Knighton v. Texaco Producing, Inc.

762 F. Supp. 686, 117 Oil & Gas Rep. 49, 1991 U.S. Dist. LEXIS 4763, 1991 WL 58800
CourtDistrict Court, W.D. Louisiana
DecidedMarch 11, 1991
Docket88-2662
StatusPublished
Cited by3 cases

This text of 762 F. Supp. 686 (Knighton v. Texaco Producing, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knighton v. Texaco Producing, Inc., 762 F. Supp. 686, 117 Oil & Gas Rep. 49, 1991 U.S. Dist. LEXIS 4763, 1991 WL 58800 (W.D. La. 1991).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

LITTLE, District Judge.

This court is not inclined to grant the relief requested by the plaintiffs. This conclusion has been reached after scrupulous attention at a five-day trial, review of our copious notes taken contemporaneously with the testimony of the many witnesses and arguments of counsel, examination of each admitted trial exhibit, study of the post-trial briefs, research of applicable primary and secondary legal source materials including, but not limited to, the authorities cited in the post-trial briefs, and review of the trial transcript. The fact that this opinion will neither comment upon the testimony of each witness nor flyspeck every brief should not be interpreted as an act of indolence or ennui. Quite to the contrary, this court has yet to see finer or more professional productions than those promulgated by the attorneys in these cases, all of which contributed to the presentation of legal issues in an orderly fashion, all of which were thoroughly studied. One need not however dwell at length on aspects of these cases which do not require consideration as they become moot upon determination of the primary issue.

I. The Tracts at Issue

Lodwick Lumber Company (Lodwick) owned a 640-acre tract in Bossier Parish, Louisiana. Lodwick Sold one-half of the minerals in the tract to the predecessors in title of the Commercial National Bank in Shreveport (CNB) in 1934. Those predecessors in title and Lodwick then granted a mineral lease on the 640-acre tract to Bellevue Oil Corporation (Bellevue). Texaco Exploration & Production, Inc., the current mineral lessee, derived that status from the progeny of Bellevue.

Lodwick liquidated and its assets were passed to its shareholders. The assets included minerals and the Texaco lease. The present status of title to minerals to 600 feet on the 640-acre tract in Bossier Parish is not subject to question. We cannot avoid setting forth the property descriptions of the four tracts located in Bossier Parish and the stipulated ownership of minerals, to a depth of 600 feet.

Tract 1 — 480 acres

W2 of SE4; E2 of SW4; S2 of SW4 of SW4; E2 of NW4 of SW4; all of Section 10; and NW4 of NE4; NW4; and N2 of SW4 all of Section 15; all in Township 19 North, Range 11 West, Bossier Parish, Louisiana, comprising approximately 480 acres.
Travis Group — 100%
(collectively a party defendant)

Tract 2 — 40 acres

W2 of NW4 of SW4; and N2 of SW4 of SW4; all of Section 10, Township 19 North, Range 11 West, Bossier Parish, Louisiana, comprising approximately 40 acres.
Lodwick Group — 50%
(collectively a party plaintiff) Commercial National Bank in Shreveport — 50%
(a party plaintiff)

Tract 3 — 80 acres

S2 of SW4 of Section 15, Township 19 North, Range 11 West, Bossier Parish, Louisiana, comprising approximately 80 acres.
*688 Lodwick Group — 50%
(collectively a party plaintiff) Commercial National Bank in Shreveport — 50%
(a party plaintiff)

Tract b — 40 acres

NE4 of SE4 of Section 10, Township 19 North, Range 11 West, Bossier Parish, Louisiana, comprising approximately 40 acres.
Travis Group — 50%
(collectively a party defendant) Commercial National Bank in Shreveport — 50%
(a party plaintiff)

A graphic is much more revealing.

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The sketch above is used by all parties and is admitted by stipulation. Joint exhibit 20.

Texaco is the target of claims by CNB, Ruth W. Knighton, et al. (the Knighton Group), and Margaret M. Wilhelm (Wilhelm). Wilhelm and the Knighton Group are sometimes referred to as the Lodwick Group. Wilhelm and the Knighton Group have also asserted a claim against George G. Travis, et al. (the Travis Group).

The crux of the plaintiffs’ claim against Texaco is that Texaco has not paid a proper royalty on minerals extracted from land in Bossier Parish, Louisiana. In a nutshell, the plaintiffs assert that they should receive a royalty on producing wells located on Tract 1. The defendants, on the other hand, contend that only mineral owners in Tract 1 should receive proceeds from production on Tract 1.

Our jurisdiction over these cases is without dispute. Each is pure diversity with amounts in controversy in excess of the minimum amount. Removal was proper, consolidation was efficient.

*689 It is not the intention of this court to pontificate in a Mitchner manner on minerals, exploration for minerals or governmental regulation of that industry. The court will, however, review some basic rules of Louisiana oil and gas law as a predicate to analyzing the case for the plaintiffs.

II. Basic Tenets of Louisiana Oil and Gas Law

Oil and gas were first discovered in this country in the middle of the 19th century. The extent of a property owner’s rights at that time was that an owner owned everything on, below, and above his property. This concept is commonly referred to as the “ad coelum doctrine.” Rigid adherence to the ad coelum doctrine would have exposed the landowner to liability for wrongful taking of oil and gas. For example, if a fugacious mineral from Tract A crept across the property line to Tract B where it was extracted by B’s owner, A would have had a claim for wrongful taking. To the same effect, if a vertical shaft well on Tract A sucked oil from a pool partially located under Tract B, then B would certainly have asserted a wrongful taking claim against the driller on Tract A.

To alleviate some of the problems posed by applying the ad coelum doctrine to fugacious minerals, a social solution much like that applied to ferae naturae was adopted called the rule of capture. See generally Pierson v. Post, 3 Cai.R. 174, 178 (N.Y.1805) (discussing pursuit of ferae naturae). Under this rule an owner has the right to conduct exploratory operations on his property and reduce the conquest to ownership. In so doing, no liability attaches to his actions should minerals acquired be drained from beneath the land of another mineral owner.

Louisiana recognizes the rule of capture. See generally Correlative Rights of Parties Owning Interests in Common Source of Supply of Oil or Gas, 17 Annual Institute on Oil & Gas Taxation 217 (1966); H. Williams, R. Maxwell, and C. Myers, Cases and Materials on the Law of Oil & Gas (1956); J. Lowe, Oil & Gas Law (2d ed. 1988); Nunez v.

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Related

Hilliard v. Amoco Production Co.
688 So. 2d 1176 (Louisiana Court of Appeal, 1996)
Knighton v. Texaco Producing, Inc.
988 F.2d 1209 (Fifth Circuit, 1993)

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Bluebook (online)
762 F. Supp. 686, 117 Oil & Gas Rep. 49, 1991 U.S. Dist. LEXIS 4763, 1991 WL 58800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knighton-v-texaco-producing-inc-lawd-1991.