Macpherson Oil Co. v. Smoot CA5

BACKGROUND

Jim C. Smoot and Luise Smoot owned two parcels of property, including the mineral interests, within an oil field. These parcels were subject to two oil and gas leases, the “Coffee-Marland Lease” and the “Hubbell Spafford Lease.” The two leases were owned by McAdams.

All further statutory references are to the Code of Civil Procedure unless otherwise stated.

2. In 1996, McAdams filed a lawsuit against Jim Smoot regarding these leases. The parties resolved this lawsuit in September 1998 by a settlement, compromise and release agreement. Included within this agreement is a provision that gives Jim Smoot “a right of first refusal to purchase” the Coffee-Marland Lease and the Hubbell Spafford Lease if McAdams proposes to sell these either or both of them. This right of first refusal requires McAdams to provide “at least 72 hours’ advance written notice” to Jim Smoot “(or such other person as he or his executor, personal representative, heirs or assigns may designate from time to time by written notice to McAdams) providing all of the terms of the proposed sale and identifying the buyer, and Mr. Smoot shall have 72 hours from time of receipt thereof in which to…