Ridge Oil Co. v. Guinn Investments, Inc.
Supreme Court of Texas
148 S.W.3d 143 (Tex. 2004)
Ridge Oil Company (defendant) and Guinn Investments (plaintiff) held adjoining tracts under a single 1937 oil-and-gas lease that stayed alive on both tracts as long as either tract kept producing in paying quantities. Ridge's tract produced continuously until December 1997, when Ridge intentionally stopped production to try to end the 1937 lease; about 90 days later, Ridge signed a brand-new lease covering only its own tract and resumed production under that new lease. The Guinn tract never produced during the relevant period. Guinn sued, invoking the temporary-cessation-of-production doctrine to argue the 1937 lease survived as to its tract. The trial court granted Ridge summary judgment, the court of appeals reversed, and Ridge appealed.
Whether a lessee can effectively end a shared oil-and-gas lease as to its own tract by signing a new lease on that tract, even though the temporary-cessation-of-production doctrine would otherwise apply.