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Come Big Or Stay Home, LLC v. Eog Resources

May 4, 2012

COME BIG OR STAY HOME, LLC,
PLAINTIFF AND APPELLANT
v.
EOG RESOURCES, INC.,
DEFENDANT AND APPELLEE



Appeal from the District Court of Mountrail County, Northwest Judicial District, the Honorable Richard L. Hagar, Judge.

The opinion of the court was delivered by: Maring, Justice.

N.D. Supreme Court

Come Big or Stay Home, LLC v. EOG Resources, Inc.,

2012 ND 91

This opinion is subject to petition for rehearing. [Go to Documents]

[Download as WordPerfect]

AFFIRMED.

Opinion of the Court by Maring, Justice.

Come Big or Stay Home, LLC v. EOG Resources, Inc.No. 20110305

[¶1] Come Big or Stay Home, LLC ("CBSH"), appeals from a summary judgment dismissing its claims against EOG Resources, Inc. ("EOG"), for refusing to provide it with oil and gas well information unless CBSH agreed to not disclose the information to third parties without EOG's consent. We affirm, concluding as a matter of law that CBSH's theories of recovery are not viable under the circumstances.

I

[¶2] EOG owns and develops oil and gas interests in North Dakota and has drilled and operated numerous oil and gas wells in the state. CBSH owns mineral or leasehold interests in the state, including interests in spacing units where wells have been drilled and operated by EOG. In late 2008, EOG sent CBSH, a working interest owner, an invitation to participate in the risks of drilling a horizontal oil and gas well in Mountrail County. See generally Gadeco, LLC v. Industrial Comm'n, 2012 ND 33, ¶¶ 3-7 (providing background information about invitations to participate and risk penalties); Continental Res., Inc. v. Farrar Oil Co., 1997 ND 31, ¶ 3 n.1, 559 N.W.2d 841 (describing horizontal well technology). The invitation to participate informed CBSH that if it accepted the well proposal and elected to participate in the drilling operation, a joint operating agreement ("JOA") "for your execution will be sent under separate cover upon your election to participate." CBSH elected to participate in the drilling of the well and received a JOA, titled "A.A.P.L. Form 610-1982 Model Form Operating Agreement," which contained the following provisions:

D. Access to Contract Area and Information:

Each party shall have access to the Contract Area at all reasonable times, at its sole cost and risk to inspect or observe operations, and shall have access at reasonable times to information pertaining to the development or operation thereof, including Operator's books and records relating thereto. Operator, upon request, shall furnish each of the other parties with copies of all forms or reports filed with governmental agencies, daily drilling reports, well logs, tank tables, daily gauge and run tickets and reports of stock on hand at the first of each month, and shall make available samples of any cores or cuttings taken from any well drilled on the Contract Area. The cost of gathering and furnishing information to Non-Operator, other than that specified above, shall be charged to the Non-Operator that requests the information. Well information will be provided by the Operator as set out in Exhibit "G." Such exhibit also provides for notice.

XV.P. Non-Operator Confidentiality

Non-Operator agrees not to disclose any information relative to drilling or completion operations to any third party without the express written consent of the Operator which may be withheld at the Operator's sole discretion, provided however, Operator agrees to allow disclosure if required for any filings with the Securities and Exchange Commission or if required to comply with any court order. CBSH signed and returned the JOA and accompanying documents to EOG.

[ΒΆ3] During the ensuing months, EOG sent CBSH, as a working interest owner, 18 additional invitations to participate in the drilling of horizontal wells in North Dakota. Except for the location and estimated costs of the proposed wells, these invitations to participate did not differ substantively from the first invitation to participate received by CBSH in late 2008. CBSH agreed to participate in each well and received from EOG separate JOAs that mirrored the provisions of the JOA received by CBSH after it had elected to participate in the first well. However, CBSH refused to execute any of the JOAs for the subsequent wells. After each refusal by CBSH to execute a JOA, EOG sent letters to CBSH explaining it was willing to provide well information to CBSH if it would agree to the nondisclosure ...


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