316 Wickford, Inc. v. Energytec, Inc. (In re Energytec, Inc.)
Wednesday, September 2nd, 2015
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:
- TRC approves well plugging procedure.
- 3/08 TRC Shut-in Order #1 for plugging procedure.
- 12/17/08 TRC notice of production imbalances.
- 1/16/09 TRC Shut-in Order #2 for production imbalances.
- 1/20/09 Shut-in Order #1 lifted.
- 3/25/09 Shut-in Order #2 lifted.
- 8/09 Production resumed.
- Force majeure clause “on account of any . . . cause beyond the control of lessee.”
Issues:
- Did Lease terminate for failure to produce?
Holdings:
- Lease did not terminate because of Shut-in Order #1 because Lessee had no control over internal TRC confusion.
- 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.