Scurlock Oil Co. v. Getty Oil Co.

324 So. 2d 870, 53 Oil & Gas Rep. 352, 1975 La. App. LEXIS 4385
CourtLouisiana Court of Appeal
DecidedDecember 29, 1975
DocketNo. 5258
StatusPublished
Cited by7 cases

This text of 324 So. 2d 870 (Scurlock Oil Co. v. Getty 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
Scurlock Oil Co. v. Getty Oil Co., 324 So. 2d 870, 53 Oil & Gas Rep. 352, 1975 La. App. LEXIS 4385 (La. Ct. App. 1975).

Opinion

HOOD, Judge.

This action was instituted originally as a concursus proceeding by Scurlock Oil Company, the purchaser of condensate from a unit well in St. Landry Parish. A claim for a part of the proceeds due for condensate was made by defendant Robert L. Waterbury, and a conflicting claim for the same proceeds was made by a group of defendants referred to as the “Bauman Group.”

We held when this case was before us earlier that the Bauman Group was entitled to the proceeds which were in dispute. Scurlock Oil Company v. Getty Oil Company, 278 So.2d 851 (La.App. 3 Cir. 1973). The Supreme Court reversed, holding in effect that Waterbury was entitled to those proceeds, and that judgment is now final. The Supreme Court, however, remanded the case to the trial court solely for the purpose of terminating “all controversies over well costs and operating expenses.” 294 So.2d 810 (La.1974).

After the case was remanded pleadings were filed by the Bauman Group and by Getty Oil Company claiming reimbursement for drilling costs and operating expenses. By stipulation of interested parties, the claim of Getty was paid from the accumulated proceeds. The claim of the Bauman Group for reimbursement of well costs and operating expenses was opposed [872]*872by Waterbury, and after trial judgment was rendered by the district court in favor of the Bauman Group, directing that it be paid the sum of $18,725.58, with interest, from the above proceeds, and casting Waterbury for costs. Waterbury appealed. The case is before us now on that appeal.

A companion concursus proceeding was filed by Louisiana Intrastate Gas Corporation, the purchaser of gas produced from the above units, and that suit was consolidated for trial and appeal with the instant case. The same issues are presented in the companion suit as are presented here, and substantially the same judgment was rendered in that case as was rendered in this one. Waterbury appealed in both cases. We are rendering judgment in the companion suit on this date. See Louisiana Intrastate Gas Corporation v. Waterbury, 324 So.2d 880.

The following questions are presented: (1) Has R. L. Bauman, one of the claimants in the Bauman Group, forfeited his right to recover well costs and operating expenses because of his alleged failure to comply with LSA-R.S. 30:103.1 and 103.-2? (2) Does the evidence support the award made to the Bauman Group by the trial court for drilling costs and operating expenses? (3) Are parties other than R. L. Bauman, the “Unit Operator,” entitled to recover well costs?

Some of the facts pertinent to the issues presented here were set out in judgments heretofore rendered by this court and by the Supreme Court, and we refer to those judgments for a more detailed recitation of the facts. See the cases already cited, and also House v. Tidewater Oil Company, 219 So.2d 616 (La.App. 3 Cir. 1969), and Louisiana Intrastate Gas Corporation v. Waterbury, 278 So.2d 863 (La.App. 3 Cir. 1973).

On July 29, 1954, Burice C. Bihm executed a mineral lease in favor of F. J. Muller, covering a six acre tract of land in St. Landry Parish. On the next day, July 30, 1954, Adler V. LeDoux and James Pitre executed a mineral lease in favor of Muller covering an adjoining 152 acre tract in that parish. Shortly thereafter Muller assigned both of those leases to Tidewater Oil Company (now Getty Oil Company). These leases are referred to sometimes as the “Waterbury leases.”

Effective March 1, 1959, the Commissioner of Conservation created a 320-acre drilling unit, known as the “Cockfield 2 Sand Unit No. 21-2,” which included a part of the surface acreage covered by both of the above leases, as well as part of the surface of an adjacent tract owned by Robert L. Waterbury. The unit controlled production from only one sand, called the Cockfield No. 2 Sand.

Early in 1960 Tidewater drilled and completed the R. L. Waterbury Unit 21-2 well on property owned by Waterbury and located in the above unit. The well produced until August 6, I960, when it was abandoned. Waterbury, an experienced oil operator, undertook to rework the well, and he restored production from it on November 25, 1960, which was 111 days after the well had been ' abandoned. A dispute arose between Waterbury and other landowners as to whether the “Waterbury leases” had been forfeited because of the failure of the lessees, or their assignees, to commence reworking operations within 90 days of the cessation of production, as provided in those leases.

On June 5, 1961, Tidewater executed an instrument releasing from the above mentioned leases, all of the property affected' by those leases, other than the acreage included within the boundaries of the Cock-field No. 2 Sand Unit.

On June 23, 1961, Burice C. Bihm executed a mineral lease in favor of Vernon J. Main, Jr., affecting the same six acre tract which he previously had leased to Muller. And, on the same date Adler V. LeDoux and James Pitre executed a lease in favor of Main affecting the 152 acre tract they had leased to Muller. Shortly [873]*873thereafter, Main transferred both of those leases to the “Bauman Group”. All parties concede that the Bauman leases were “top leases,” and that they would become effective only if and when the Waterbury leases were cancelled or terminated. There, of course, was a serious controversy at the time those leases were executed as to whether the Waterbury leases had been terminated by the lessee’s failure to conduct reworking operations timely. The Bauman Group took the position that the Waterbury leases had been forfeited, and that the later Bauman leases thus were the only valid leases affecting the property in dispute.

After the Bauman Group acquired the above mentioned “top leases,” they drilled a well on a part of the 152 acre tract which was included in the above unit. That well, known as the “Adler V. Le-Doux No. 1 Well,” was completed in November, 1961, and condensate and gas have been produced from that well since that time.

On November 20, 1961, Tidewater transferred the “Waterbury leases,” which it had acquired from Muller, to Aladdin Oil Company, Inc., and shortly thereafter Aladdin transferred both of those leases to defendant Waterbury, insofar as they covered property in the 320-acre unit, and insofar as those leases affected the Cockfield No. 2 Sand.

On September 6, 1962, the lessors in the Waterbury leases sued Tidewater, Waterbury and Aladdin, to cancel the leases which Waterbury acquired from Tidewater on the ground that reworking operations had not been started within 90 days after the wells ceased to produce on August 6, 1960. That case was not decided finally until several years later. While it was pending a serious question existed as to whether the Bauman Group or Waterbury had valid leases affecting the land on which the well was drilled.

The Louisiana Department of Conservation, after having created “Cockfield 2 Sand Unit No. 21-2,” effective March 1, 1959, issued the following additional orders relating to drilling and production units affecting the property in dispute here:

(1) Order No. 257-A-4, effective January 1, 1962, dissolving Unit 21-2 and creating Cockfield 2 Sand Unit 23-2, specifying that the Adler V. LeDoux Well No. 1 is the unit well, and appointing R. L. Bauman as operator of Unit 23-2. This unit was dissolved effective January 1, 1963.
(2) Order No.

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Cite This Page — Counsel Stack

Bluebook (online)
324 So. 2d 870, 53 Oil & Gas Rep. 352, 1975 La. App. LEXIS 4385, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scurlock-oil-co-v-getty-oil-co-lactapp-1975.