4.016 Lease Excludes Coal

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Requirement  4.016

Lease Excludes Coal


 Lease Excludes Coal.  Sam Houston granted Lease 1 to Guadalupe Production, Inc., by instrument dated September 14, 2010, and recorded in Real Property Book 2010, page 151.  The addendum to Lease 1 provides:  “It is understood and agreed that this lease covers only oil, gas and associated hydrocarbons and does not cover iron ore, coal, lignite  and gravel.”  By virtue of the holding of the Alabama Supreme Court in the case of NCNB Texas Nat. Bank, N.A. v. West, 631 So.2d 212 (Ala. 1993), Lease 1 would cover the gas estate outside the coal seam and only gob gas that has escaped the coal seam.

 Requirement.  Obtain an amendment to Lease 1 for a valuable consideration amending the description to include oil, gas, and associated hydrocarbons in Tract 1.  Alternatively, accept the risk that Lease 1 will not cover any coalbed methane gas in Tract 1, except gob gas that escapes the coal seam.

Copyright 2011 by Edward G, Hawkins. All rights reserved.