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Tendering a Lease Renewal Payment

By Greg Russell

The U.S. District Court for the Southern District of Ohio, Eastern Division, recently held that a producer's tender of a renewal payment was sufficient under Ohio law to hold the relevant lease despite the lessor's claim that he never received the payment itself.  See Phillips Exploration, Inc. v. Reitz, Case No. 2:11-CV-920 (Dec. 18, 2012).  The court also rejected the lessor's argument that the lease was void as against public policy because the renewal/extension language of the lease amounted to the creation of a perpetual lease.

If you face these issues, you may find the court's decision instructive.

Tags: Energy

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