Practical Law Glossary Item w-029-0755 (Approx. 2 pages)
Glossary
Special Limitation (US)
In oil & gas leases, a special limitation is a clause that limits the duration of the interest conveyed by stating a period or event, the occurrence of which results in the automatic termination of the mineral leasehold estate and an automatic reversion to the mineral owner/lessor. It is distinguished from a condition subsequent and a covenant. Events triggering lease termination in some jurisdictions include the:
Failure to produce oil and gas in paying quantities.
Lessee not drilling or beginning reworking operations within a specified time.
Lessee failing to pay shut-in royalty as required by the lease.