Coon v. Placid Oil Co.

493 So. 2d 1236
CourtLouisiana Court of Appeal
DecidedAugust 29, 1986
Docket85-296
StatusPublished
Cited by21 cases

This text of 493 So. 2d 1236 (Coon v. Placid Oil Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coon v. Placid Oil Co., 493 So. 2d 1236 (La. Ct. App. 1986).

Opinion

493 So.2d 1236 (1986)

Thomas William COON, et al., Plaintiffs-Appellees-Appellants,
v.
PLACID OIL COMPANY, et al., Defendants-Appellants-Appellees.

No. 85-296.

Court of Appeal of Louisiana, Third Circuit.

August 29, 1986.
Rehearing Denied September 24, 1986.

*1238 Gold, Simon, Weems, Bruser, Sharp, Sues & Rundell, Henry B. Bruser, III, Alexandria, for plaintiffs-appellees-appellants.

W. Timothy Allen, III and J. David Garrett, of Blanchard, Walker, O'Quin & Roberts, Shreveport, for defendants-appellants-appellees.

Speedy O. Long, Trout, for plaintiffs-appellees.

Gaharan and Wilson, Joseph Wilson, Jena, for defendants-appellees.

Before KNOLL, KING and BRUNSON[*], JJ.

KNOLL, Judge.

Thomas W. Coon (hereafter Coon), Charles Kelly and Katherine Kelly (hereafter the Kellys) sued Placid Oil Company (hereafter Placid) and Justiss Oil Company (hereafter Justiss) seeking damages for the loss of future oil production from the Kelly # 2 Well, surface damages, mental anguish and inconvenience caused by the May 22, 1981, blowout of Placid's neighboring RGR # 4 Well. The trial court awarded damages against Placid and in favor of Coon for loss of future income in the amount of $724,402, and in favor of the Kellys for loss of future income, surface damages, mental anguish and inconvenience in the amount of $145,775; the claims of Coon and the Kellys against Justiss were dismissed. Placid was also assessed with costs to include plaintiffs' expert witnesses in the sum of $24,000.55.

Coon and the Kellys appeal the trial court's dismissal of their claims against Justiss. Placid appeals contending that the trial court erred: (1) in awarding Coon and the Kellys speculative damages for the loss of future oil production from the Kelly # 2 Well; (2) in finding the blowout of its RGR # 4 Well was the proximate cause of damages to the Kelly # 2 Well; (3) in its factual findings that the Kelly # 2 Well could not be reworked, and that a replacement well could not have been drilled on the Kelly property after the blowout of the RGR # 4 Well; (4) in awarding the Kellys surface damages, and damages for their mental anguish and inconvenience or, in the alternative, that the award was excessive; and (5) in awarding Coon and the Kellys expert witness fees totalling $24,000.55.

FACTS

The Kelly # 2 Well was drilled in the Rogers Field which is located in southern LaSalle Parish. The subterranean oil sands in the Rogers Field are referred to as the: (1) K-2 Cockfield Sand (approximately 1400 feet deep); (2) K-3 Cockfield Sand (between 1488 and 1500 feet); and (3) Sparta S-2 Sand (between 1800 and 1850 feet).

Completion in the Sparta S-2 zone of the Rogers Field was first accomplished in 1958 when Nebo Oil Company drilled the Nebo-Fee # 91 in the center of the NE/4 of the NW/4 of Section 8, T6N, R3E. At the time of trial, # 91 was still in commercial production and had produced 150,000 barrels of oil. In 1958 Nebo also drilled the John Howard-Whatley # 1 Well; this is the Kelly # 1 Well Coon attempted unsuccessfully to rework on the Kelly property before drilling Kelly # 2. The John Howard-Whatley Well was originally completed in the Sparta S-2 Sand approximately 800 feet west of # 91, and although it produced 35 barrels of oil in a test of the S-2 Sands, it never achieved sustained commercial production. Even though moving up hole in the John Howard-Whatley Well to the Cockfield K-2 zone produced 5 to 8 barrels of oil, no commercial production resulted.

