Davis Oil Co. v. Steamboat Petroleum Co.

GRISBAUM, Judge.. This appeal concerns an oil company’s right to recover in cash a proportionate share of drilling costs. We reverse.

ISSUE

The sole issue presented is whether the trial court erred in its finding that defendant’s obligation to pay its proportionate share of drilling costs is limited to reimbursement from the proceeds of production, even though the defendant was an “active participant” in the adoption of a unitization plan.

FACTS

Plaintiff, Davis Oil Company (Davis), and defendant, Steamboat Petroleum Corporation (Steamboat), are both oil companies holding separate leases on…