Oil and Gas – Construction of Lease-Dry Hole and Cessation of Production Clause

Newman Brothers Drilling Company obtained an oil and gas lease on land subject to a prior lease held by Stanolind Oil and Gas Company and under which a well commenced within the primary term had been completed as a dry hole after the expiration of the primary term. Forty-nine days after completion of the dry hole Stanolind commenced and completed a second well as a producer. Upon suit by Newman in trespass to try title and for declaratory judgment the court of civil appeals, reversing the trial court, held that the lease under which Stanolind claimed had terminated with the completion of the first well as a dry hole. On appeal to the supreme court, held, reversed, two judges dissenting. Stanolind Oil and Gas Company v. Newman Drilling Company, (Tex. 1957) 305 S.W. (2d) 169.