United States District Court, W.D. Louisiana, Shreveport Division
B.A. KELLY LAND CO., LLC
AETHON ENERGY OPERATING LLC
JUDGE KAREN L. HAYES
A. DOUGHTY UNITED STATES DISTRICT JUDGE
before the Court is a Motion for Reconsideration of Denial of
B.A. Kelly's Motion for Partial Summary Judgment [Doc.
No. 33] filed by Plaintiff B.A. Kelly Land Co., LLC
(“B.A. Kelly”). Defendant Aethon Energy Operating
LLC (“Aethon”) filed a memorandum in opposition
to the motion [Doc. No. 36].
also is the Court's sua sponte Notice it may
enter summary judgment in favor of Aethon. In the Court's
Ruling denying B.A. Kelly's Motion for Partial Summary
Judgment [Doc. Nos. 28, 29], the Court gave Notice that,
given the Court's findings that the letters at issue in
this matter do not meet the strict requirements of the Well
Costs Reporting Statute, Louisiana Revised Statutes 30:103.1
and 103.2, the Court intended to sua sponte enter
summary judgment in favor of Aethon, denying B.A. Kelly's
forfeiture claims under § 103.2, and dismissing this
suit with prejudice.[1" name="FN1" id=
"FN1">1] The Court granted B.A. Kelly twenty-one
(21) days to reply to this Notice. B.A. Kelly timely filed a
reply [Doc. No. 34');">34].
following reasons, B.A. Kelly's Motion for
Reconsideration [Doc. No. 33] is DENIED, and the Court
sua sponte enters summary judgment in favor of
Aethon denying B.A. Kelly's forfeiture claims under
§ 103.2 and dismissing those claims with prejudice.
a suit by an unleased mineral owner, B.A. Kelly, against the
operator of certain unit and alternate unit wells (“the
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.
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. 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. 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 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.
on 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 a Motion for Partial Summary
Judgment [Doc. No. 16] seeking judgment declaring that any
rights Aethon may have had to charge costs to B.A.
Kelly's well revenue have been forfeited by law.
October 8, 2019, the Court issued a Ruling and an Order
denying B.A. Kelly's Motion for Partial Summary Judgment
[Doc. Nos. 28, 29]. The Court noted that an operator's
failure to comply with the reporting requirements imposes a
harsh penalty: the operator forfeits his right to
contribution for expenses from the unleased owner. Because
this penalty is harsh, §§ 103.1 and 103.2 are
strictly construed by courts. The Court additionally noted
that the law demands that an owner who wishes to take
advantage of the Well Costs Reporting Statute must comply
to the letter. This is in keeping with the principle
that penal statutes be strictly construed and require exact
Court found that the December 15, 2017 letter and the April
17, 2018 letter failed to comply with the strict requirements
of Section 103.1. After considering the strict construction
of the Well Costs Reporting Statute as well as the
requirement of compliance to the letter of the law, the Court
found that summary judgment on the issue of forfeiture in
B.A. Kelly's favor was inappropriate.
given the Court's findings that the letters do not meet
the strict requirements of the Well Costs Reporting Statute,
the Court gave Notice that it intended to sua sponte
enter summary judgment in favor of Aethon, denying B.A.
Kelly's forfeiture claims under § 103.2. B.A. Kelly