92 So. 3d 436
La. Ct. App.2012Background
- Casons own a 68-acre lease tract between Red River and Loggy Bayou in Red River Parish; Pride Oil & Gas initially leased 7,200 acres including the tract in 2005, with primary term ending May 31, 2010.
- Lease clauses: (1) continued if lessee engaged in drilling operations; (2) right to access adjacent lands for roads/pipelines; (3) assignability of lease rights.
- Assigns chain: Pride to EnCana (2007); EnCana to SWEPI (2007); EnCana/SWEPI to Empress (2009); Empress holds sublease rights; unitization order HA RD SUO in 2009.
- May–June 2010: Empress’s contractors entered the lease tract, cleared land, and began road/well pad work without prior One Call clearance, while Casons later leased the tract to Goodrich Petroleum but Empress continued work on Cason 24.
- Casons sued (Aug. 17, 2010) seeking declaration that Pride lease expired, damages for trespass, and injunction; Empress sought injunctive relief to protect its lease rights and pipeline construction.
- District court granted Empress a preliminary injunction, with bond; Casons appeal challenging the sufficiency of operations and the injunction itself.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Empress commenced drilling operations to extend the lease. | Casons: no operations; no permit; limited activity; de novo review requested | Empress: preliminary acts constitute commenced operations; deference to trial court | Empress engaged in operations; trial court did not abuse discretion |
| Whether Empress had rights to lay a pipeline in Section 13 via adjacent lands clause. | Casons: adjacent lands clause does not reach Section 13; rights limited to Section 24 | Empress: partial assignments do not sever adjacent lands rights; Section 13 included | Empress had right to lay pipeline in Section 13 under adjacent lands clause |
| Whether the preliminary injunction was proper and supported by irreparable injury and likelihood of success. | Casons: no interference; irreparable injury not shown | Empress: irreparable injury and likelihood of success shown; proper for status-quo relief | Preliminary injunction affirmed; district court did not abuse discretion |
| Whether the district court properly handled exceptions and procedural devices. | Casons: improper summary proceedings, lack of joinder, no cause of action | Empress and movants: summary procedure appropriate; joinder proper; no error | Rulings on exceptions and procedures affirmed |
Key Cases Cited
- Allen v. Continental Oil Co., 255 So.2d 842 (La.App. 2 Cir.1971) (commencement of operations may include pre-drilling acts with bona fide intent to proceed)
- Crye v. Giles, 200 So.2d 155 (La.App. 2 Cir.1941) (sufficient operations to maintain a lease include preliminary acts)
- Hilliard v. Franzheim, 180 So.2d 746 (La.App. 3 Cir.1965) (staking, permits, moving equipment may satisfy commencement)
- Breaux v. Apache Oil Corp., 240 So.2d 589 (La.App. 3 Cir.1970) (board road and turnaround as commencement of operations)
- Pilkinton v. Ashley Ann Energy, 77 So.3d 465 (La.App. 2 Cir.2011) (summary of permissive scope of commencement; permits alone not enough)
- Caskey v. Kelly Oil Co., 737 So.2d 1257 (La.2000) (adjacent lands clause recognized as valid)