Trimble v. Hope Natural Gas Co.

• Decision Date: 20 June 1936
• Docket Number: 8137.
• Citation: 187 S.E. 331,117 W.Va. 650
• Parties: TRIMBLE et ux. v. HOPE NATURAL GAS CO.
• Court: West Virginia Supreme Court

187 S.E. 331

117 W.Va. 650

TRIMBLE et ux. v. HOPE NATURAL GAS CO.

No. 8137.

Supreme Court of Appeals of West Virginia.

June 20, 1936

Submitted May 13, 1936.

Rehearing Denied Sept. 1, 1936.

Syllabus by the Court.

1. Matters pertaining to the drilling of oil and gas wells, and to the producing of oil and gas are primarily within the sound discretion of the operator. As long as his procedure is in accord with standard methods he will not be interfered with by the courts. It is only when it seems evident that the procedure adopted by him is clearly prejudicial to the rights of the lessor, that he (operator) will be required by a court of equity to do otherwise.

2. In an oil and gas lease there is an implied covenant against permitting substantial drainage through wells on other land but such covenant does not apply to relatively slight drainage which is incident to exploration for oil and gas and to the production thereof after discovery.

3. In construing a written contract, a court may not consider the verbal testimony of one of the parties thereto as to what was his understanding of the meaning of the contract at the time it was executed.

Appeal from Circuit Court, Barbour County.

Suit by Hoffman Trimble and wife against the Hope Natural Gas Company. From an adverse decree, defendant appeals.

Affirmed in part; reversed in part, and remanded.

Kemble White, A. F. McCue, and H. M. Garrett, all of Clarksburg, for appellant.

Young McWhorter & Young, of Buckhannon (C. M. Murphy, of Philippi of counsel), for appellees.

MAXWELL, JUDGE.

This is an appeal from a decree of the circuit court of Barbour county imposing certain requirements on the lessee in an oil and gas lease.

The suit is prosecuted by Hoffman Trimble and Willa B. Trimble his wife, plaintiffs, against the Hope Natural Gas Company, defendant, and pertains to the gas production from a 156-acre tract of land in Barbour county, owned by Hoffman Trimble and operated for gas by the defendant. The production of gas is being carried on under an oil and gas lease which was executed by the Trimbles in 1925 to John C. Chidester, who assigned the same to the Grasselli Chemical Company, which company sold and assigned the lease to the defendant September 15, 1927. Along with the Trimble lease, the defendant acquired from the Grasselli Company the William L. Morrison lease of 98.8 acres, whereon the Grasselli Company immediately prior thereto had drilled a well which produced gas.

Subsequent to the completion of the Morrison well, and prior to the purchase by the defendant of the Trimble and Morrison leases, the defendant had made location for, and started to drill, a well on the Malissa Nutter farm of 74.4 acres under a lease which the defendant had acquired thereon for oil and gas development purposes. The Nutter, Trimble and Morrison lands adjoin.

Soon after the defendant acquired the Trimble and Morrison leases, Hoffman Trimble requested the defendant to drill on his land an off-set well to the Nutter well and an off-set to the Morrison well. Negotiations with the defendant not having proven satisfactory to the plaintiffs, they instituted this suit December 15, 1927. In their original bill, they alleged that the defendant was fraudulently draining gas from the Trimble land through the Nutter and Morrison wells. They prayed that the lease be canceled or, if that could not be done, that "the covenants of said lease, express and implied, be specifically enforced by requiring the said Hope Natural Gas Company to drill two wells," off-set to the Nutter and Morrison wells, respectively. A few days after the institution of this suit, and considerable time before the original bill was filed, the defendant made a location for a well on the Trimble land and proceeded at once to drill the same, bringing it into completion in the month of May, 1928. The defendant's answer to the original bill was filed in October, 1928. Depositions were taken both for the plaintiffs and for the defendant.

