WHEELING – A man is suing Tug Hill Operating after he claims it failed to create a profit and pay royalties to him.
Daniel Bezilla is the owner of 182 new acres of oil and gas rights on and under a 182-acre tract of real estate situated in Green District in Wetzel County, according to a complaint filed June 28 in Wetzel Circuit Court and removed to federal court on Aug. 8.
Bezilla claims Tug Hill is the successor, lessee and/or assignee of the working interest rights in the lease.
The lease does not expressly waive any implied duty to develop the land and Tug Hill is bound by a common law implied duty to continuously develop the property after entering the lease, according to the suit.
Bezilla claims as of May 5, ten years after entering the lease, Tug Hill drilled and produced only one well on the property.
The failure to develop under the lease is not the direct result of the interference or actions of the plaintiff and Tug Hill has therefore breached the implied duty of the development, according to the suit.
Bezilla claims the lease provides that the terms will remain in force for a primary duration of two years and as long thereafter as oil and gas are produced in paying quantities. Tug Hill has not produced sufficient oil or gas or both in quantities which would cover the cost necessary to develop the property.
Tug Hill has failed to maintain the current well on the property, has failed to create a profit and has failed to pay a royalty amount to the plaintiff, according to the suit.
Bezilla claims royalties are to be paid on a monthly basis, but the defendant has not consistently paid royalties on a monthly basis.
The defendant has therefore breached the contract and the lease has terminated by its own terms, according to the suit.
Bezilla is seeking for the lease to be declared null, void and of no force, effect and validity. He is also seeking compensatory and punitive damages in the amounts of $3,083,000 and $240,000. He is being represented by Kyle Nuttall of Nuttall Legal.
Tug Hill is represented by Thomas C. Ryan and Travis L. Brannon of K&L Gates.
U.S. District Court for the Northern District of West Virginia case number: 5:17-cv-00123
