Davis Oil Company v. Steamboat Petroleum Corporation
Supreme Court of Louisiana
583 So. 2d 1139 (La. 1991)
Davis (plaintiff) became the court-appointed operator of a compulsory drilling unit that included part of Steamboat's (defendant) leasehold over Steamboat's objection; Davis drilled two dry holes, offered Steamboat the chance to participate (which Steamboat declined), and then billed Steamboat for a share of the drilling costs, which Steamboat refused to pay. The trial court found Steamboat not liable, the court of appeal reversed, and Steamboat appealed.
Whether a non-operating owner of a mineral interest is subject to liability for an operating owner's costs of development and operations within a compulsory drilling unit, except out of his share of production, if he does not consent to the operations.