SCOTX Wrestles with Force Majeure Clause in Drilling Delay

Few would argue that a hurricane or a weather-related grid meltdown would qualify as an unforeseeable circumstance that could prevent someone from fulfilling a drilling lease. But a more difficult question is now before the Texas Supreme Court: Whether a wellbore collapse 60 miles from the leased site triggered the contract’s force majeure clause.

Lawyers for Point Energy Partners Permian, which signed a new lease with West Texas mineral owners after a drilling deadline was missed, said MRC Permian’s lease was voided when it failed a requirement to drill a new well every 180 days. Wallace Jefferson told the court during oral arguments Tuesday that choices made by MRC after the wellbore collapse, including moving a specific rig to other sites and miscalculating the date of the deadline, failed to preserve the lease.