Case Name: HUMBLE OIL & REFINING COMPANY, Plaintiff and Appellant v. Donald H. JONES et al., Defendants and Appellees
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1963-09-11
Citations: 157 So. 2d 110
Docket Number: No. 888
Parties: HUMBLE OIL & REFINING COMPANY, Plaintiff and Appellant v. Donald H. JONES et al., Defendants and Appellees.
Judges: TATE, J., dissents and assigns written reasons.
Reporter: Southern Reporter, Second Series
Volume: 157
Pages: 110–118

Head Matter:
HUMBLE OIL & REFINING COMPANY, Plaintiff and Appellant v. Donald H. JONES et al., Defendants and Appellees.
No. 888.
Court of Appeal of Louisiana. Third Circuit.
Sept. 11, 1963.
Rehearing Denied Oct. 23, 1963.
Dissenting Opinion Nov. 5, 1963.
Bernard J. Caillouet, Peter R. Monrose, Jr., W. J. McAnelly, Jr., New Orleans) for plaintiff-appellant.
H. Purvis Carmouche, Jr., Crowley, Percy Sandel, R. Cornelius Smith, Joseph G. Hebert, New Orleans, Edwards & Edwards, by Edwin W. Edwards, J. Lyle DeBellevue, Crowley, James C. Arceneaux, Jr., Rayne, J. E. Kibbe, Abbeville, Hargrove, Guyton & Van Hook, by Elmon W. Holmes, Shreveport, for defendants-appellees.

Opinion:
HOOD, Judge.
This is an action instituted under the Louisiana Declaratory Judgments Act (then LSA-R.S. 13:4231-13:4246, but now LSA-C.C.P. Articles 1871-1883), to settle a dispute between the plaintiff and some of the defendants as to the correct calculation of royalties due under certain oil, gas and mineral leases either executed by defendants or covering their royalty interests. These oil, gas and mineral leases are owned by plaintiff.
On January 11, 1955, pursuant to provisions contained in the above-mentioned leases or amendments thereto, plaintiff created a 160-acre pooled unit in the North Crowley Field by filing a unit declaration instrument in the Conveyance Records of Acadia Parish. This 160-acre "Declared Unit" affected and applied to gas and condensate produced from any and all horizons, formations or zones beneath the surface area included in the unit. On January 23, 1955, a unit well was completed in the Frio 16 Sand, Reservoir "B", as a producing gas well. A market was obtained for the gas and condensate produced from this well on February 1, 1955, and from that time until the end of August, 1958, the royalties specified in the leases were paid to defendants on a surface acre basis, that is, for the purpose of computing royalties each lease in the unit was allocated the same proportion of the production from the unit well as the number of surface acres covered by that particular lease bore to the total unit acreage of 160 acres.
On August 16, 1958, the Commissioner of the Louisiana Department of Conservation issued an order adopting and approving a production unit for the Frio 16 Sand, Reservoir "B", of the North Crowley Field, effective September 1, 1958, and ordering that from and after that date all separately owned tracts within the Conservation Unit be pooled, "with each tract sharing in the unit production in the proportion that the surface area of such tracts bears to the entire surface area of said unit." The "Conservation Unit" thus created, containing 177.60 acres, overlapped a part of the "Declared Unit," there being 101.13 acres of the Declared Unit included within the Conservation Unit.
A dispute then arose between plaintiff and some of the defendants as to the correct amount of royalty due to the defendants on production of a Conservation Unit well from the Frio 16 Sand, Reservoir "B". This suit was instituted on April 7, 1959, for a declaratory judgment to settle the dispute. While the suit was pending, another order of the Commissioner of Conservation was issued revising the Conservation Unit so that thereafter the unit contained only 165.65, instead of 177.60, acres. Even with this revision, however, the Conservation Unit continued to overlap 101.13 acres of the original Declared Unit, so the legal issues presented by the creation of the Conservation Unit remained the same in spite of the change in size.
