“HBP” means held by production. This is in reference to a provision in an oil & gas lease that extends the lease indefinitely past the primary term so long as there is production in paying quantities.
Production Payments Defined
A production payment is a right to oil, gas, or other minerals in place that entitles its owner to a specified fraction of production until a specified amount of money or minerals has been received. A production payment is payable
Temporary Cessation of Production
In Natural Gas Pipeline Company of America v. Pool, 124 S.W.3d 188 (Tex.2003), lessors under three oil and gas leases contended that the leases terminated because intermittently over the years there were periods of time ranging from 30 to 153
Overriding Royalty Interest Defined
An overriding royalty is a benefit an assignor receives when he or she assigns a leasehold interest. It is an interest which is carved out of, and constitutes part of, the working interest created by an oil and gas lease.
Texas Rules of Contract Construction and Interpretation
Contract Construction: Harmonize, and only if this is not possible, is there more than one reasonable interpretation of a contract such that a fact issue is created concerning the parties’ intent. Before extrinsic evidence (any oral or written evidence outside
Ambiguity as an Affirmative Defense
Ambiguity is an affirmative defense and must be specifically plead. See Gulf & Basco Co. v. Buchanan, 707 S.W.2d 655, 656 (Tex. App. – Houston [1st Dist.] 1986, writ refd, n.r.e.); see also, World Help v. Leisure Lifestyles, Inc., 977
Indefiniteness of Essential Term of Contract
A contract must result from a meeting of the minds of the parties in mutual assent to the terms, must be based upon a sufficient consideration, free from fraud or undue influence, not against public policy and sufficiently definite to
Reasonableness of Attorney’s Fees
Reasonableness of attorney’s fees is a question of fact and must be supported by competent evidence. The factors to be considered in determining the reasonableness of attorney’s fees include: (1) the time and labor involved; (2) the nature and complexities
Net Revenue Interest Defined
Net revenue interest or “NRI” is a share of production after all burdens, such as royalty and overriding royalty interests, have been subtracted from the working interest. It is the percentage of production that each working interest party actually receives.
Fraud
Fraud is an affirmative defense under rule 94 of the Texas Rules of Civil Procedure. Tex. R. Civ. P. 94. Unless established as a matter of law, the burden is on the party asserting fraud not only to plead the