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Texas Oil And Gas Leases Contain Separate And Distinct Implied Covenant To Further Explore After Lucrative Production., E. Joy Jackson Sparks

St. Mary's Law Journal

In Sun Exploration & Production Co. v. Jackson, the Texas Supreme Court held Texas oil and gas leases contain a separate and distinct implied covenant to further explore after lucrative production. A lease that grants an interest in oil and gas found beneath the ground surface holds several implied covenants. Once successful production begins on a leasehold, implied covenants arise to encourage cooperation between the lessor and the lessee. A covenant is a “promise” between two or more parties to perform or not to perform a specific act. A covenant may be expressly stated within a contract or implied by …