judgment and at that particular time the court sent this case back down to the district court and the directions was to address the issue of the injury in the first instance this court had recognized at the time of our first appearance that it was our position that the noncompliance with the contract called the p s a in this particular case impaired pons prospect of receiving world peace in the future disagreed with what the force or the did and when on basically to make a second finding consistent with their first thought and that particular finding is can be quickly the time of the p s a with petter attack which was the riginal purchaser of this property i would submit to the court and i believe the court recognized and first instance there was no dispute that there was to be a drilling of three well and in fact after trying drilled or began to drill one of the well taking it down some six thousand feet and taken across several thousand feet until it began to touch the property of my clients to touch the property for the first instance because the pad was located on adjacent piece of property unrelated my client's project after attempt was did would it was not diligence and doing this they of the tap for the transmission of the natural gas they however with beyond the initial one year period which was required and to that end they paid my client's one hundred thousand dollars for an extension of that on period and in fact they saw a second extension which was granted without compensation because of that particular time after executor already begun a drill down on the horizontal some six thousand feet and they were in at the process of obtaining a rig to do the lateral drilling which would take in fact there's a well on my client's pro surely there after stat or a which is now known by another name acquired this property and in fact in doing so that ended the effort on behalf of the owner of the property to do any further drilling to do any further exploration to do anything which would result in the in the generation of revenues from our client now let me draw a connection here that i think is critically important it appears to be a little bit of a jump but both of the experts which testified as to damages our experts said that it was approximately seven million dollars to drill each well over twenty one million dollars total that was mr right mr lamb calculated that it would be about eight million dollars per well or a total of twenty four million dollars now if we look at that if we take that valuation understanding that what we were asking and what the contract compel it was three wells were thought are twenty one or twenty four million dollars and the suggestion that there is new obligation that there is no compelling factor which would result production is simply destroyed by the costs attendant to drilling these three wells if you have twenty one or twenty four million dollars it let's take for it as an example an office building let's say this was not and gas but we had an obligation on the property that we sold for someone to build an office building spend twenty four million dollars and we would receive eighteen percent as we did in the cirrhotic rules of the result that office building herring that's what it is and i think i'm really at fault in the first appearance for not dealing with that in a more aggressive manner if you look at the entirety of the contract it talks about drilling three wells and it has sort of triggering events one of those trigger events the tap another is putting the wells another is you know production of that point what i'm telling the court is it's a red herring to say that that somehow spun is the magic star and  of the entire process to spot on to our property required drilling down six thousand feet and over several thousand feet before it touched it touched the property which is in question and as was indicated by their expert as by our expert that was about four million dollars in cost four million dollars and that doesn't include the cost attendant to building the path the engineering the permits so quite frankly what we had was at the time data they had put many millions of dollars into taking this well down taking across and touching our property which in my belief was the spot in this particular case but again it's a red herring because we have to look at the entire section five point five of the p s a says they have to meet and discuss really plans it's five point seven it says three wells within five years five point eight deals with abandonment the end tire of the contract and what this court recognized in its first decision was there was an elaborate scheme of production and that elaborate scheme of production has simply been stopped yet it strax by the folks at  wells and in fact they presented the testimony to deplete can by deposition mr mccann if you look at his that his testimony from deposition he is the individual who wrote to summaries and the s of the contract between law hotpot competitor tek was for the production of oil and gas on that particular property the eighteen percent over rugged warranty the complicated scheme that this court recognized is there for sole reason and that is to get oil and gas out of the ground during the lifetime of my two clients and in fact the judge relies upon my client mr house lingers testimony though she missed characterizes that she says apparently that mr erlanger supports the idea that there is not a requirement or an obligation to produce however if we look at his actual testimony what he was asked was whether or not the p s a required the maximum production and he answered quote it doesn't tell them how to produce once they complete and produce the well then he was asked by status