Community Bank of Raymore v. Chesapeake Exploration, LLC
Texas Court of Appeals
416 S.W.3d 750 (Tex. App. 2013)
Community Bank of Raymore (CBR) (plaintiff) leased oil and gas rights to Chesapeake (defendant), with the lease terminating at the end of the primary term unless Chesapeake maintained a continuous-development program, and separately providing that at the end of the primary term or the conclusion of that development program, the lease would terminate as to formations below Chesapeake's drilling depth. Chesapeake drilled a producing well and maintained an ongoing continuous-development program past the primary term's end; CBR sought a declaration that Chesapeake had no rights to minerals below the drilled well's depth, but the trial court ruled for Chesapeake, and CBR appealed.
Whether, absent a contractual provision stating otherwise, production or other operations on any part of the land included in an oil and gas lease will perpetuate the lease beyond the primary term as to all of the land covered by the lease.