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42 Tex. Tech L. Rev. 33 (2009-2010)
Big Money vs. Grand Designs: Revisiting the Executive Right to Lease Oil & (and) Gas Interests

handle is hein.journals/text42 and id is 35 raw text is: BIG MONEY VS. GRAND DESIGNS: REVISITING THE EXECUTIVE RIGHT TO LEASE OIL & GAS INTERESTS Christopher Kulander* I. INTRODUCTION TO EXECUTIVE RIGHTS: DEFINITION AND PURPO SE .......................................................................................... 33 II. ALIENABILITY OF THE EXECUTIVE RIGHT ...................................... 37 A . Case Law .............................................................................. 37 B. Legal Commentators ............................................................ 40 III. THE EXECUTIVE'S DUTY TO LEASE ................................................ 42 A. Introduction ............................................................................ 42 B. Manges & Its Progeny: A True Fiduciary Standard? ............ 43 C. Self-Dealing and the Reasonably Prudent Landowner Standard ................................................................................. 43 D. An Implied Covenant to Lease .............................................. 49 E. Conclusions and Solutions ................................................... 56 IV. THE EXECUTIVE'S DUTY TO NOT HARM THE VALUE OF THE M INERAL ESTATE ........................................................................... 59 A. Anti-Drilling Covenants ........................................................ 60 B. The Poison Pill ..................................................................... 63 V. THE DUTY OWED TO A NON-EXECUTIVE MINERAL COTENANT VS. A NONPARTICIPATING ROYALTY INTEREST (NPRI) OWNER ....... 64 A. Executive Duties and Nonparticipating Royalty Interest (NPRI) Owners ..................................................................... 65 B. Executive Duties and Mineral Cotenants ............................... 67 VI. SELF DEVELOPMENT BY NON-EXECUTIVE MINERAL OWNER ...... 71 VII. REVIEW AND CONCLUSIONS ........................................................... 74 I. INTRODUCTION TO EXECUTIVE RIGHTS: DEFINITION AND PURPOSE In Texas, a fee simple absolute ownership of the entirety of a parcel of land includes both a surface and mineral estate.' These two estates can be separated, as the Texas Supreme Court noted in Acker v. Guinn explaining * Associate, Energy & Power Practice Group, Haynes and Boone, LLC, Houston, Texas; licensed in New Mexico and Texas; B.S. (Geology) 1993, Wright State University; M.S. (Geophysics) 1995, Wright State University; Ph.D. (Geophysics-Petroleum Seismology) 1999, Texas A&M; J.D. 2005, University of Oklahoma College of Law. 1. Texas Co. v. Daugherty, 176 S.W. 717, 720 (1915); 1 ERNEST E. SMITH & JACQUELINE LANG WEAVER, TEXAS LAW OF OIL AND GAS § 2.1 (2d ed. 2000).

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