PENNSYLVANIA OIL AND GAS LEASES IN BANKRUPTCY: REJECTION SHOULD OCCUR ONLY BEFORE PRODUCTION

ZACHARY D. BOMBATCH

Where state law governs whether an oil and gas lease conveys an estate in real property or only grants a license or easement for extraction of oil and gas, and a recent Pennsylvania Supreme Court decision holds that oil and gas leases convey oil and gas interests in fee simple determinable upon production, rejection of an oil and gas lease in bankruptcy should only occur prior to the production of oil and gas.

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