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Click here for the full text of this decision FACTS:The appellee, Mary Reeter, owned a portion of the surface estate where three mineral leases were located. She filed suit against the appellants, the operators under the leases, claiming that the leases had expired due to lack of production prior to her acquisition of the property. Reeter also alleged claims for breach of contract and for damages with respect to the manner in which the leases were operated. She filed a motion for partial summary judgment on her claims and sought to terminate the three leases. The operators did not respond to the motion. The trial court granted partial summary judgment on Reeter’s claim involving a lease designated as the “Day Lease” and entered an order severing out a portion of Reeter’s causes of action. HOLDING:The court affirms the trial court’s judgment, as set out in the trial court’s severance order, and holds that Reeter established her entitlement to summary judgment on the issue of the expiration of the Day Lease for lack of production. The court rejects the operators’ contention that that the trial court erred in granting summary judgment on Reeter’s breach of contract claim. The court points out that a summary judgment that does not dispose of all parties and issues in the pending suit is interlocutory and not appealable unless a severance is ordered. Under the express terms of the trial court’s severance order, only Reeter’s claims seeking the termination of the three leases were placed into a separate lawsuit and Reeter’s other claims, including the breach of contract claim, remained in the original lawsuit. Consequently, Reeter’s breach of contract claim was not a matter addressed in the judgment from which the operators appealed. The court holds that the summary judgment granted by the trial court on the breach of contract claim remains an interlocutory, unappealable order because it has not been severed from Reeter’s other causes of action and because it is not before the court. Accordingly, the court holds that it does not have jurisdiction to address the merits of the breach of contract issue. The court also rejects the operators’ claim that the trial court erred in finding that the Day Lease expired for lack of production. A clause in an oil and gas lease that the lease will continue after the primary term for so long thereafter as oil, gas or other minerals is “produced” is interpreted to mean “paying production” or “production in paying quantities.” A lessor seeking to establish that a lease terminated because of a “cessation of production in paying quantities” must meet a two-prong test: 1. that the lease failed to yield a profit over a reasonable period of time; and 2. that a reasonably prudent operator would not have continued to operate the well in the manner in which it was being operated for the purpose of making a profit and not merely for speculation. The operators argued that Reese’s summary judgment proof was deficient because she did not address any of the economic elements regarding the profitability of producing oil and gas from the Day Lease at any time. When there has been a “total cessation of production,” the two-prong “cessation of production in paying quantities” analysis does not apply. Reeter had alleged in her summary judgment motion that there was no production on the Day Lease from February 1998 through December 1998. She supported the allegation with the operators’ discovery responses and records from the Railroad Commission of Texas. Therefore, the court held, Reeter did not need to address the profitability of obtaining production from the Day Lease because she alleged a complete cessation of production for several months. The court holds that Reeter established her entitlement to summary judgment on the issue of the expiration of the Day Lease for lack of production. OPINION:Arnot, C.J.; Arnot, C.J., Wright and McCall, JJ.

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