Gulf Oil Corporation v. E. L. Reid

Summary

The Texas Supreme Court held that the oil and gas lease terminated at the end of its primary term because there was no production in paying quantities during that term and the shut‑in royalty was not tendered timely. Accordingly, the lease could not be extended by the 60‑day cessation‑of‑production clause or by later payment of the shut‑in royalty, and the Court of Civil Appeals was erroneous in remanding on the issue of diligence. The modified judgment of the Court of Civil Appeals was affirmed.