Novy v. Woolsey Energy Corp.

Arnold-Burger, J.:

Michael and Janet Novy (the Novys) own land subject to an oil and gas lease held by Woolsey Energy Corporation (Woolsey). Woolsey has refused to drill for either oil or gas on their land for over 30 years because Woolsey has determined, based on its own engineering study, that any well would not produce oil or gas in commercial quantities and the cost would significantly exceed any benefit. The Novys argue that Woolsey has breached its implied duty to develop the íand and, accordingly, the lease as to the right to drill for oil should be terminated. The district court…