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Barclay Petroleum Inc. v. Matthew Bailey, trustee of the Bailey Family Trust dated 1/12/2007 et al., Case No. 2017-1387
Fourth District Court of Appeals (Hocking County)
ISSUES:
- Did a landowner expressly represent to an oil and gas leaseholder that providing free gas was sufficient to keep an oil and gas lease in effect, and was the landowner then "estopped" from later claiming that the lease terminated during the time the landowner accepted the free gas?
- If the landowner accepted benefits under an oil and gas lease without reserving certain rights, was the landowner "quasi-estopped" from claiming that the lease terminated before the acceptance of benefits?
BACKGROUND:
Darrell and Janet Lucas owned a 70-acre property in Hocking County and, in 1984, leased their oil and gas rights to a predecessor of Barclay Petroleum Inc. The lease contained a standard "habendum clause," which provided a primary term of one year. After that, the lease would remain in effect "as long thereafter as oil, gas, or casinghead gas is produced from the leased premises or operations are continued as herein provided." The Lucases were paid a 12.5 percent royalty for oil and gas produced and sold, and they also used the natural gas produced from the wells for their house without charge. The natural gas was the primary way the Lucases heated their home.
Fourth District Court of Appeals (Hocking County)
ISSUES:
- Did a landowner expressly represent to an oil and gas leaseholder that providing free gas was sufficient to keep an oil and gas lease in effect, and was the landowner then "estopped" from later claiming that the lease terminated during the time the landowner accepted the free gas?
- If the landowner accepted benefits under an oil and gas lease without reserving certain rights, was the landowner "quasi-estopped" from claiming that the lease terminated before the acceptance of benefits?
BACKGROUND:
Darrell and Janet Lucas owned a 70-acre property in Hocking County and, in 1984, leased their oil and gas rights to a predecessor of Barclay Petroleum Inc. The lease contained a standard "habendum clause," which provided a primary term of one year. After that, the lease would remain in effect "as long thereafter as oil, gas, or casinghead gas is produced from the leased premises or operations are continued as herein provided." The Lucases were paid a 12.5 percent royalty for oil and gas produced and sold, and they also used the natural gas produced from the wells for their house without charge. The natural gas was the primary way the Lucases heated their home.
July 17, 2018