Opinion ID: 1251241
Heading Depth: 1
Heading Rank: 1

Heading: commencement of the well

Text: The trial court found: The language of the Stoltz lease, to the effect that the lease will remain in force for the five-year primary term `and as long thereafter as oil, gas, casinghead gas, casinghead gasoline, or either of them, is produced from said land, ... or operations are continued as hereinafter provided' refers to the situation in which drilling operations are in progress at the time at which the lease would otherwise expire. Such operations were in progress on the lease on June 28, 1973. Defendants did comply with the conditions of the Stoltz lease to extend it beyond its primary term. The evidence shows that defendants timely commenced operations with the good faith intention to proceed diligently with the work of drilling a well to completion and that their operations were thereafter conducted with reasonable diligence and dispatch and did result in completion of a well capable of producing oil and gas in paying quantities. This court has at least twice been confronted with a determination of the question whether an oil and gas lease has been extended beyond its primary term by preliminary actions or preparations of the lessee without actual drilling having been begun and has determined that under certain circumstances the lease may be extended, Fast v. Whitney, 26 Wyo. 433, 187 P. 192, 193; True Oil Company v. Gibson, Wyo., 392 P.2d 795, 796. In probable deference to these holdings, appellants assert no basic disagreement with the application of the rule that under and by terms of this lease the requirement of commence to drill a well may be satisfied if preliminary commencement activities are not mere pretenses or a holding device to retain possession of the lease; and if these acts are commenced and prosecuted with a good-faith and bona fide intention to drill and complete the well, and if these acts are performed with such intent and the party proceeds thereafter with diligence to the completion of the well, it will result in the extension of the primary term of the lease. In prosecuting this appeal appellants now assert that their three grounds for reversal must be decided as questions of law and have by most skillful and adroit argument, under the guise of presenting them as questions of law, really extended this court an invitation to review the evidence and the findings and inferences of the trial court and to substitute our views for those of the fact finder. This is the basic theme of appellants' three contentions. The preliminary activities necessary to comply with the requirement of the commencement of a well were considered to be factual questions in both Fast and True Oil. Additionally, a careful examination of the authorities cited by appellants in connection with their first contention reveals that all the cases we consider applicable were determined as questions of fact at the trial court level, and the appellate court in no case reversed the finding of a trial court. This is demonstrated clearly by the case of Butler v. Nepple, 54 Cal.2d 589, 6 Cal. Rptr. 767, 354 P.2d 239, upon which appellants have placed great reliance in support of their first two contentions. In sustaining the action of the trial court in that case they enunciated the rule at 243, which is controlling: In reviewing the evidence, all conflicts must be resolved in favor of the questioned findings and all reasonable inferences indulged in their support.    In face of the trial court's specific finding of this element, the appellants must be reduced to the contention that the evidence simply does not sustain this finding of good faith and bona fide intention of appellees to diligently proceed with the drilling of the well, and appellants ask us to find therefrom that appellees' real purpose was only to hold this lease. If there is substantial evidence we cannot do this, but must be bound by the finding of the trial court, Caillier v. City of Newcastle, Wyo., 423 P.2d 653, 656, and cases collected in 1 West's Wyoming Digest, Appeal and Error, p. 402, et sequitur, and cases in 1976 Cum.P.P. Further, Findings of fact must be construed liberally and favorably to the judgment, and the presumption is that they are right, Jassman v. Wulfjen, 71 Wyo. 261, 257 P.2d 334, 336; Murphy v. Petrolane-Wyoming Gas Service, Wyo., 468 P.2d 969, 979. This court has held further that where the finding by the trial court is not inconsistent with the evidence it will not be disturbed on appeal, Wyoming Farm Bureau Mutual Insurance Company v. May, Wyo., 434 P.2d 507, 511. In our view there was sufficient evidence for the court to make this finding from the facts which have been heretofore set out, and we thus cannot disturb the trial court's finding on this first issue no matter what might be our personal view.