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Ridge Oil Co. v. Guinn Investments, Inc.
Supreme Court of Texas
148 S.W.3d 143 (Tex. 2004)
Ridge Oil Company, Inc. (Ridge) (defendant) and Guinn Investments, Inc. (Guinn) (plaintiff) were lessees on adjoining tracts of land that were subject to a single oil and gas lease (1937 lease). The 1937 lease provided that it would remain in effect so long as there was production in paying quantities on the land subject to the lease. Thus, as long as there was production on either the Ridge tract or the Guinn tract, the 1937 lease would remain in effect as to both tracts. There was production on the Ridge tract from the inception of the 1937 lease to December 1997, at which time Ridge intentionally ceased production temporarily in an attempt to terminate the 1937 lease. Approximately 90 days after production ceased, Ridge entered into a new lease with the lessors, covering only the Ridge tract. At that time, Ridge restarted production. There was no production on the Guinn tract throughout the relevant time period. Guinn brought suit against Ridge based on the temporary-cessation-of-production doctrine, claiming that the 1937 lease had not terminated with respect to the Guinn tract. The trial court granted summary judgment to Ridge, and Guinn appealed. The court of appeals reversed. Ridge appealed.
Rule of Law
Holding and Reasoning (Owen, J.)
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