United States District Court, N.D. Oklahoma
OPINION AND ORDER
TERENCE C. KERN UNITED STATES DISTRICT JUDGE.
the Court are (1) Defendants Sezar Energy, L.P.'s and
Brittany Energy, LLC's Motion for Summary Judgment (Doc.
47); (2) Motion for Partial Summary Judgment of Petroflow
Energy Corporation and Brief in Support (Doc. 43); and (3)
Defendants' Motion to Strike the Affidavit of Kim Booth
Factual Background 
15, 2014, Plaintiff Petroflow Energy Corporation
(“Plaintiff” or “Petroflow”) entered
into a “Central Prospect Participation Agreement”
with Defendants Sezar Energy, L.P. (“Sezar”) and
Brittany Energy, LLC (“Brittany”) (collectively,
“Defendants”). All parties are in the business of
acquiring, exploring for, developing, and producing oil and
gas properties within Oklahoma. Prior to entering into the
Central Prospect Participation Agreement (the
“Agreement”), Plaintiff and Defendants had been
independently drilling wells and building infrastructure in
the Hunton Lime formation in several counties in eastern
central Oklahoma referred to by the parties as the
“Area of Mutual Interest, ” or “AMI.”
The Agreement states that the parties jointly desire to
exchange working interests in the AMI and jointly develop the
AMI. The Agreement notes that Petroflow, Petroflow Canada
Acquisition Corp., and Equal Energy Ltd.
(“Equal”) entered into an agreement scheduled to
close on or before July 31, 2014 (the “Equal
Acquisition”) and that Plaintiff would own multiple oil
and gas leases in the AMI upon closing its agreement with
Equal. The Agreement states that it is effective June 15,
2014, but not actionable until the closing of the Equal
Acquisition. The Equal Acquisition closed on July 31, 2014. A
Joint Operating Agreement (“JOA”) between Equal
and Sezar is incorporated as Exhibit B to the
parties dispute the meaning of certain terms and provisions
in the Agreement and the parties' rights and obligations
under the Agreement and JOA. Portions of the Agreement
relevant to the present motions are reproduced
“AMI Area” means all the property
described on Exhibit “A.”
. . .
“Initial Project Wells” means the first
three wells drilled.
“Leasehold Interests” means the oil and
gas leases and forced pooling orders/rights described on
Exhibit “A” attached hereto, together
with all other oil and gas leases, leasehold estates,
subleases, forced pooled interests, mineral interests,
operating rights and other rights, authorizing the owner
thereof to explore for and produce oil, gas, and related
hydrocarbons, and other minerals located in the AMI Area,
which are all subject to the Petroflow Reserved ORRI, if
“Other Project Wells” means,
collectively the other wells mutually agreed to by the
Parties in writing to be drilled in the AMI Area other than
the Initial Project Wells.
. . .
“Petroflow Reserved ORRI” means the
overriding royalty interest in the Leasehold Interests to be
retained by Petroflow, if applicable, equal to the difference
of lease burdens of record and 20%.
. . .
“Properties” means collectively, the (a)
Leasehold Interests, (b) Related Contracts, and (c) interests
related to the foregoing.
. . .
2.1. Subject to the terms and conditions of this Agreement,
Petroflow hereby agrees to sell, and Participant hereby
agrees to buy, (i) an undivided working interest in the
Properties covering or relating to the Initial Project Wells
of 30.00% BPO; 30.00% APO, and (ii) an undivided working
interest in Properties covering or relating to lands located
in the AMI Area (excluding the Initial Project Wells, but
including, without limitation, the Other Prospect Wells) of
30.00% BPO; 30.00% APO for Sezar or Brittany (if Sezar so
designates) . . . .
2.2. Participant shall pay to Petroflow actual costs of the
leases, title and other costs associated with the Leasehold
Interests representing Participant's proportionate share
of existing leasehold costs with a corresponding credit for
any leasehold purchased by Brittany or Sezar. Participant
agrees to further pay their proportionate share of all future
Properties acquisition and force pooling costs necessary for
the drilling of any subsequent well(s) in the AMI Area within
fifteen (15) days of invoice for same. Petroflow retains the
option to Cash Call Participant.
. . .
6.1. A Participant's decision to not participate in any
particular lease and/or well in the AMI Area (excluding the
Initial Project Wells, but, including, without limitation the
Other Prospect Wells) will not terminate this Agreement or
such Participant's rights hereunder to participate in
other leases and/or wells in the AMI Area as set forth in
6.2. After the drilling and completion of the Initial Project
Wells, all subsequent wells in the AMI Area (including,
without limitation, the Other Prospect Wells) shall be
governed by the Joint Operating Agreement; provided that, (i)
as set forth in Section 2.1 of this Agreement, Petroflow
agrees to sell, and Participant agrees to buy, an undivided
working interest in any additional Properties covering or
relating to lands located in the AMI Area (including, without
limitation, the Other Prospect Wells) of 30.00% BPO; 30.00%
APO for Sezar or Brittany if Sezar so designates, . . . and
(ii) as set forth in Section 2.2, Participant shall pay
actual costs of the leases, title and other costs associated
with the Leasehold Interests representing Participant's
proportionate share of existing leasehold costs, and
Participant will also pay its proportionate share of all
future Properties acquisition and force pooling costs
necessary for the drilling of any subsequent in accordance
with the Joint Operating Agreement.
. . .
11.7. In the event of a conflict between this Agreement and
the Joint Operating Agreement, Joint Operating ...