GEORGE M. GILMER, JR. Plaintiff-Appellant
PRINCIPLE ENERGY, L.L.C., F/K/A REGAL ENERGY, L.L.C., and CLASSIC PRODUCTION SERVICES, INC. Defendant-Appellee
Appealed from the Forty-Second Judicial District Court for
the Parish of DeSoto, Louisiana Trial Court No. 73530
Honorable Amy Burford McCartney, Judge
PESNELL LAW FIRM By: Billy R. Pesnell J. Whitney Pesnell W.
Alan Pesnell Counsel for Appellant
COLVIN, SMITH & McKAY By: Cole B. Smith James H. Colvin
Taunton Melville Counsel for Appellee, Principle Energy,
L.L.C., f/k/a Regal Energy, L.L.C.
MILLER, LLP By: William R. Huguet Ann Rene Hankins Counsel
for Appellee, Classic Production Services, Inc.
RANDAZZO, GIGLIO & BAILEY, LLC By: Matthew J. Randazzo,
III Shawn Alexander Carter Counsel for Appellee, XTO Energy,
PITMAN, GARRETT, and McCALLUM, JJ.
George M. Gilmer, Jr., appeals the judgment of the trial
court which granted motions for summary judgment filed by
Defendants, Principle Energy, L.L.C., f/k/a/ Regal Energy,
L.L.C. ("Principle"), and Classic Production
Services, Inc. ("Classic"), finding that the
drilling of a shut-in well, which had been tested for
production of minerals, interrupted prescription on a royalty
interest. Plaintiff also appeals the trial court's denial
of his cross-motion for summary judgment. For the following
reasons, we affirm the judgment of the trial court.
April 1, 2008, Plaintiff signed a royalty conveyance of 50
percent of 1/5th of 8/8ths interest in six tracts of land in
DeSoto Parish to Regal Energy, L.L.C. The conveyance stated
that the deed "shall have a prescriptive period of three
(3) years, rather than ten (10) years ordinarily provided
under Louisiana law. A shut-in well shall perpetuate the term
of this Deed." Regal Energy, L.L.C., subsequently
changed its name to Principle Energy, L.L.C.
October 13, 2008, XTO Energy, Inc. ("XTO"), spudded
the E. B. Brown, et al. No. 1 Well ("the Brown
well") on Plaintiff's property, and the well was
completed on January 23, 2009. The Brown well was tested by
FESCO, Inc., on January 28-29, 2009, by an open-flow surface
production test. The test showed that the well could produce
1, 156 thousand cubic feet ("MCF") per day. The
well was never placed in production due to lack of a pipeline
and was classified by the Louisiana Department of
Conservation as a shut-in well waiting on pipeline. Another
type of test, a DT-1 surface production test (deliverability
test), was not performed on the Brown well. On June 30, 2009,
the Louisiana Commissioner of Conservation issued Order No.
191-H-45, which created the HA RA SU58 unit and designated
the Brown well as the unit well. The order stated that its
effective date was "on and after May 12, 2009."
November 2010, the Louisiana Commissioner of Conservation
issued Order No. 191-H-129, which authorized Chesapeake
Operating, Inc. ("Chesapeake"), to drill and
operate a well called the Davis 17-15-14H Well No. 001-Alt
("the Davis well") as an alternative unit well for
the HA RA SU58 unit. The Davis well was spudded on October
13, 2010, and completed on April 30, 2011. Since then, the
Davis well has produced in paying quantities. On July 8,
2011, Principle conveyed a portion of its interest to
the royalty conveyance was signed on April 1, 2008, and was
for a term of three years, and the Davis well was not
completed until April 30, 2011, Plaintiff first attempted to
convince Principle and Classic to release the royalty deed.
When the companies refused, he filed a petition against them
in DeSoto Parish entitled "Petition to Annul and Cancel
Royalty Conveyances and Recover Royalty Payments and
Ancillary Relief." He alleged the above facts, but also
claimed that the Brown well was never completed, as shown by
a Department of Conservation Inspection Report dated April
15, 2011, and that XTO never filed a "Well Completion
Report" with the Conservation Department concerning the
also alleged that no DT-1 test was performed on the Brown
well, in accordance with Statewide Order 29-B, and that the
well has never produced any gas. He further alleged that when
Chesapeake applied to the Louisiana Commissioner of
Conservation, it created the HA RA SU58 unit for the
Haynesville Shale Zone by order effective May 12, 2009. In
that order, the Commissioner found that the unit could
"be efficiently and ...