Court Issues Permanent Injunction Against Bitcoin Mining On Oil And Gas Lease

In Roy Flowers v. Persist Oil and Gas Inc., the Court of King's Bench of Alberta issued a permanent injunction precluding the defendant from operating a Bitcoin mining operation, based on the failure of the underlying lease agreement to allow those operations.

Background

The plaintiff was the fee simple owner of land under which the defendant was assigned a lease that consisted of a 3.14-acre oil and gas compressor site and access road. The lease agreement allowed the leased premises to be used for "any and all purposes and uses as may be necessary for the exploration, development and production of oil, gas, related hydrocarbons or substances produced in association therewith...." The initial term of the lease was 10 years with a renewal period, which ended on November 12, 2019. The defendant attempted to negotiate a further renewal of the lease but was unsuccessful, and the parties never agreed to a renewal.