World Hospitality Ltd. v. Shell Offshore, Inc.

699 F. Supp. 111, 1988 WL 120403
CourtDistrict Court, S.D. Texas
DecidedNovember 11, 1988
DocketCiv. A. No. H-86-4670
StatusPublished
Cited by1 cases

This text of 699 F. Supp. 111 (World Hospitality Ltd. v. Shell Offshore, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
World Hospitality Ltd. v. Shell Offshore, Inc., 699 F. Supp. 111, 1988 WL 120403 (S.D. Tex. 1988).

Opinion

MEMORANDUM ON SUMMARY JUDGMENT

HUGHES, District Judge.

This case requires an ordering among a supplier, lease holder, drilling contractor, and lender of their priorities of interest in the disbursement of the proceeds from the drilling of two wells on the Outer Continental Shelf offshore Texas. The supplier prevails.

1. Parties.

A. Shell Offshore is the holder of a lease from the United States on the Outer Continental Shelf, and it hired Nordrill to drill two wells.
B. Nordrill is an offshore drilling contractor that operated two drilling rigs, the Steeler and the Gulfdrill; Nordrill is either a successor to 0 & U or a closely affiliated company.
[112]*112C. World Hospitality is a caterer to the offshore industry, supplying materials and labor to feed the offshore crews.
D. First City National Bank of Houston is a commercial bank. The bank had taken an assignment of the income from the Steeler to it from Nordrill. The bank had no assignment from the Gulfdrill.

2.Facts.

Shell holds a federal lease on the Outer Continental Shelf. The lease site is about nine miles seaward, to the southeast of Calhoun and Matagorda Counties, Texas. Shell had a master drilling contract with Nordrill. For each well the master agreement was supplemented by a drilling order, which added a specific well site, depth, and time under the general provisions of the master contract. The master contract was signed in December 1984, and the drilling order for the Steeler was dated in May 1985 and for the Gulfdrill in September 1985.

Before the master contract and before the drilling order for this well, in 1981, Nordrill assigned to First City the proceeds from the Steeler. The bank did not have an assignment from Nordrill for the Gulfd-rill. After the assignment, Nordrill began to drill the wells for Shell. World Hospitality supplied catering to both rigs, of which about $90,000 remains unpaid from the Steeler and $332,000 from the Gulfdrill. Shell has retained about $378,000 from the funds due on the Steeler’s work. World Hospitality has filed liens for the amounts due against the drill sites. '

In June 1986, Nordrill brought a suit in Jefferson County, Texas, to enjoin World Hospitality from asserting liens against the Shell tracts. From June 17 to October 20, 1986, World Hospitality was prohibited by court order from filing its liens against Nordrill and Shell. World Hospitality filed a lien affidavit with Minerals Management Service in New Orleans, Louisiana, in November 1986, and amended that in December. World Hospitality filed its lien affidavits in the property records of Calhoun County and Matagorda County in March 1987, within six months if the injunction period is ignored.

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699 F. Supp. 111, 1988 WL 120403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/world-hospitality-ltd-v-shell-offshore-inc-txsd-1988.