Palmer v. Bill Gallagher Enterprises, L.L.C.

Hill, J.:

Charles and Dolores Palmer granted a 2-year oil and gas lease on their farm in 1996. The lessee drilled one gas well on the property, but it has never produced any oil or gas. The lease has a minimum-royalty clause calling for the Palmers to receive at least $1,000 every year, beginning with the second year of the lease. The lease called for this minimum royalty to come either from production earnings or, if there was inadequate production, by the lessee paying the Palmers the difference. Every year, from 1998 through 2005, the Palmers received $1,000 from the lessee. Kansas courts…