Pearson v. Larry

MARVIN, Judge. The lessees-working interest owners in two oil, gas, and mineral leases (Bath Form, LA.SPEC. 14-BR1-2A) appeal a judgment against them that awarded LRS 31:207 damages and attorney fees for their failure to execute, under LRS 31:206, within 30 days after formal demand, a release of the acreage under the lease that was not contained in a compulsory production unit, the unit well for which was drilled on land other than the leased acreage. The trial court erroneously relied on Paragraph 6 of the lease form to conclude that the leased acreage was “divided.” We have squarely held that that paragraph of this lease form applies only to voluntary, *914 and not to compulsory, production units. Mathews v. Goodrich Oil Co., 471 So.2d 938 (La.App. 2d Cir.1985), writ denied. The fact that these lessees executed the § 206 release after the action was instituted does not change the result or make lessees obligated for § 207 damages and attorney fees. The judgment appealed is reversed and judgment is hereby rendered rejecting ap-pellees’ demands at their costs.