counsel could he in fact they sta all sit on its multimillion dollar wells and not produce he answered i guess that's possible and that goes back to my economic argument my argument which only makes business sense in the context of if you're spending twenty four million dollars to drill three well just want to produce you're going to recapture the cost of that drilling and that path and that engineering and that permitting and all of those things which are ten and the problem here while simply didn't do anything they didn't meet their obligation under the p s a their word was not good the word of the contract was not followed by them and their response quite frankly going to spend millions of dollars drilling a well and not produce the joint appendage fifteen seventeen the problem that we've got here is that static oil has no intention after it looked at these wells of meeting the terms an obligation is the contract and the net effect of that is my clients were private and continued to be deprived of any opportunity to receive royalties under that particular contract the district court became somewhat fixed on the fact that over four hundred thousand dollars was paid for this property and fee which was only slightly less than they paid for ten years earlier and my point is and i understand why that sort of also has directed the court's attention in the wrong direction but the marcellus wasn't known at that time it wasn't exploitive that time and in fact marcellus is very expensive and valuable real estate and if we think of that valuable real estate having an office being building being built on it for twenty four million dollars it's not going to sit empty it's going to get leased out revenues going to be generated and my clients in this particular case received or eighteen percent of roger brodie there are and i can if i can briefly address the damage issue there were only i'm suggesting this indicates is that my client's testimony mr heflin or mr right mr let them all found damages and by finding damages it suggest a number of things number one damages in fact should be w by it also suggests that the wells are economically viable are you suggesting that they forfeited their argument on liability by bringing up expert counter your expert on damages is that what you're saying yes yes that that would be very unusual because we often have cases where the two parties in fact you are you for the argument this morning the two parties are arguing about liability right right and the damages question is separate  no liability you get no damages that haven't forfeited anything by putting up an expert on damages judge was i think the unusual thing here is that the damages become important really not so much for damages obviously my title  and it wasn't sticking them and they have no liability i mean you're assuming you're right but maybe the contract doesn't hide this well the problem though as i've indicated is even they recognize their obligation to drill three well even their own agreements and there are summaries and their own testimony by mr can recognize that three well obligation action seeking a declaratory judgment in federal court action or frankly would be entitled to judgement in his favor from the district court on any of three separate bases number one the court could have concluded that the only obligation in the contract was to spy wells and a spy well was not a completed well there or where there was no crime to produce over to the court could have required could have found under the contract that there was no contractual obligation to produce from wells your respective of whether or not they were completed because that obligation simply doesn't exist in the contract or number three the court could have concluded as you did conclude that the contract is ambiguous as to whether or not production was required the court could have considered all the extras you gave it it's either side was able to put forth and the court could have concluded based on that evidence there was no obligation to produce from these wells under this contract even considering all the evidence that pine could put forth in its favor court chose respectfully the court could of could have found this contract and the us and rulings in aguilar's favor on either the first two bases that are presented frankly frankly or honors the seminal fact in this case is that mr havel finger conceded at trial that production from the wells that are required so that even if you assume that spud doesn't mean spied which no court has ever found and which none of the experts know the witnesses conceded in fact every witness to testify in this case agreed with the fact that spidey means spad and we also cited to the court and put in the record a number of definitions in industry and otherwise for the fact that that is to start a well but even if you can suit conceive that somehow spider meant to complete wells to pons wiping which again was an undefined term in the contract there was no requirement under the contract under anyone's interpretation that those wells needed to be in producing immediately in fact as mr havel finger conceded in testimony stadol now after more could have defer the production until economic conditions warrant it and that's the crux of the issue in this case irrespective of all the contractual agreements that we made a lower court and i repeat this court now whoever was the producer on of the contract whether it be petro age or ecuador or now the very least is able to defer production of the minerals that they now own and again this was not a lease this was a very unusual and complicated and sophisticated transaction done by folks with decades of experience in the us industry at management levels and who