Tri M Petroleum Co. v. Getty Oil Co.; Ridgway v. Shell Oil Co.
United States Court of Appeals for the Fifth Circuit
792 F.3d 558 (5th Cir. 1986)
In Tri M Petroleum Co. v. Getty Oil Co., Getty Oil Company (Getty) (defendant) was the lessee in two oil and gas leases on tracts of land. Tri M Petroleum Company (Tri M) (plaintiff) acquired a top lease on the tracts of land. System Fuels, Inc. (System) filed a petition with the State Oil and Gas Board of Mississippi (Board) to unitize several tracts of land, including the Getty leaseholds. The Board granted System’s petition. Getty refused to participate in the drilling costs or to farmout its interest in the lands. System drilled a well within the unit, but not on Getty’s leasehold. The Getty leases’ primary terms expired. Tri M sued Getty, seeking cancellation of the Getty leases. Because of System’s drilling, the district court declined to cancel the Getty leases. Tri M appealed. In the separate case of Ridgeway v. Shell Oil Co., C.R. Ridgway (plaintiff) issued an oil and gas lease to Shell Oil Company (Shell) (defendant). Shell and Pursue Energy Corporation (Pursue) wanted to drill in the same general area. Shell and Pursue each filed a petition with the Board to unitize all lands within the area. The Board granted Pursue’s petition, which included the Shell leasehold, and denied Shell’s petition. Pursue drilled a well, but not on the Shell leasehold. The primary term of Shell’s lease expired. Ridgway sued Shell, seeking cancellation of the Shell lease. Because of Pursue’s drilling, the district court declined to cancel the lease. Ridgway appealed. Ridgway’s appeal and Tri M’s appeal were consolidated in the court of appeals.
Rule of Law
Holding and Reasoning (Politz, J.)
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