Page:Ezzell v. Oil Associates, Inc.pdf/4

Rh other provisions is one that, within six months from date, the lessee shall begin drilling the well for oil or gas on some part of the lands in the lease, and cause the same to be drilled to a depth of at least 2,800 feet, unless oil or gas in paying quantities shall be found at a lesser depth. It further provides that if actual drilling of a well not be commenced within six months from the date of the contract, the lease shall be forfeited to the lessors, with $7,500 as liquidated damages for the failure to commence drilling within said time. The contract then provides that if the first well should be a dry hole, that the lessee shall have one year from the date of the completion of said dry hole within which to begin drilling a second well for oil and gas, and, in case no second well shall be commenced to be drilled within one year from the date of the completion of the first hole, the lessee shall immediately abandon the lease, and return it to the first party. Then follows a proviso that the lessee, if it shall so elect, instead of abandoning the lease at the end of the year from the date of the expiration of the first hole, for failure to commence another well, may keep the lease in force for the remainder of the original five-year period by payment of a rental of $5 per acre per annum for the remaining period of five years.

The record shows that the lessors owned something less than 3,500 acres of land in a solid body, and 280 acres of land nearby. Of this land, 1,170 acres were embraced in the lease. Only two wells have been drilled on the 1,170-acre tract. The first well was completed as a dry hole about the middle of March, 1921. The lessee then commenced drilling another well in December, within the six months limit they had under the contract of June 18, 1920. This well was located in the southeast quarter of section 11, about 600 feet from the east line and about 600 feet from the south line of the leased premises, and was completed about June 8, 1922. There has been no other or further development of the 1,170 acres covered by the lease, except the two wells above mentioned. In 1923, after the well in section 11 came in, the lessors made