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The Curious Case of the Modern Non-Participating Leasehold Co-Tenant

Contains material from May 2025
The Curious Case of the Modern Non-Participating Leasehold Co-Tenant
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Unlike traditional leasehold co-tenancy, modern leasehold co-tenancy in horizontal wells presents unique challenges. Following the holding in Apache v. Devon, where the court determined that an operator not in privity with another leasehold owner has no duty or obligation to pay the royalties on that leasehold owner’s leases, practical questions have emerged over the payment of royalty to the non-participating leasehold co-tenant’s lessors and mineral owners, which questions include: Who has the obligation to pay the royalty? When does the obligation to pay royalty accrue?  What happens if a well doesn’t pay out?  What is the statute of limitations and how is it measured? How are royalties calculated in absence of production and price information?

Includes: Video Audio Paper Slides

  • Total Credit Hours:
  • 0.50
  • Credit Info
  • TX, CA
  • TX MCLE credit expires: 5/31/2026
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1. The Curious Case of the Modern Non-Participating Leasehold Co-Tenant (May 2025)

Thomas M. “Mike” Murray, Lauren Coursey

0.50 0.00 0.00 0.50
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Video
(mp4)
29 mins
Audio
(mp3)
29 mins
Paper
(pdf)
26 pgs
Slides
(pdf)
21 pgs

Session 1 —29 mins 0.50

The Curious Case of the Modern Non-Participating Leasehold Co-Tenant (May 2025)

Unlike traditional leasehold co-tenancy, modern leasehold co-tenancy in horizontal wells presents unique challenges. Following the holding in Apache v. Devon, where the court determined that an operator not in privity with another leasehold owner has no duty or obligation to pay the royalties on that leasehold owner’s leases, practical questions have emerged over the payment of royalty to the non-participating leasehold co-tenant’s lessors and mineral owners, which questions include: Who has the obligation to pay the royalty? When does the obligation to pay royalty accrue?  What happens if a well doesn’t pay out?  What is the statute of limitations and how is it measured? How are royalties calculated in absence of production and price information?

Originally presented: Apr 2025 Oil, Gas and Mineral Law Institute

Thomas M. “Mike” Murray, McMahon Surovik Suttle, PC - Abilene, TX
Lauren Coursey, McMahon Surovik Suttle, PC - Abilene, TX