Assignor’s Rights and Obligations Under Oil and Gas Lease Were Extinguished Through Assignment to Another Lessee.

Plaintiffs, the owners of a farming company, entered into an oil and gas lease with an energy company. The lease granted the energy company the right to lease the property for five years and the option to extend the lease for an additional five-year term under the sale lease terms and conditions. Two years into the lease, the energy company assigned its rights under the lease to an oil exploration company. Six years after the initial lease term began, the exploration company filed an affidavit in the county official records stating that the lease had been extended for a second five-year term. The Plaintiff filed an action against both the exploration company and the energy company, alleging claims of slander of title and tortious interference with business relations.  The complaint alleged that the energy company retained an interest in the lease under the terms of the assignment. The court dismissed the action against the energy company, finding that the energy company’s rights in the lease were extinguished through the assignment contract. The court refused to grant relief to the exploration company by tolling the terms of the lease pending final disposition of plaintiff’s claims. The court found that to do so would be premature because the underlying merits of the plaintiff’s claims were not yet resolved. Feisley Farms Family, L.P. v. Hess Ohio Res., LLC, No. 2:14-cv-146, 2014 U.S. Dist. LEXIS 118519 (S.D. Ohio Aug. 25, 2014).

 

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