316 Wickford, Inc. v. Energytec, Inc. (In re Energytec, Inc.)

Richard F. Brown
 
The following is not a legal opinion.  You should consult your attorney if the case may be of significance to you.
 
Energytec, Inc.
 
Facts:

1. TRC approves well plugging procedure.
2. 3/08 TRC Shut-in Order #1 for plugging procedure.
3. 12/17/08 TRC notice of production imbalances.
4. 1/16/09 TRC Shut-in Order #2 for production imbalances.
5. 1/20/09 Shut-in Order #1 lifted.
6. 3/25/09 Shut-in Order #2 lifted.
7. 8/09 Production resumed.
8. Force majeure clause “on account of any . . . cause beyond the control of lessee.”

 
Issues:

1. Did Lease terminate for failure to produce?

 
Holdings:

1. Lease did not terminate because of Shut-in Order #1 because Lessee had no control over internal TRC confusion.
2. Lessee did have control over failure to timely respond to Shut-in Order #2 and Lease terminated in March 2009.

 
Significance:
 
Internal confusion at the TRC is not within the control of Lessee, but delay in responding to a TRC order is within Lessee’s control.  Not clear whether lease terminated for three-month delay in responding, or additional five-month delay in failing to resume production.