THE PERILOUS LIFE OF AN OIL AND GAS LEASE

Abstract

The petroleum and natural gas lease is an attempt to strike some sort of balance between the owner and producer of minerals: those inconsiderate subterranean itinerants that defy conventional legal definitions of property. But the judicial fate of petroleum leases reviewed by the courts to date has been such as to make the Perils of Pauline pale in significance. John B. Ballem examines twenty-five cases involving three critical areas where an oil and gas lease may be terminated that present a consistent, if ominous, pattern from which to draw conclusions about the perilous life of a lease. The author observes that, while the mineral lessee has often been the author of his or her own misfortune, where the lessee has started out with the initial advantage of having prepared a document to suit his or her own needs, the intervention of the courts has more than counterbalanced the issue in favour of the lessor.