United States District Court, W.D. Louisiana, Shreveport Division
B.A. KELLY LAND CO., LLC
AETHON ENERGY OPERATING LLC
L. HAYES JUDGE
A.TOUGHTY UNITED STATES DISTRICT JUDGE.
before the Court is a Motion for Partial Summary Judgment
[Doc. No. 16] filed by Plaintiff B.A. Kelly Land Co., LLC
(“B.A. Kelley”). Defendant Aethon Energy
Operating LLC (“Aethon”) filed a memorandum in
opposition to the motion [Doc. No. 24]. B.A. Kelly filed a
reply [Doc. No. 27].
following reasons, B.A. Kelly's motion is DENIED.
a suit by an unleased mineral owner, B.A. Kelly, against the
operator of certain unit and alternate unit wells, Aethon,
for forfeiture under the Well Costs Reporting Statute,
Louisiana Revised Statutes 30:103.1 and 103.2, based on
Aethon's alleged failure to timely provide initial and
quarterly reporting regarding the wells.
Kelley is the owner of a tract of land in Section 11 of
Township 16 North, Range 11 West (“Section 11”),
Bossier Parish, Louisiana (the “Tract”). The
Tract is included within two compulsory drilling and
production units, one for the Lower Cotton Valley Zone,
Reservoir A, for the Elm Grove Field, Bossier Parish,
Louisiana (the “LCV Unit”), and one for the
Haynesville Zone, Reservoir A, for the Elm Grove Field,
Bossier Parish Louisiana (the “HA Unit”). Before
Aethon became the operator of record of the subject units, 15
unit and alternate wells had been drilled in the LCV Unit,
and one unit well had been drilled in the HA Unit
(collectively, the “Wells”).
minerals underlying the Tract were subject to a mineral
servitude owned by Dorothy K. Richardson
(“Richardson”). Richardson had leased the
minerals underlying the Tract, but, upon her death on
November 11, 2013, the servitude expired, which resulted in
the termination of the mineral lease she had executed by
operation of law. The minerals reverted to the surface owner,
B.A. Kelly, which had not leased the minerals.
became the operator of record for the LCV Unit on July 1,
2016, and for the HA Unit on October 1, 2016. When Aethon
became the unit operator, all the LCV unit wells and the
single HA well had reached payout, meaning that the costs for
initially drilling these wells had been recovered by the
production revenues for each. This placed Aethon and the
unleased owner, B.A. Kelly, in a relationship that entitled
B.A. Kelly to its pro rata share of the well's monthly
revenues, after the deduction by Aethon of B.A. Kelly's
share of the ongoing operating costs for the well.
December 15, 2017, B.A. Kelly sent a letter to Aethon,
stating that it was an unleased owner within the subject
units and requesting certain categories of information
regarding the Wells, including information preceding the
periods of Aethon's operatorship. On April 17, 2018, B.A.
Kelly sent a second letter to Aethon, purporting to call to
Aethon's attention Aethon's alleged failure to
provide the information requested in B.A. Kelly's
December 15, 2017 letter. Neither letter made a reference to
the Well Costs Reporting Statute or to its penalties.
about April 24, 2018, Kyle Hickey (“Hickey”), a
Senior Landman for Aethon, contacted B.A. Kelly's
representative, Alan L. Brittain (“Brittain”), by
telephone to discuss exactly what information B.A. Kelly was
seeking from Aethon. During that conversation, Brittain
indicated that he had received certain reports from Anadarko,
a prior operator of one or more of the Wells, and requested
that Aethon send him reports in a similar format. Hickey
asserts that he was under the impression that Brittan was
seeking some type of summary report, as opposed to a more
detailed and itemized statement of the Wells' revenue and
indicated to Brittain that he was not sure whether Aethon had
a copy of the prior Anadarko reports, and Brittain
volunteered to send Hickey a copy of such a report as an
example. Hickey told Brittan that he would send him an email
so Brittan could send a copy of the Anadarko report back to
him. Hickey followed up the conversation with an email to
Brittain, thanking Brittain and, again, asking for a copy of
the Anadarko report, so that Aethon could style its report
according to Brittan's request. No. response from
Brittain was forthcoming.
