Implied marketing covenant in oil and gas leases: some needed changes for the 80's

Journal Article · Sat Mar 01 04:00:00 EST 1986 · La. Law Rev.; (United States)

OSTI ID:5485122

Kramer, B M; Pearson, C

Anticipating an increase in litigation on the lessee's duty to market natural gas which has been discovered on the leasehold, the authors review the lessee's obligation under the implied covenant to market. In light of the increased pressures on the lessee by federal regulations and the downturn in demand, any reevaluation of the nearly 100-year-old covenant should focus on the standard of conduct and standard of proof by which a lessee's marketing activities are to be judged; i.e., a review of the continued viability of the reasonably prudent operator standard. A review of case law finds that in those instances where the parties to a lease share a common interest in production, the lessee should be allowed to exercise his business judgement without fear of second guessing by judge or jury. The increase of the standard of proof to a clear and convincing evidence level achieves an acceptable compromise.

• Research Organization: Texas Tech Univ., Lubbock
• OSTI ID: 5485122
• Journal Information: La. Law Rev.; (United States), Journal Name: La. Law Rev.; (United States) Vol. 46:4; ISSN LLRED
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
031000* -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294003 -- Energy Planning & Policy-- Natural Gas
CASE LAW
CONTRACTS
DOCUMENT TYPES
ENERGY SOURCES
FEDERAL REGION VI
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
GEOLOGIC DEPOSITS
LAWS
LAWSUITS
LEASES
LEGAL ASPECTS
LOUISIANA
MARKETING
MINERAL RESOURCES
NATURAL GAS
NATURAL GAS DEPOSITS
NORTH AMERICA
REGULATORY GUIDES
RESOURCES
USA