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1 Loy. L. Rev. 1 (1941-1942)
Implied Drilling Obligations in Oil and Gas Leases in Louisiana

handle is hein.journals/loyolr1 and id is 15 raw text is: LOYOLA LAW REVIEW Copyright, 1941, by Loyola University, New Orleans, La. VOLUME I MAY, 1941 NUMBER ONE IMPLIED DRILLING OBLIGATIONS IN OIL AND GAS LEASES IN LOUISIANA BY J. MORT WALKER, JR. T HE object of a landowner in leasing his land for mineral exploration is to receive a return in the form of rents or royalties. Since delay rentals' are usually nominal, or at least not comparable to what the landowner would receive if oil or gas were discovered on his land in paying quantities, his principal object is to secure the drilling of wells on his land. If he had his way, he would include in the lease an express agree- ment by the lessee to drill one or more exploratory wells within a stipulated time, an agreement, if oil or gas is found in paying quantities, to drill a certain number of additional wells within a stated time, an agreement to drill offset wells to protect the leased land from drainage by wells on adjoining lands within a stipulated distance of the leased land, and an agreement to market the oil or gas after production. But a lease with all these clauses designed for the protection of the landowner can- not be effected. The lessee will not assume such obligations because of the many unpredictable circumstances that may arise during the process of developing the land and which may require a departure from any set plan of development. In the earlier leases there was usually some form of express agreement to drill an exploratory well within a stipulated time or to commence a well within a stipulated time and prosecute the drilling with due diligence. In addition to such a clause some 1 Delay rental as the term implies is a periodic payment of money made by the lessee in an oil and gas lease to keep the lease in force without drilling a well. See 2 SUMMERS, LAW OF OIL AND GAs (1938) §§ 331, 334- 337.

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