September 21, 2018, B.A. Kelly filed this suit, seeking a
forfeiture of Aethon's right to recoup B.A. Kelly's
pro rata share of the Wells' operating costs out of
production because of Aethon's alleged failure to timely
provide B.A. Kelly with reports under La. Rev. Stat. 30:103.1
August 2, 2019, B.A. Kelly filed the pending motion seeking
partial summary judgment declaring that any rights Aethon may
have had to charge costs to B.A. Kelly's well revenue
have been forfeited by law. Aethon opposes the motion, and
B.A. Kelly has filed a reply.
matter has been fully briefed, and the Court is prepared to
Standard of Review
judgment is appropriate when the evidence before a court
shows “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a). A fact is
“material” if proof of its existence or
nonexistence would affect the outcome of the lawsuit under
applicable law in the case. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A dispute about a
material fact is “genuine” if the evidence is
such that a reasonable fact finder could render a verdict for
the nonmoving party. Id.
party seeking summary judgment always bears the initial
responsibility of informing the district court of the basis
for its motion, and identifying those portions of ‘the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if
any,' which it believes demonstrate the absence of a
genuine issue of material fact.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986) (quoting
Anderson, 477 U.S. at 247). “The moving party
may meet its burden to demonstrate the absence of a genuine
issue of material fact by pointing out that the record
contains no support for the non-moving party's
claim.” Stahl v. Novartis Pharm. Corp., 283
F.3d 254, 263 (5th Cir. 2002). Thereafter, if the non-movant
is unable to identify anything in the record to support its
claim, summary judgment is appropriate. Id.
“The court need consider only the cited materials, but
it may consider other materials in the record.”
evaluating a motion for summary judgment, courts “may
not make credibility determinations or weigh the
evidence” and “must resolve all ambiguities and
draw all permissible inferences in favor of the non-moving
party.” Total E & P USA Inc. v. Kerr- McGee Oil
and Gas Corp., 719 F.3d 424, 434 (5th Cir. 2013)
(citations omitted). While courts will “resolve factual
controversies in favor of the nonmoving party, ” an
actual controversy exists only “when both parties have
submitted evidence of contradictory facts.” Little
v. Liquid Air. Corp., 37 F.3d 1069, 1075 (5th Cir.
1994). To rebut a properly supported motion for summary
judgment, the opposing party must show, with
“significant probative evidence, ” that
a genuine issue of material fact exists. Hamilton v.
Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000)
(emphasis added). “‘If the evidence is merely
colorable, or is not significantly probative,' summary
judgment is appropriate.” Cutting Underwater Tech.
USA, Inc. v. Eni U.S. Operating Co., 671 F.3d 512, 517
(5th Cir. 2012) (quoting Anderson, 477 U.S. at 248).
there can be no genuine dispute as to a material fact when a
party fails “to make a showing sufficient to establish
the existence of an element essential to that party's
case, and on which that party will bear the burden of proof
at trial.” Celotex Corp., 477 U.S. at 322-23.
This is true “since a complete failure of proof
concerning an essential element of the nonmoving party's
case necessarily renders all other facts immaterial.”
Id. at 323.
The Well Costs Reporting Statute
Revised Statute 30:103.1 provides in pertinent part as
A. Whenever there is included within a drilling unit, as
authorized by the commissioner of conservation, lands
producing oil and gas, or both, upon which the operator or
producer has no valid oil, gas, or mineral lease, said
operator or producer shall issue the following reports to the
owners of said interests by a sworn, detailed, itemized
(1) Within ninety calendar days from completion of the well,
an initial report which shall contain the costs of drilling,
completing and equipping the unit well.
(2) After establishment of production from the unit well,
quarterly reports shall contain the following:
(a) The total amount of oil, gas, or other hydrocarbons
produced from the lands during ...