Opinion ID: 1239735
Heading Depth: 1
Heading Rank: 2

Heading: The Clayton Appeal

Text: Counsel for Clayton urged upon the trial court that $5,000 should be allowed as additional damages resulting from being unable to develop the acreage by reason of not having all the working interest; and $4,000 for time spent by Clayton's geologist and others. The trial judge said of these items, in his decision letter, that he was unable to see sufficient certainty and definiteness of relationship to warrant awarding any part of these items. We agree with the trial judge. Plaintiff's proof was not sufficient to prove these items as an element of damages. Another item which the trial court did not allow was $3,404.04 claimed by Clayton as being 15% of the capital expenditures for drilling, completing, equipping and operating costs. It is, of course, clear from the operating agreement that Shidler is not obligated for drilling or production costs. Inasmuch as the Krusmark interest is a working interest, it follows that Clayton is not going to distribute anything to him until Clayton has recovered all of its drilling, completion and production costs. Therefore, Clayton has not been damaged on account of the working interest held by Krusmark until Clayton has first recovered all of the drilling and lifting costs. The $3,404.04 item was properly disallowed. The final item disallowed by the trial court was the sum of $15,527.28 claimed by Clayton as a loss in the future on three possible additional well locations on the property. The trial judge simply held any award based on additional wells is quite speculative and thus not warranted. We fully agree. The evidence indicates the likelihood of economical wells at other locations on the quarter-section here involved would definitely be problematical. We also find no evidence indicating the Oil and Gas Conservation Commission would permit 40-acre spacing in the area.