149 Primrose Operating Company, Inc. v. Jones

Richard F. Brown

 
The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
 
Primrose Operating Company, Inc. v. Jones¹ holds that the standard form drilling contract used by the parties did not provide that all operations conducted after the well exceeded the footage contract were to be conducted on a day work basis. The contract provided that “all drilling below the . . . specified contract depth shall be on a day work basis as defined herein.”² Under the terms of the contract, the drilling contractor had control over operations when operations were on a footage basis, and the operator had control over operations when operations were on a day work basis. It was undisputed that an employee of the drilling contractor was injured while operations were being conducted after the well exceeded the contract depth. There was no evidence to show at what depth operations were being conducted when the injury occurred.³
 
Judgment in excess of $3,000,000 for the injured worker was reversed and rendered because the worker failed to establish whether the operator or the drilling contractor was in control over the operations at the time of the accident. On appeal, the worker argued that once the well exceeded the contract depth, all operations were conducted on a day work basis, and therefore the operator was liable. The court disagreed after analyzing other parts of the drilling contract and finding provisions which appear to shift control (and thus liability)back and forth between the operator and the drilling contractor, depending upon the depth of the operations then being conducted.⁴
 
Although the court never identifies the form drilling contract, its provisions appear similar to forms commonly used in the industry. The significance of the case is the holding that control and liability for operations is not transferred when the contract depth is reached. Control (and thus liability) is determined by the depth at which operations are being conducted when the accident occurs.
 
1. 102 S.W.3d 188 (Tex. App.–Amarillo 2003, pet. filed).
2. Id. at 196.
3. Id. at 196-7.
4. Id. at

196-7.