Oag v. Desert Gas Exploration Co.

Supreme Court of New York, Appellate Division

659 N.Y.S.2d 654 (N.Y. App. Div. 1997)

If an oil and gas lessee assigns a portion of its interest in the lease, and obtains production on the part of the lease retained, such production will satisfy the habendum clause of the lease as to the part retained and the part assigned.

Relevant Facts

Henry Oag and others (the plaintiffs) owned a tract of land and signed an oil and gas lease thereon, which provided a shut-in royalty payment if there was no production. Desert Gas Exploration Co. (the defendant) was assigned a portion of the oil and gas lease. There were several wells subject to the lease, but none were producing oil in the portion assigned to the defendant. Nevertheless, the plaintiffs received royalty payments. The plaintiffs sued, seeking shut-in royalty payments from the defendant. The Supreme Court of New York granted summary judgment to the defendant, and the plaintiff appealed.

Issue

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Holding & Reasoning

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Concurrence

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Dissent

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Last updated:

December 23, 2020

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Procedural History

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Citations

659 N.Y.S.2d 654 (N.Y. App. Div. 1997)