Session of 1999
         
HOUSE BILL No. 2409
         
By Committee on Federal and State Affairs
          
2-10
          
  9             AN  ACT concerning oil and gas leases; relating to implied covenants;
10             amending K.S.A. 55-223, 55-224, 55-225, 55-226, 55-228 and 55-229
11             and repealing the existing sections.
12      
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 55-223 is hereby amended to read as follows: 55-
15       223. (a) As a matter of Kansas public policy, all oil and gas leases and
16       subleases for the exploration, development and production of oil, gas or
17       other minerals, or any combination thereof, which are held by production
18       shall be presumed to contain, in addition to any expressed covenants
19       therein,:
20             (1) An implied covenant to reasonably explore and to develop the
21       minerals which are the subject of such lease; and
22             (2) an implied covenant to obtain reasonable production from each
23       well on the lease or to abandon and properly plug any well from which
24       reasonable production is not being obtained. Such implied covenant
25             (b) The implied covenants provided by subsection (a) shall be a bur-
26       den upon the lessee and any successor in interest.
27             Sec.  2. K.S.A. 55-224 is hereby amended to read as follows: 55-224.
28       (a) In any action in which relief is sought based upon breach or violation
29       by a lessee of an implied or expressed covenant of reasonable exploration
30       or of reasonable development of lands covered by an oil, gas or oil and
31       gas lease held by production, if the party who seeks such relief produces
32       competent evidence that: (a) (1) At the time such action is commenced
33       there is no mineral production pursuant to such lease from a subsurface
34       part or parts of the land covered thereby with respect to which such relief
35       is sought and (b) (2) initial oil, gas or other mineral production on the
36       lease commenced at least 15 years prior to the commencement of such
37       action, a presumption shall arise that the lessee has breached and violated
38       such covenant insofar as it relates to such subsurface part or parts of land.
39             (b) In any action in which relief is sought based upon breach or vi-
40       olation by a lessee of an implied or expressed covenant of reasonable
41       production, if the party who seeks such relief produces competent evi-
42       dence that one or more wells on the lease are being pumped less than 24
43       hours a day for 15 days each month, a presumption shall arise that the

HB 2409

2

  1       lessee has breached and violated such covenant.
  2             Sec.  3. K.S.A. 55-225 is hereby amended to read as follows: 55-225.
  3       The presumption presumptions established by K.S.A. 55-223 and amend-
  4       ments thereto may be overcome by the lessee proving by a preponderance
  5       of all relevant evidence that the lessee has fully complied with such the
  6       covenant.
  7             Sec.  4. K.S.A. 55-226 is hereby amended to read as follows: 55-226.
  8       If the court determines that the lessee has failed to comply with such a
  9       covenant provided by K.S.A. 55-223 and amendments thereto, the court
10       may grant the lessee a reasonable time in which to comply, or the court
11       may issue an order terminating the lessee's right to such the subsurface
12       part or parts as or the well or wells that are the subject of such the action.
13       The court may enter such other orders as the interests of the parties and
14       equity may require.
15             Sec.  5. K.S.A. 55-228 is hereby amended to read as follows: 55-228.
16       As created by this act, it shall be against Kansas public policy to provide
17       for a waiver of the presumption presumptions, established by K.S.A. 55-
18       223, and amendments thereto in any lease or sublease for the exploration,
19       development or production of oil, gas or other mineral, or any combi-
20       nation thereof.
21             Sec.  6. K.S.A. 55-229 is hereby amended to read as follows: 55-229.
22       This act shall not alter or affect substantive rights or remedies under any
23       such mineral leases under the common law or statutes of the state of
24       Kansas. The evidentiary presumption presumptions afforded by this act
25       shall be cumulative and in addition to all other substantive rights and
26       remedies in existence under the common law and statutes of this state on
27       the effective date of this act. 
28       Sec.  7. K.S.A. 55-223, 55-224, 55-225, 55-226, 55-228 and 55-229
29       are hereby repealed.
30        Sec.  8. This act shall take effect and be in force from and after its
31       publication in the statute book.