Dupree v. Relco Exploration Co., Inc.
| Decision Date | 16 January 1978 |
| Docket Number | No. 13432,13432 |
| Citation | 354 So.2d 1083 |
| Parties | M. B. DUPREE, Plaintiff-Appellant, v. RELCO EXPLORATION CO., INC., et al., Defendants-Appellees. |
| Court | Court of Appeal of Louisiana — District of US |
Bethard & Davis, by Henry W. Bethard, III, James G. Bethard, Coushatta, for plaintiff-appellant.
Sholars, Gunby, Allbritton & Hayden, by Clifford L. Lawrence, Jr., Monroe, for defendants-appellees.
Before BOLIN, PRICE and HALL, JJ.
This is a suit by M. B. Dupree against James T. Walker and Relco Exploration Company, Inc., to partially cancel an oil, gas, and mineral lease for the alleged failure of defendants to adequately develop the leased property. From the judgment rejecting plaintiff's demands, plaintiff appealed. We affirm.
The facts are as follows: On August 20, 1971, Dupree granted an oil, gas, and mineral lease to Walker covering 485 acres in Red River Parish. The lease had a primary term of five years. On August 28, 1971, Walker assigned a three-fourths interest in the lease to Relco. In January 1973, defendants drilled a well on the leased property to test the Rodessa formation which proved to be a "dry hole." After that well was drilled, Lyons Petroleum, Inc., who was leasing other adjacent land from Dupree, completed a producing gas well in the Rodessa zone at 5,260 feet in September 1974. Lyons actually drilled to 10,280 feet and found no other commercial shows below the Rodessa. The conservation department thereafter established drilling units of 640 acres for this field, and eighty acres of the land leased to defendants by plaintiff were included in the unit on which the Lyons well was producing. Defendants participated in the cost of the drilling of the Lyons well in the proportion that the eighty acres of the subject lease had to the total unit acreage, and royalty has been paid to plaintiff applicable to the eighty acres since 1974 amounting to $8,846.55. In January 1976, defendants drilled an offset well on that part of the leased tract lying outside the Lyons-Dupree unit. This well was drilled to a depth to test all known producing zones in the area, and as no commercial production was attained, it was abandoned in August 1976. Suit was filed in January 1977 by plaintiff alleging that defendants' lease should be cancelled except as to the eighty acres included in the producing conservation unit. Plaintiff contends the primary term of the lease expired in August 1976, and since no development has occurred thereafter, the defendants have breached their obligation to properly develop the lease.
Plaintiff relies on the decision of this court in Nunley v. Shell Oil Company, 76 So.2d 111 (La.App. 2d Cir. 1954), in which we held that...
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