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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