Drilling Down on Termination Clauses in Oils and Gas Leases L.C. Neely Drilling, Inc. v. Hoosier Energy Rural Electrical Cooperative, Inc., 8 N.E.3d 251 (Ind. Ct. App. 2014)
The Indiana Court of Appeals recently issued an opinion explaining the difference between two common types of termination clauses in oils and gas leases. The first, known as a “drill or pay” clause, obliges the lessee to either commence production within a certain timeframe or pay advance royalties, but does not operate to automatically terminate the lease in the event…
