Take-Nothing Judgment in High-Dollar Oil-and-Gas-Rights Dispute Affirmed on Appeal

In this large oil-and-gas dispute, Plaintiff Community Bank of Raymore asserted that the drilling rights of Defendants Chesapeake Exploration, L.L.C. and Anadarko Petroleum Corporation terminated as to certain deep depths.  Plaintiff had two theories:  (1) that a horizontal-termination clause had terminated Defendants’ deep-depth drilling rights at the expiration of the lease’s primary term; and (2) that a severance clause was triggered, effecting a partial termination of deep-depth drilling rights as to areas of the lease in which Defendants had already achieved production at the expiration of the primary term.  On appeal, Defendants argued that neither partial-termination clause had been triggered because the lease continued to be held in full force, past the expiration of the primary term, by the lessee's continuous-development operations.  After briefing and oral argument, the El Paso Court of Appeals sided with Defendants and affirmed the trial court’s judgment that Plaintiff take nothing on its claims.  Community Bank of Raymore v. Chesapeake Exploration, L.L.C. & Anadarko Petroleum Corp., No. 08-12-00025-CV (Tex. App.–El Paso Nov. 6, 2013).

Chesapeake's Brief
Court of Appeals Opinion