Grayhill Drilling Co. v. Superior Oil Co.

Plaintiff appeals from a judgment of non-suit entered in its action to recover the balance alleged due from defendant for the drilling of an oil well. The evidence, stated most favorably to plaintiff, is as follows: Plaintiff entered into a written contract with defendant to drill an oil well in Oklahoma. The contract was negotiated with defendant’s agents Smith and Kunau and sent to California, where it was signed by defendant’s vice-president Cody. It was then returned to Oklahoma, where it was executed by plaintiff. It provided that the well should be drilled to the Gibson sand, which was expected to be encountered at or below 6,500 feet. Plaintiff was to receive $5.25 per foot for the hole drilled up to 6,500 feet in depth, and $6.00 per foot thereafter, plus certain amounts for standby time. Drilling proceeded until a depth of somewhat over 4,000 feet was reached, at which depth a steep dip in the geological formation was encountered, and drilling became much more expensive. Plaintiff’s vice-president and general manager Frederickson then informed defendant’s Oklahoma agents that plaintiff would be unable to continue with the drilling unless more favorable terms could be…