At April Rules, 1930, an amended bill was filed. The amendments deal particularly with the defendant's manner of operation of the said gas well No. 7184. It is alleged that the well was not properly completed, in that a "pocket" was not drilled below the gas producing sand and that nitro-glycerine was not exploded in the gas stratum. Further, it is alleged that in the manner of operating said well and measuring the gas produced therefrom, the defendant is dealing unfairly and unjustly with the plaintiffs. The enlargement of the prayer is that the defendant may be required to drill a pocket below the gas producing sand and to shoot the well; that the defendant may be required to drill another well as an off-set to the Morrison well, and to fully develop and operate the plaintiff's 156-acre tract by drilling one well thereon "to every twenty acres, or at least to every forty acres"; that the defendant be required to account to the plaintiffs for gas produced in said well at the price at which the said gas is sold by the defendant; and that account be rendered to the plaintiffs on the basis of measurement of 14.4 pounds of atmospheric pressure plus 8 ounces. There was an answer to the amended bill by the defendant, and the taking of depositions proceeded.

By a decree entered January 5, 1932, the circuit court of Barbour county dismissed both the original bill and the amended bill at the plaintiffs' cost. The dismissal did not involve an adjudication of the cause on its merits. The trial chancellor adopted the course he took because the suit had been instituted within a quarter-annum period for which the delay rental had been paid by the lessee to the lessors under the terms of the lease. On appeal, this court reversed the decree of the circuit court of Barbour county and remanded the cause for decision on its merits. Trimbell v. Hope Natural Gas Co., 113 W.Va. 839, 169 S.E. 529. We held that because fraudulent drainage was charged against the defendant, the plaintiff was not precluded from instituting the suit within a period for which delay rental had been paid. Subsequent to the remand and the taking of further testimony, the case was submitted for decision on the merits and was finally disposed of by decree of June 19, 1935. This appeal followed.

By that decree, the circuit court required the defendant, (1) To drill the well on the 156-acre tract, designated as well No. 7184, deeper, "by drilling to it a pocket next below the Benson sand to a depth below the bottom of the Benson sand in said well No. 7184, not less than twenty-five feet nor more than fifty feet."

(2) To shoot the said well in the Benson sand with not less than twenty nor more than forty quarts of nitro-glycerine.

(3) To promptly and skillfully prepare said well for operation and to operate the same in such manner, and that it should not be "pinched" more than other competitive wells.

(4) To drill and complete and put in operation another well for oil and gas purposes on said 156-acre tract, approximately eleven hundred feet south of the aforementioned well and four hundred feet from the W. L. Morrison line, and that the drilling of the additional well should be commenced promptly and proceeded with diligently; that such well should be drilled at least twenty-five feet below the Benson sand and shot with not less than twenty nor more than forty quarts of nitro-glycerine, and that the well, if productive, should be put in full operation.

(5) To provide opportunity for Hoffman Trimble to have continued access to said well No. 7184 and to the meter house thereto, and likewise to the additional well ordered to be drilled, and to its meter house.

(6) To pay to Hoffman Trimble the damages he has sustained for failure to drill a second well on his said land within a reasonable time after the drilling of well No. 7184, "to be computed on the settled production of the second well on said 156-acre tract of land, herein decreed to be drilled and completed and operated."

(7) To compute and pay royalty on the gas produced from the 156-acre tract on the basis of fourteen cents per thousand cubic feet of gas produced, the same to be measured at an atmospheric pressure of fourteen and four tenths pounds per square inch plus eight ounces, and that each item shall bear interest from the date it became due.

The Trimble, Morrison and Nutter wells produce gas from the Benson sand. This sand obtains its name from the owner of the farm, not far from the Trimble land, where this sand was first discovered as a gas producing sand of that general territory. For gas production it is a comparatively thin sand, having been found to be from 5 to 22 feet in thickness. It lies at variable depths of about 4,450 feet below the surface of the ground. For West Virginia gas territory, the Benson is denominated a deep sand. The great bulk of natural gas produced in West Virginia comes from depths of 1,500 to 3,000 feet. Gas sands are characterized as of high or low porosity. A sand of high porosity is a loose sand permitting large cubical content of gas and easy movement and flow thereof. A sand of low porosity is characterized by compactness with a correspondingly small cubical content of gas, the movement and flow whereof is retarded in direct ratio to the degree of compactness of the sand. Generally speaking, gas wells of large volume and low rock pressure are drilled in sands of high porosity, and wells of smaller volume and higher rock pressure are obtained from sands of low porosity. The deeper sands tend to higher rock pressure. The Benson sand wells have high pressure and comparatively low volume.

The three wells under discussion (the Trimble Nutter and Morrison) lie at the apexes of the angles of an approximate...