TDX Energy v. Chesapeake Operating, No. 16-30450 (5th Cir. 2017)Annotate this Case
The most natural reading of La. R.S. 30:103.1 and 103.2 is that operators forfeit their right to contribution when they fail to send timely reports to lessees with oil and gas interests in lands upon which the operator has no lease, and that interpretation is most consistent with the statute's context and purpose. TDX filed suit seeking its share of revenues from a unit well without deduction of drilling costs because Chesapeake did not provide the requested reports. The Fifth Circuit rejected Chesapeake's contention that even if sections 103.1 and 103.2 provide a remedy for lessees, applying them in that way would violate Article III of the Louisiana constitution. The court explained that, given the liberal construction courts must give titles, a title which gave notice that an act dealt with operators' reporting requirements cannot fail because it did not specify every party to whom they must report. Finally, the court rejected Chesapeake's counterclaim asserting that TDX was required to pay a risk fee under La. R.S. 30:10(A) because TDX did not make an election regarding the risk fee under that provision. The court reversed in part, affirmed in part, and remanded.