Terra Resources, Inc. v. Federated Energy Corp.

GARRISON, Judge.

On April 29, 1981, Federated Energy Corporation (“FEC”) entered into an agreement with Prentice Oil and Gas whereby FEC became obligated to drill two oil and gas wells in the Chacahoula area of Terre-bonne Parish. Terra Resources, Inc. (“Terra”) acquired an interest in this agreement from FEC and became the operator of the wells. Two other companies, American Fluorite and Peninsula Resources, signed the agreement as non-operators. This lawsuit was precipitated by American Fluorite’s and Peninsula Resources’ failure to pay Terra their share of operating costs.

The plaintiff,…