New Mexico Issues Emergency Rule for Shut-in Wells on State Land

April 22, 2020 — In response to the impact of the COVID-19 pandemic and foreign price wars, the New Mexico State Land Office (“NMSLO”) recently issued an Emergency Rule that allows oil producers to temporarily shut-in wells on state land without facing penalties.[1]  Specifically, the Emergency Rule allows lessees to apply to the NMSLO to shut-in wells while maintaining the terms of their lease for at least 30 days, with the possibility of an extension of up to 120 days.  To qualify for the emergency relief under the new Rule, lessees must satisfy that: There is at least one well…
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North Dakota Clarifies Allocation of Oil & Gas Proceeds Between Life Tenants and Remaindermen and Adopts the Open Mines Doctrine

April 9, 2020 — In Reese v. Reese-Young, 938 N.W.2d 405 (N.D. 2020), the Supreme Court of North Dakota provided long overdue guidance on the allocation of oil and gas proceeds as between life tenants and remaindermen. Formerly, practitioners were relegated to the “general rules” that had emerged from legal treatises and the laws of other states. The statutory guidance provided only that the owner of a life estate must “do no act to the injury of the inheritance,” and must prevent “ordinary waste.” See N.D. CENT. CODE §§ 47-02-33, 34. In addressing these successive estates, the court also formally adopted…
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R.A.P. Battle: The Kansas Supreme Court Clips the Rule Against Perpetuities

In Jason Oil Co., LLC v. Littler, 2019 Kan. LEXIS 204 (Kan. 2019) Kansas joined a growing number of jurisdictions declining to apply the rule against perpetuities to defeasible term oil and gas interests. On December 30, 1967, Grantor executed two deeds in favor of separate Grantees conveying tracts of land in Rush County, Kansas (the “1967 Deeds”).  Each 1967 Deed excepted the mineral estate “for a period of 20 years or as long thereafter as oil and/or gas and/or other minerals may be produced.”  Upon the expiration of 20 years, no drilling operations had been conducted on the lands…
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