Stewart v. Amerada Hess Corp.

Edward Stewart's (plaintiff) predecessor issued an oil-and-gas lease to Amerada Hess (defendant) that would remain in effect past its primary term as long as the well produced in paying quantities. Stewart sued to terminate the lease, arguing production was no longer paying, and calculated Amerada's operating costs without including depreciation of its production equipment. The trial court agreed with that calculation method but still found Amerada's lease rights superior; the court of appeals reversed as a matter of law, finding the lease had expired due to nonproduction, and Amerada appealed.