Printable Format55-223. Implied covenant to explore and develop minerals established; burden upon lessee. As a matter of Kansas public policy, all oil and gas leases and subleases for the exploration, development and production of oil, gas or other minerals, or any combination thereof, which are held by production shall be presumed to contain, in addition to any expressed covenants therein, an implied covenant to reasonably explore and to develop the minerals which are the subject of such lease. Such implied covenant shall be a burden upon the lessee and any successor in interest.
History: L. 1983, ch. 181, ยง 1; April 14.
Law Review and Bar Journal References:
"Recent Developments in Kansas Oil and Gas Law," Philip E. DeLaTorre, 32 K.L.R. 595, 622, 623 (1984).
"Recent Developments in Kansas Oil and Gas Law (1983-1988)," Phillip E. DeLaTorre, 37 K.L.R. 907, 930 (1989).
CASE ANNOTATIONS
1. Implied covenant to develop, measured by reasonably prudent operator test, applicable to operators of unitized leases. Parkin v. Kansas Corporation Comm'n, 234 Kan. 994, 1009, 677 P.2d 991 (1984).
2. Implied covenant to explore and develop all oil and gas leases when none in lease. Adolph v. Stearns, 235 Kan. 622, 626, 684 P.2d 372 (1984).
3. Deep rights act examined; no constitutional infirmities noted. Amoco Production Co. v. Douglas Energy Co., Inc., 613 F. Supp. 730 (1985).
4. Constructive production created by payment of shut-in royalties, lessee's duty to diligently search for market examined. Robbins v. Chevron U.S.A., Inc., 246 Kan. 125, 131, 785 P.2d 1010 (1990).
5. Whether storage lease provisions excusing performance under oil and gas leases in good standing violated deep rights act examined. Thomas Well Service, Inc. v. Williams Natural Gas, 873 F. Supp. 474, 487 (1994).
6. Cited; analysis of cancellation of oil and gas lease for failure to begin exploration when no notice given. Lewis v. Kansas Production Co., 40 Kan. App. 2d 1123, 1125, 199 P.3d 180 (2009).
7. Free gas clause in lease requires a company to provide free, usable gas suitable for domestic use. Schell v. Oxy USA, Inc., 822 F. Supp. 2d 1125 (D. Kan. 2011).