Northern Natural Gas Co. v. L.D. Drilling, Inc.

Northern Natural Gas Company (Northern) (plaintiff) owned the rights to store its natural gas in the Cunningham Storage Field (Cunningham). L.D. Drilling, Inc. and Nash Oil & Gas, Inc. (defendants) drilled wells just outside of Cunningham in land called the expansion area. The defendants owned the right to produce native gas from the expansion area. In a separate proceeding, Northern was attempting to condemn the expansion area in order to include it as part of Cunningham. Northern brought suit against the defendants for nuisance, alleging that their wells were producing Northern’s stored gas, which was migrating from Cunningham. Northern presented gas-composition analysis, seismic data, and pressure data to support its claim. Northern also presented evidence that the pressure in Cunningham was stable until around the time that the defendants started drilling in the expansion area. Northern’s evidence indicated that some of the defendants’ wells were producing 100 percent storage gas, while other wells were producing as much as 85 percent storage gas. The defendants did not produce any evidence to contradict this evidence. Finally, in 2010, the Federal Energy Regulatory Commission (FERC) found that the defendants were in fact producing storage gas. Northern filed a motion for a preliminary injunction, seeking to enjoin the defendants from further gas production in the expansion area.