Lillie M. Clifton v. R. W. Koontz

Summary

The Texas Supreme Court affirmed the Court of Civil Appeals, holding that the oil and gas lease remained in force because production in paying quantities had not ceased, that depreciation is not an operating expense for that determination, that overriding royalties must be included in income, and that there is no separate implied covenant to explore beyond the covenant to develop. Accordingly, the respondents were not required to drill a second well and no damages were awarded.