Pooling and Unitization: Unleased Owner; Louisiana

摘要

Caldwell Lands, Inc. (Caldwell) is the owner of a property included in a producing unit located in Vermilion Parish, Louisiana. The unit is operated by Cedyco Corporation (Cedyco). Cedyco obtains production from the unit but does not pay Caldwell a share of the proceeds of that production. Caldwell files suit, alleging that Cedyco does not hold a mineral lease from Caldwell and that Caldwell is entitled to a share of the proceeds. In its answer, Cedyco admits that it produced oil, gas and/or condensate from the unit and did not pay any proceeds to Caldwell, but denies that it lacks a mineral lease from Caldwell covering the property. Cedyco is not represented at trial. The trial court rules in favor of Caldwell, awarding $27,902 in production proceeds, plus interest and costs. Cedyco appeals. Held: affirmed in part, reversed in part, and remanded. Finding that Caldwell proved at trial that it owned the property, the appellate court affirms the ruling that Caldwell is entitled to production proceeds. The Court then addresses whether Caldwell is responsible for its share of production expenses. It analyzes this question under Louisiana Civil Code article 488, which provides that a good faith possessor is entitled to be reimbursed for expenses incurred in removing "products" of the land, but a bad faith possessor is not. Because Caldwell failed to prove the absence of a mineral lease, the court finds that Caldwell did not prove Cedyco to be a bad faith possessor. Accordingly, as a good faith possessor, Cedyco is entitled to reimbursement of its production expenses. The case is remanded for the trial court to receive evidence of Cedyco's production expenses.