After abandoning the John Howard-Whatley Well, Nebo paid in-lieu royalty payments to the lessors pursuant to the lease in an amount equivalent to 1/8 the production of # 91; these in-lieu payments continued until the latter part of 1964.

In 1967 Bodcaw, the successor to Nebo and the predecessor to Placid, drilled Bodcaw Fee # 126 and # 127 in the Sparta zone *1239 to offset production of Cenla Oil Inc.'s two wells, Cenla-Norris # 1 and Cenla-Norris # 2, in the SE/4 of the NW/4 of Section 8.

Between 1967 and the completion of the Kelly # 2 Well in 1981 no wells were completed by Placid in the Rogers Field Sparta zone.

In May 1980 the Kellys granted Coon an oil, gas and mineral lease on the 16 acres they own in the Northwest Quarter of the Northwest Quarter of Section 8, T6N-R3E, LaSalle Parish, Louisiana.

Coon first attempted to re-work the John Howard Whatley # 1 Well, renamed the Kelly # 1 Well, which the Nebo Oil Company originally drilled and abandoned in 1958. After failing to reach his zone of interest because of scrap metal and concrete encountered at the 1400 foot level of the Kelly # 1 Well, Coon drilled a new well, the Kelly # 2, 200 feet south and 100 feet west of the northeast corner of the Kellys' property. In November 1980 Coon completed the Kelly # 2 Well in the Sparta S-2 Sand at the level of 1838 to 1842 feet. Coon produced 3,080 barrels of oil from November 1980 through early May 1981 while experiencing mechanical problems caused by sand produced with the oil. The sanding problem became economically unfeasible at the S-2 zone, so on May 5, 1981, Coon set a cast iron bridge plug, came up the well hole and perforated the Cockfield K-3 Sand at the level of 1,488.5 to 1,490.5 feet. Almost immediately the well produced gas from the K-3 zone which was flared to the atmosphere from May 6, 1981, to May 14, 1981. On May 20, 1981, Coon reopened the well to flare gas.

When the Kelly # 2 Well was potentialed at 100 barrels a day, shortly after perforating in the Sparta S-2 zone, Placid commenced drilling RGR # 3 900 feet east of Kelly # 2 to prevent possible drainage by Kelly # 2 from the oil reservoir.

On May 20, 1981, Justiss began drilling on a day work contract Placid's RGR # 4 Well, another offset well, approximately 450 feet southeast of the Kelly # 2 Well. On May 22, 1981, after drilling to a depth of 1,832 feet, the RGR # 4 Well blew out of control and forced Coon to shut in the Kelly # 2 Well which had been flaring gas. The effects of the blowout caused extensive surface cracking and cratering between the RGR # 4 Well and the Kelly # 2 Well. Gas, water, sand and mud were pushed to the surface and several geysers erupted on the Kelly property. On a line that ran northwest to southeast between the two wells, cracks opened up spewing fluids and gas. Numerous large craters opened in the area, as well as one which occurred near a stream bed that flowed through the Kelly property; the stream bed sanded in one mile in either direction of the crater. Although there were surface cracks 50 to 70 feet from the Kelly # 2 Well, there were no craters immediately adjacent to that well. By May 29, 1981, Placid killed the blowout, and plugged and abandoned its RGR # 4 Well. Placid filled the various holes on the Kelly property, spending in excess of $20,000 on the work. After the blowout of RGR # 4 Coon neither reentered the Kelly # 2 Well nor was any other well drilled by him on the property he leased from the Kellys.

DAMAGES

The jurisprudence has generally denied damages resulting from oil well blowouts because such damage awards are too speculative. In the present case, the trial court concluded that Coon and the Kellys proved damages to the underground strata of this well to a legal certainty sufficient to base a damage award.

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Bluebook (online)
493 So. 2d 1236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coon-v-placid-oil-co-lactapp-1986.