A (hopefully) Humorous Case Study in a Certain Educational Institution’s Oil & Gas Lease, and the Complexities Therein

Being a native New Yorker I’m probably seen in these West Texas parts as a bit of a carpetbagger, but I can’t change where I’m from. With that said, in my several years living in Texas I’ve picked up on some things (among others) – Texas is the only state allowed to fly its flag at the same height as the U.S. flag; the Mexican food and barbecue is great; and, that I should not eat pizza or wings here (especially where they are called “buffalo wings,” which is anathema where I come from). One other such observation relates to a certain state educational institution that – I’m told – oft serves as the butt of various jokes, most of which call into question the general mental horsepower of those who attended and graduated from the institution in question. Now, as a resident Texan, I now humbly do my part to contribute to this lore (all names have been changed to protect the innocent):

A long time ago, in an oil producing haven far, far away, an acquisition company wanted to lease this institution’s minerals, it having obtained them from the estate of a person who, for the purposes of this tale, we will call Maggie. Maggie clearly wanted to benefit this institution for years after her passing, but what she did not realize was that decades later this institution would be utilizing one of the most onerous oil and gas leases this side of Interstate 45. Lyle Field worked for the institution and gave the company its lease form, bound by an industrial staple, and after a review that lasted several sunrises and sunsets, the company decided that it would like to propose some changes. Several fortnights later, Lyle responded and eventually an agreement was achieved. Unfortunately, when Lyle had the head honcho Tig Emmett execute the lease, Lyle did not notice Tig Em (Tig’s nickname around campus) failed to have his signature notarized before mailing it to the oil company. This was an easy fix, and a corrected version was sent back.

Weeks later, the company decided that it would like to sell its lease to a bigger company. A copy of the lease was wheeled over to the bigger company on a dolly, and it was discovered that the institution would need to consent to the sale of the lease in writing and include the information for the transfer agreement filed in the public records. However, there was a problem: another provision of the gargantuan document stated that an assignment or sale of the lease without the institution’s consent meant that the lease would automatically be null and void. What a quandary! To get the institution’s’ consent to assign necessitated a consent form which required information about the transfer and sale document, but upon executing the transfer and sale document the lease would be deemed terminated. What to do? When this conundrum was brought to Lyle’s attention, he agreed with the unusual inconsistency in the dueling provisions and a change was made. The transfer was made from the company to the bigger company, and everyone rode off into the sunset.

An unusual situation with this institution’s strange, titanic, and contradictory lease was punctuated by the fact that it was this particular institution at the center of the story, whose reputation surely proceeds itself – a rumor I’ve heard (although I cannot verify it) is that this institution was one of two to have its cut of state oil revenues from certain lands, and took 1/3 of the whole pie (to which the second institution is rumored to have appreciated this and taken the remaining 2/3). In any event, this story is offered in good fun and isn’t intended to stir the pot; but the lesson here, if there is one, is that there is probably some truth at the heart of some stereotypes…

Gig’em!

This article is also available at my LinkedIn page.