The Arrington Lease provided for a primary term of five years and so long thereafter as oil or gas is produced from the land. Id. The Mahler D-2 Well…
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