Sun Exploration and Production Co. v. Jackson

Ocie Jackson (defendant) leased 10,000 acres of oil and gas rights to Sun Exploration (Sun) (plaintiff), which drilled three wells and found oil only in a portion called the Oyster Bayou Field; Jackson claimed Sun had developed only that field and failed to explore or develop the rest of the leasehold. Sun sued for a declaration the lease remained valid and to enjoin Jackson from blocking its access, and Jackson countersued for breach of the implied covenants to develop and explore, seeking cancellation. The jury found Sun had reasonably developed the leasehold but had failed to reasonably explore the entire tract, and after mixed rulings by the trial court and court of appeals on cancellation, the Texas Supreme Court reviewed the case.