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 days when there was no actual production. The Texas Supreme Court did not address the issue of temporary cessation of production because the oil companies continued to adversely possess the mineral interests by drilling and operating the well after the temporary cessation production.  The lessees’ possession of the mineral estates in the cases was found to be adverse, and all the requirements of the three‑, five‑, and ten‑year statutes of limitations were met. The Texas Supreme Court found that the lessees acquired the same interest that they adversely and peaceably possessed, that is, the oil and gas leasehold estates as defined by the original leases. Those interests are fee simple determinable interests in the respective properties on the same terms and conditions as the original leases. The terms that made the original mineral estates “determinable” continue to apply to the fee simple determinable interests acquired by adverse possession.   This made particular sense to the Court because the alleged act of reverter occurred many years ago for which the statute of limitations was meant to foreclose.