Jackson v. American Natural Gas Co.

Citations

• 31 Pa. Super. 408
• 1906 Pa. Super. LEXIS 228

Syllabus

<p>Oil and gas lease — Lease—Rental—Forfeiture.</p> <p>An oil and gas lease covered 275 acres and was to continue for ten years, and as much longer as oil and gas were produced in paying quantities, with the right to drill for the same upon a stated royalty. The lease further provided that “in case no well is commenced within three months from date, then this grant will immediately become null and void as to both parties,” with a proviso that the lessee might prevent forfeiture from quarter to quarter and not longer, by paying a certain sum per quarter “ until such well was commenced.” The lease further provided that when “a well was completed the rental should be reduced a certain amount per quarter,” “and the well holds protection of ninety-one acres.” When the second well should be completed, the rental was to be further reduced to an amount stated per quarter, and when a third well was completed the rental was to cease, “ and it is understood each well holds for protection one-third of the two hundred and seventy-five acres.” Two wells were commenced within the required time, but the third well was never drilled. Held, that the lessee on the completion of the two wells had acquired an interest in two-thirds of the entire tract, and that he was bound to pay the amount of the reduced rental per quarter, which the lease provided should be paid upon the completion of the second well.</p>