The Court's decision in Seagull effectively makes all predecessors in title to an interest liable for breaches caused by a successive leaseholder unless they have presciently acquired express approval of their assignments. The interests in JOAs can be, and usually are, assigned numerous times. In fact, a leasehold interest in a JOA such as that being discussed here can be assigned dozens of times over the decades that a JOA may be effective. This decision, extending liability to all predecessors in interest, dramatically changes the liability landscape of a JOA, effectively making all predecessors in interest liable for the malfeasance of one successor in interest that may be several times removed from the initial or subsequent assignee.
Christopher S. Kulander & David W. Lauritzen,
A Flock of Trouble: Liability Under Oil and Gas Joint Operating Agreements After Seagull v. Eland,
Tex. Wesleyan L. Rev.
Available at: https://doi.org/10.37419/TWLR.V14.I2.3