The central question presented in this suit is: Does an order of the Commissioner of Conservation creating a force pooled unit for one particular sand, which Conservation Unit overlaps a previously Declared Unit formed as to all underlying sands by the lessee under authority of lease contractual agreements, supersede and abrogate this Declared Unit agreement insofar as the calculation of royalties due on production from the Conservation Unit sand is concerned ?
This suit was originally instituted with Donald H. Jones as the only defendant. A companion case, entitled "Humble Oil & Refining Company v. Edwin W. Edwards," was also filed against other parties relating to an adjoining tractj also included within the Declared Unit. These two cases were consolidated for trial and on December 16, 1959, judgment was rendered by the trial court in favor of the defendant in each case decreeing, in effect, that the order of the Commissioner of Conservation creating the above-described "Conservation Unit" had. the effect of superseding and abrogating the Declared Unit insofar as the calculation of royalties due on production from the Conservation Unit sand is concerned. On appeal, we affirmed the judgment of the trial court in each of those cases. See Humble Oil & Refining Company v. Jones, La.App., 125 So.2d 640, and Humble Oil & Refining Company v. Edwards, La.App., 125 So.2d 654.
The Supreme Court of Louisiana later annulled and set aside the judgments of the district court and of this court in both of those cases, and it remanded the cases to the district court in order that additional "indispensable" parties who owned royalty interests in the Declared Unit area could be impleaded. See Humble Oil & Refining Company v. Jones, 241 La. 661, 130 So.2d 408, and Humble Oil & Refining Company v. Edwards, 241 La. 676, 130 So.2d 413.
By supplemental petition, all parties owning royalty interests in the Declared Unit area since the effective date of the above-mentioned conservation order were im-pleaded, as ordered by the Supreme Court. Service was made on all resident defendants and the non-resident defendants were cited through curators ad hoc appointed by the court. The companion case of "Humble Oil & Refining Company v. Edwards" was dismissed without prejudice since all parties have been joined in this case.
Answers to the supplemental petition were filed by Donald H. Jones, the original defendant, Pan American Petroleum Corporation, Shell Oil Company, Edwin W. Edwards, L. J. Jones, Eulice Matte, Louis A. Matte, Anton Joseph Ohlenforst, and the parties represented by the curators ad hoc. The remaining defendants did not file an answer.
The defendants represented by one of the curators ad hoc, along with Pan American Petroleum Corporation and Shell Oil Company, filed answers adopting plaintiff's position in this controversy. All of the remaining defendants who filed answers opposed plaintiff's position.
After trial of the case on its merits, the trial court rendered judgment on January 17, 1963, again decreeing that the "Declared Unit" which had been created by plaintiff pursuant to the provisions of the leases had been supplanted and superseded by the subsequently created "Conservation Unit" insofar only as said Declared Unit pertains to the Frio 16 Sand, Reservoir "B". The court further decreed that from and after September 1, 1958, .the defendants owning lease or royalty rights in the area covered by the Conservation Unit shall be paid royalty as provided by their respective leases, based on production from the above-mentioned Conservation Unit sand in the proportion that the number of surface acres covered by each respective lease and included within the Conservation Unit bears to the total number of acres included within such Conservation Unit. Also, it was decreed that the defendants owning lease or royalty rights in the "Declared Unit," but outside the production limits of the Conservation Unit, shall not participate in production from said Conservation Unit after September 1, 1958. Plaintiff, Humble Oil & Refining Company, has appealed from that judgment.
On this appeal substantially the same arguments were presented by the parties as were presented when this case was originally before us. No new issues have been raised, and no additional authorities have been cited other than those which we considered when the case was first appealed to this Court. All of the issues presented on this appeal were considered and determined by us when the case was before us originally, and we think all of those issues were properly disposed of at that time.
For the reasons assigned by us in Humble Oil & Refining Company v. Jones, La.App., 125 So.2d 640, therefore, the judgment now being appealed from is hereby affirmed. All costs of this appeal are assessed to plaintiff-appellant, Humble Oil & Refining Company.
Affirmed.
TATE, J., dissents and assigns written reasons.