E. B. Duncan Drilling & Well Servicing Co. v. Robinson Research, Inc.

147 So. 2d 95, 18 Oil & Gas Rep. 307, 1962 La. App. LEXIS 1418
CourtLouisiana Court of Appeal
DecidedOctober 26, 1962
DocketNo. 9769
StatusPublished

This text of 147 So. 2d 95 (E. B. Duncan Drilling & Well Servicing Co. v. Robinson Research, Inc.) 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
E. B. Duncan Drilling & Well Servicing Co. v. Robinson Research, Inc., 147 So. 2d 95, 18 Oil & Gas Rep. 307, 1962 La. App. LEXIS 1418 (La. Ct. App. 1962).

Opinion

HARDY, Judge.

This is a suit ex contractu, and plaintiff prayed for a money judgment alleged to be due as the balance under an agreement for the drilling of an oil and gas well, together with lien costs, attorney’s fees, etc. Under order of the court a writ of provisional seizure was issued and an oil and gas lease of defendant affecting certain described lands located in Red River and De Soto Parishes was seized. The answer of defendant, after denying the material allegations and claims of plaintiff’s petition, asserted a reconventional demand for damages resulting from plaintiff’s alleged breach of contract.

After trial there was judgment in favor ■of plaintiff in the sum of $7,636.00, less a credit of $3,500.00, with interest, attorney’s fees and the lien cost; further judgment recognizing plaintiff’s lien and privilege on the property provisionally seized, and, finally, judgment rejecting defendant’s re-conventional demand. From this judgment defendant has perfected a suspensive appeal. Plaintiff has answered the appeal seeking an increase in the amount of the judgment.

The resolution of this appeal depends exclusively upon the interpretation of the contract between the parties in the light of-the material and relevant facts.

Under date of June 25, 1958, the defendant, Robinson Research, Inc., as owner, and the plaintiff, E. B. Duncan Drilling & Well Servicing Company, Inc., as contractor, executed a printed form “Standard Drilling Contract” setting forth detailed provisions under which the contractor agreed to drill a well in search of oil or gas on a described location in the Bull Bayou Field of De Soto Parish, Louisiana. The lengthy and somewhat involved contract includes a multitude of general provisions and detailed specifications. We will restrict our recapitulation of the contract provisions to those which are appropriate to the established facts. The contract depth of the well was fixed at 2,900 feet, or the Paluxy formation, but restricted to a maximum depth of 3,000 feet. The cost of drilling was fixed at $2.00 per foot, compensation for work performed on a day work basis at $22.00 per hour and the stand-by time rate at $15.00 per hour. Additionally, compensation for shut-down time for the repair or maintenance of the contractor’s rig while performing day work was fixed at $250.00 per day. Plaintiff’s claim seeking recovery of the sum of $11,314.00 was comprised of three items:

(1). The sum of $4,000.00, representing $2.00 per foot for a minimum depth of 2,000 feet in accordance with the contract provisions;

(2). $6,314.00 representing compensation for 287 hours of day work performed at the rate of $22.00 per hour, and

(3). $1,000.00 for four days shut-in charges at $250.00 per day while the contractor’s rig was undergoing repairs while on a day work schedule.

Responsive to the items of plaintiff’s claims as above set forth, the district judge, for the reasons shown by his written opinion, rejected the claim for $1,000.00 [97]*97for the four day shut-in charge but allowed:

(1). Recovery in the sum of $2,136.00 for 1,068 feet actually drilled at $2.00 per foot; and

(2). $5,500.00 for 250 hours day work at $22.00 per hour.

The facts are that drilling operations were commenced on July 19, 1958; at a depth of 837 feet gas was encountered, but, on orders from defendant owner, plaintiff contractor continued drilling. During the early morning hours of July 21st, at a depth of 1,068 feet, plaintiff’s driller noted that he was losing circulation and left the location for the purpose of procuring an additional supply of mud or control materials. During his absence the well blew out and caught fire. After a brief period of time the fire was extinguished, but considerable effort was required through the use of control materials and a home-made blowout preventer to shut down the well.

Plaintiff’s statement, filed in evidence, shows that the well was sealed off on July 24th and remained shut in until drilling operations were resumed on or about August 11th. The same statement shows that on August 2nd the well was killed and plaintiff installed control equipment, including a manufactured blowout pre-venter. The period of time following the blowout on July 21st until drilling operations were resumed on August 11th was occupied by the contractor in bringing the well under control, effecting repairs to his drilling rig and machinery damaged by the fire, mixing mud and conditioning the hole for the resumption of drilling. The time employed by the contractor in the above described operations constitutes the bulk of his claim based upon day work and shut-in charges. After the resumption of drilling operations the contractor again encountered difficulty resulting from loss of circulation, and, after twenty-four hours effort in attempting to correct this condition, he notified the defendant owner, through its President, Mr. Randall, that he would be unable to complete drilling operations to the contract depth. Upon receipt of this information the contractor was instructed to complete the well at the depth of 1,068 feet, which operation he concluded on August 19th.

The opposed contentions of the parties may be briefly stated. Plaintiff urges that he complied with the original contractual provisions and that the difficulties encountered which prevented the completion of the well in accordance with the contract constituted abnormally difficult and hazardous conditions resulting from loss of circulation. On the other hand, defendant claims that the failure of normal completion of the well resulted from plaintiff’s breach of contract in neglecting to equip the rig with a blowout preventer and the further failure to maintain on hand and readily available an adequate and effective supply of control materials.

Inasmuch as both parties rely upon the original contract provisions in support of their opposed contentions, it is necessary that we examine such portions of the contract as are relevant to a determination of this issue.

Under Article 10.1 the contractor was obligated to perform all work under the terms of the contract with “ * * * due diligence and care and in a good and workmanlike manner * * Article 10.2, which is particularly important and upon which defendant heavily relies, reads as follows:

“Contractor shall maintain well control equipment in good condition at all times and shall use all reasonable means to control and prevent fires and blowouts and to protect the hole.”

It is the position of defendant that the above provision required the contractor to furnish a blowout preventer and to maintain readily accessible control materials designed not only to reduce excessive pressure but also to prevent loss of circulation. On behalf of plaintiff it is argued that the [98]*98above quoted provision is modified by a specification contained in Exhibit “A,” an addendum to the principal contract denominated as “SPECIFICATIONS AND SPECIAL PROVISIONS.” Plaintiff particularly relies upon Article 5 of the Exhibit which we regrettably find it necessary to set forth in full for the purpose of clarification :

“5. EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY CONTRACTOR

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147 So. 2d 95, 18 Oil & Gas Rep. 307, 1962 La. App. LEXIS 1418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-b-duncan-drilling-well-servicing-co-v-robinson-research-inc-lactapp-1962.