represented by counsel on both sides and it was pine but chose to do this transaction as a conveyance and not a lease and the reason they did that was because they wanted the capital that tax gains benefit that flows from that ponchos this contract time shows the method in pine shows to convey the marcellus minerals out right through to the producer which had been p then became ecuador and is now alliance piled reserve for itself an eighteen percent overriding role teenagers so that whenever those minerals were extracted be it next year or next decade or forty years from now pod or its successor would be entitled to an eighteen percent royalty interest in those minerals your regards but pine has no right under the contract to dictate the timing of a production the pace of that production or the type of wells to be drilled all of which were factors that the trough w addressed in considering what difficulties any court would be confronted if it was going to try to rewrite the contract into a contract that pine now says it wishes it had there's no question but that as this court found that portions of this contract were designed to promote mineral production sure if i was in pine shoes i would want to promote you know oppression as well the question is what was pine able to get petraeus to be required to do and they're simply not only is  nothing in the contract that says yes that petraeus was required to complete wells or produce from those wells at ponds as our pace in fact virtually all the extras you get wouldn't suggest if not strongly suggests otherwise i'll  remind the court is it's rampant throughout the record that both before and after the transaction between petra edge and stadol not ecuador pasturage repeatedly told the saddle now ecuador that the only wells and that the first obligation had already been met as to the one well remember this was a well that had been that had been spied and my learned adversary addresses the fact that the well went down six thousand feet in crossing the lateral and that's for a unique set of circumstances because that well it was drilled on a pad that was adjacent to this property and therefore for it to enter into the marcellus zone of this property they were required to do that but is repeatedly told when or that obligation ashley that well has been met this was a well it was never completed this was a well that was never producing and not only did did petraeus tell us that in multiple communication leading up to the contract that actually warranted that result in section three point two five which was cited by opposing counsel to this court a minute ago in schedule three point five of the  terms that the obligation as to the first well has been that and that wasn't the only place that was that was found it was found in a number of documents all of which were before the district court all of which are included in the record and we've cited to this respectfully your honour's again the district court could have decided this case in our favor on contractual grounds by finding as i believe that the contract was not ambiguous as a matter of law and that spot means bud or by finding the contract or whatever means doesn't require production at times pace and pines discard timetable or the court could have said it will be applied every bit of a doubt we'll consider all the extensive evidence either side wants to the requirement was that one well had to be spied within a year and three rolls had to be spotted within five years three total that is the one plus two others that was the could that was the sole contract requirement that was done as a one well there's no question and we can see before the lower contract is pretty unambiguous as to the fact that by well the contract means spotted that is a well needed to be started but even if the court concludes that a well means a completed well that doesn't mean a completed in producing well yet to rebound to my knowledge so that i don't think it's germane to the contractual obligations but it certainly germane to the economic considerations that nobody wants to drill these wells in fact in the record is the fact that when stadol was trying to deal with this issue short of having to go to court and being before this court steadily tried to give away these minerals for free to anyone who was willing to produce them and nobody would take was never done nothing was ever done after the capture jet transit translation bottom line they were in breach of the contract they did not meet the obligations that in that five year period it is also critical in light of the fact that the pa constructed was on another's property and it is critical to petter tak even though they drove the horizontal six thousand and for a further extension of time so that it could then drove the lateral onto our property so they acknowledged by their actions that they had an obligation not just to spud not just touch but to drill down and drill across until it got on to the property which was one by one and that goes back to the to the simple fact that there was an agreement and if the agreement had been followed if the wells had been drilled even if they were shut in for a period of time and that those wells would be in existence there would be twenty four million dollars worth of assets in the ground and there would be a strong incentive to recover the funds that were utilized to drill those wells and that would result in income to mark klein and that's why when the experts talk about eight hundred eighty thousand or one point eight million and damages that's how those calculations are off the simple fact is static well made a decision to put their assets elsewhere and in doing so they reach this particular contract happy to answer questions i