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SUNDOWN ENERGY LP v. HJSA NO. 3, LP

No. 19-1054.

622 S.W.3d 884 (2021)

SUNDOWN ENERGY LP; SMC 2000 LP, PGP Holdings 1, LLC; Smith Allen Oil & Gas, LLP; Transmountain Exploration LLC; Fortune Natural Resources Corporation; Texas Heat of the Permian Basin, Inc.; Whiting Oil and Gas Corporation; Eagle Rock Acquisition Partnership II, LP; Odyssey Royalties LLC; Horizon Royalties LLC; Pinecone Resources LLC; Brenda Dorman Faught; and Lena Renee Brigman, Petitioners, v. HJSA NO. 3, LIMITED PARTNERSHIP, Respondent.

Supreme Court of Texas.

Rehearing Denied June 11, 2021.

Attorney(s) appearing for the Case

Adam P. Schiffer, Houston, for Real Party in Interest.

William Clark Lea, for Petitioners Transmountain Exploration, LLC, Faught, Brenda Dorman, Pinceone Resources, LLC, Horizon Royalties, LLC, Odyssey Royalties, LLC.

Gwen J. Samora, E. R. Norwood, for Respondent.

Matthew Travis French, Midland, for Petitioners Brigman, Lena Renee.

Wade C. Hudman, Odessa, for Petitioners Texas Heat of the Permian Basin, Inc.

Craig A. Haynes, Dallas, Melissa M. Davis, Austin, Rachelle Hoffman Glazer, Dallas, for Petitioners SMC 2000, LP, Smith Allen Oil & Gas, LLP.

A. Randall Friday, Houston, for Petitioners PGP Holdings 1, LLC.

W. Bruce Williams, Eastland, Eastland County, for Petitioners Whiting Oil and Gas Corporation.

Derek Lee Montgomery, Midland, W. Bruce Williams, Eastland, Eastland County, David E. Keltner, Matthew David Stayton, Fort Worth, J. D. Page, Houston, for Petitioners Fortune Natural Resources Corporation, Sundown Energy, LP.

This contract dispute involves the interpretation of a mineral lease's "continuous drilling program" provision. The lessor contends the provision operates as a special limitation that terminated the lease as to non-producing tracts when the lessee failed to timely "spud-in" new wells.1 We hold that under the lease...

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