United States v. Etcheverry

This was an action to recover for services rendered in the drilling of a well for oil and gas. Raymond L. Wycoff and Richard A. Wycoff were engaged in the business of drilling oil and gas wells. Julius Bankoff and Max Bankoff were engaged in the business of exploring and developing property for oil and gas, and they acquired through a farmout arrangement a lease covering a tract of land in Sherman County, Kansas. The parties entered into a written contract in which the drillers agreed to drill a well on such land. The contract provided in presently pertinent part that the well should be drilled to a depth of approximately 5300 feet, or approximately 100 to 150 feet into the Mississippi Lime formation; provided that the price paid for the drilling should be $4.00 per foot; provided that in the event heaving shale was encountered in the drilling, operations should be placed on a day work basis until such conditions were overcome and normal drilling operations could be resumed; and provided that the compensation for services on such day work basis should be $600 per day.The well was drilled to the approximate depth of 5214 feet without reaching the Mississippi Lime formation. When it reached that depth drilling difficulties were encountered. Approximately 22 days were spent in an effort to overcome the difficulties. Regarding the difficulties as insurmountable, operations were terminated and the premises were abandoned. Payment for the drilling and for the services rendered on the day work basis was refused and the suit was instituted.By answer the owners pleaded that the drillers breached the contract by terminating operations without completing the well; and by counterclaim, the owners sought to recover for sums expended in reliance upon the drillers completing the contract.