Baumgartner v. Gulf Oil Corp.

Baumgartner (plaintiff) held an oil and gas lease on a tract within a larger area whose reserves had been depleted. The Nebraska Oil and Gas Conservation Commission ordered the area pooled into a unit for secondary recovery through water flooding, and every other working-interest owner signed the resulting agreement on fair and equitable terms; Baumgartner alone refused, and his tract was excluded from the pooled unit. Gulf Oil (defendant), the unit operator, then conducted the water flooding, which drained most of the recoverable oil from Baumgartner's excluded tract. Baumgartner's own witness conceded that without Gulf's flooding, there would have been no secondary recovery on his tract at all, and that independent development there would have lost him money given the depleted reserves. He sued for willful trespass, and the trial court awarded him the value of the drained oil; Gulf appealed.