Pennington v. Colonial Pipeline Company

260 F. Supp. 643, 25 Oil & Gas Rep. 514, 1966 U.S. Dist. LEXIS 8186
CourtDistrict Court, E.D. Louisiana
DecidedNovember 18, 1966
DocketCiv. A. 2847
StatusPublished
Cited by7 cases

This text of 260 F. Supp. 643 (Pennington v. Colonial Pipeline Company) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pennington v. Colonial Pipeline Company, 260 F. Supp. 643, 25 Oil & Gas Rep. 514, 1966 U.S. Dist. LEXIS 8186 (E.D. La. 1966).

Opinion

WEST, District Judge:

This case arises out of a dispute between the alleged owner of an oil, gas and mineral lease covering 2,425 acres of land, and the owner of the fee title to 29 acres of the same land. Plaintiff, C. B. Pennington, claims to have acquired, among other things, the exclusive right to “investigate, explore and drill” for oil and gas on the 2,425 acres of land, including the 29 acres now owned by defendant Colonial Pipeline Company, by virtue of an oil, gas and mineral lease allegedly entered into on July 16, 1956, between him as lessee, and the then owner of the entire 2,425 acres, one T. L. Mills, Jr., as lessor. Subsequent to July 16, 1956, Colonial purchased from Mills a pipeline right of way, or servitude, across a portion of the Mills property on which it has since laid a 36 inch pipeline for the transmission of refined petroleum products, and on July 26, 1962, it also purchased from Mills the fee title to 29 acres of the property on which it ultimately erected certain pumping and storage facilities used in connection with its pipeline operations.

Pennington now wishes to conduct certain geophysical explorations on and under the property involved, including the 29 acres now owned by Colonial, and it is his position that because of the fact that his alleged oil and gas lease predates the acquisition of the 29 acres by Colonial, his rights are “ * * * prior in time and superior in law to the subsequently acquired rights of Colonial * * Thus it is Pennington’s contention that since he plans to locate certain seismic shotpoints on Colonial’s 29 acres, and that since, in his opinion, the location of these shotpoints on that property is essential to his obtaining reliable seismic information concerning the subsurface of the property, and since the location and operation of Colonial’s facilities on this property will interfere with his plan, Colonial must be ordered to shut down all operations on the property, drain all lines crossing the property, drain all storage tanks in the area, shut down all electrical service to the property, and if necessary, remove any structures that might interfere with the successful completion of his seismic survey of the property. Colonial, on the other hand, contends first that Pennington’s alleged mineral lease is actually no lease at all because it was never *645 signed by him as lessee, and secondly, that even if the lease is valid, the fact that it predates the date of Colonial’s acquisition of title to the property does not make the rights of the lessee superior in law to those of the landowner. It is Colonial’s contention that if a valid mineral lease exists, the rights of the lessee under the lease and the rights of the land owner must exist together and be exercised by each in such a manner as not to unreasonably interfere with the rights of the other. It is Colonial’s further contention that if, in fact, Pennington has a valid oil and gas lease, his proposed plan for geophysical exploration of the leased property is unnecessáry for a proper exercise of his lease rights, and amounts to an unreasonable interference with the exercise by Colonial of its rights as owner of the 29 acre tract.

As set forth in the pre-trial order, entered in the record of this case, the pertinent contested issues of fact are delineated as follows:

“(a) Whether defendant’s installation will interfere with the reasonable mineral exploration and development of the property:
“(1) from the standpoint of effective seismic operations,
“(i) because of interference by noise,
(ii) because of interference by vibrations, and
(iii) because of interference by electric current to prevent electrolysis of the pipeline; and
“(2) From the standpoint of safe seismic operations.”

And, as further set forth in the pretrial order, the pertinent contested issues of law are declared to be:

“(a) Whether the lease is valid though the lessee did not sign it.
“(b) Whether the mineral lessee, whose lease was of record before acquisition of the defendant, has legal priority to reasonably utilize his lease, and
“(c) Whether, as a matter of law, Colonial’s installations unreasonably interfere with any of Pennington’s rights under the alleged mineral lease.”

The remaining issues enumerated in the pre-trial order pertaining to the question of whether or not Colonial, as a common carrier, has a right of expropriation need not be discussed here as such a determination is not necessary to a proper disposition of this case.

During the course of this trial much expert testimony was heard by the Court concerning the feasibility, necessity, and reasonableness of the Pennington plan for geophysical survey of his lease, and much expert testimony was heard concerning the question of whether or not Colonial’s facilities and operations would unreasonably interfere with a reasonable exercise of Pennington’s rights under his alleged mineral lease. After seeing and hearing the evidence in this case, it is the opinion of this Court that to permit the plaintiff to carry out his plan of exploration precisely as outlined by him, and to require the defendant to shut down its operations, drain its pipelines and empty its tanks to permit him to do so, would constitute an unnecessary and unreasonable interference with the rights of the defendant as owner of the 29 acres of land involved. In compliance with Rule 52 of the Federal Rules of Civil Procedure the Court now makes the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. On July 16, 1956, an oil, gas and mineral lease was signed by T. L. Mills, Jr., as lessor, covering 2,425 acre of land owned by Mills and situated in East Feliciana Parish, Louisiana. The named lessee in this instrument was plaintiff herein, C. B. Pennington. The signature of the lessor, T. L. Mills, Jr., was witnessed by two witnesses, including one C. B. Pennington, Jr., but the named lessee, C. B. Pennington, did not sign the lease.

*646 2. This purported lease, signed only by the lessor Mills, and two witnesses, was recorded in the office of the Clerk and Recorder for the Parish of East Feliciana, Louisiana, on July 19, 1960.

3. The primary term of this lease was ten years, and since its inception plaintiff has paid the annual rental payments therein provided for.

4. On June 29, 1962, defendant Colonial acquired from the same T. L. Mills, Jr. a right-of-way for a pipeline to be laid across a portion of the 2,425 acre tract, and on July 26, 1962, Colonial acquired from Mills the fee title to approximately 29 acres of this tract upon which it intended to, and did, erect certain pumping and storage facilities to be used in connection with the operation of its pipeline.

5. At the time Colonial purchased the :29 acres from Mills, it was stated in the deed that “The above property is subject to an oil, gas and mineral lease dated July 16, 1956.

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Cite This Page — Counsel Stack

Bluebook (online)
260 F. Supp. 643, 25 Oil & Gas Rep. 514, 1966 U.S. Dist. LEXIS 8186, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennington-v-colonial-pipeline-company-laed-1966.