Tide Water Associated Oil Co. v. Stott
United States Court of Appeals for the Fifth Circuit
159 F.2d 174 (5th Cir. 1947)
Tide Water (defendant), lessee of Stott's (plaintiff) land and most surrounding tracts sharing a common wet-gas reservoir, offered Stott the same unitization and recycling terms other royalty owners in the reservoir had accepted, which would have let her land participate in recycling operations recovering condensate from wet gas; Stott refused, since independent recycling wasn't feasible on her small tract alone, and instead sued for royalties on condensate removed from gas attributable to her land through the recycling operations conducted on neighboring, unitized tracts. The well on Stott's own land was conceded to be producing all it reasonably could. The trial court ruled for Stott, and Tide Water appealed.
Whether an oil and gas lessor who chooses not to participate in a lessee's reasonable unitization plan can maintain an action for damages to the leasehold resulting from the lessee's participation in the unit on adjoining tracts.