Bedore v. Ranch Oil Co.

a reasonable excuse or good cause, explaining why a party is
presently unable to offer evidence essential to justify opposi-
tion to the motion for summary judgment.33
If appellants believed they could not present evidence on the
failure to keep a lookout and/or failure to slow or stop the train
claim because they had not conducted discovery in that area,
they could have requested a continuance under § 25-1335 at
the time of the summary judgment final hearing. They did not.
Under these circumstances, the issuance of the discovery order
was not an abuse of discretion and did not result in revers-
ible error.
V. CONCLUSION
The district court erred in finding that appellants’ claim
based on failure to slow the train was preempted and in find-
ing that no genuine issue of material fact existed on that claim.
We therefore reverse, and remand for further proceedings on
that claim, but affirm the judgment of the district court in all
other respects.
A ffirmed in pArt, And in pArt reversed And
remAnded for further proceedings.
Wright, J., not participating.
33 Id.
bedOre v. raNCh OIL CO. 	553
Cite as 282 Neb. 553
mArlene Bedore , personAl representAtive of the estAte
of george John vlAsin, deceAsed, et Al ., Appellees And
cross -AppellAnts , v. rAnch oil compAny, A colorAdo
corporAtion, And BellAire oil compAny, A colorAdo
corporAtion, AppellAnts And cross -Appellees.
805 N.W.2d 68
Filed October 14, 2011. 	No. S-10-912.
1. Summary Judgment: Appeal and Error. an appellate court will affirm a lower
court’s grant of summary judgment if the pleadings and admitted evidence show
that there is no genuine issue as to any material facts or as to the ultimate infer-
ences that may be drawn from the facts and that the moving party is entitled to
judgment as a matter of law.
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:43 AM CST

2. Contracts: Judgments: Appeal and Error. The meaning of a contract is a ques-
tion of law, in connection with which an appellate court has an obligation to reach
its conclusions independently of the determinations made by the court below.
3. Damages: Judgments: Appeal and Error. With respect to damages, an appellate
court reviews the trial court’s factual findings under a clearly erroneous standard
of review.
4. Judgments: Costs: Appeal and Error. The standard of review for an award of
costs is whether an abuse of discretion occurred.
5. Appeal and Error. appellate courts do not generally consider arguments and
theories raised for the first time on appeal.
6. Contracts: Mines and Minerals. Where the parties have bargained for and
agreed on a time period for a temporary cessation clause, the agreed-on time
period will control over the common-law doctrine of temporary cessation allow-
ing a reasonable time for resumption of drilling operations.
7. Leases: Mines and Minerals. Oil and gas leases are to be strictly construed
against the lessee and in favor of the lessor.
8. Contracts. The fact that the parties have suggested opposing meanings of a dis-
puted instrument does not necessarily compel the conclusion that the instrument
is ambiguous.
9. Evidence: Appeal and Error. an appellate court cannot consider as evidence
statements made by the parties at oral argument or in briefs, as these are matters
outside the record.
10. Contracts. a court is not free to rewrite a contract or to speculate as to terms of
the contract which the parties have not seen fit to include.
11. Leases: Mines and Minerals: Waiver: Time. In oil and gas leases, it is well
established that the acceptance of royalties by a lessor after the expiration of the
primary term does not waive expiration of the lease or estop the landowner from
claiming the lease is no longer valid.
12. Damages: Appeal and Error. an award of damages may be set aside as exces-
sive or inadequate when, and not unless, it is so excessive or inadequate as to be
the result of passion, prejudice, mistake, or some other means not apparent in
the record.
13. Damages. The trier of fact may award only those damages which are the prob-
able, direct, and proximate consequences of the wrong complained of.
14. Damages: Proof. a plaintiff’s burden to prove the nature and amount of its dam-
ages cannot be sustained by evidence which is speculative and conjectural.
15. ____: ____. a claim for lost profits must be supported by some financial data
which permit an estimate of the actual loss to be made with reasonable certitude
and exactness.
16. Attorney Fees. If an attorney seeks a fee for his or her client, that attorney should
introduce at least an affidavit showing a list of the services rendered, the time
spent, and the charges made.
17. Rules of the Supreme Court: Pretrial Procedure: Appeal and Error. a rul-
ing under Neb. Ct. r. disc. § 6-326(b)(4)(C)(i) is reviewed for an abuse of
discretion.
554 	282 NebraSka repOrTS

appeal from the district Court for hayes County: dAvid
urBom, Judge. affirmed.
r.k. O’donnell and James r. korth, of McGinley, O’donnell,
reynolds & korth, p.C., L.L.O., for appellants.
Nancy S. Johnson, of Conway, pauley & Johnson, p.C., and
Thomas M. rhoads, of Glaves, Irby & rhoads, for appellees.
heAvicAn, 	c.J., 	Wright, 	connolly, 	gerrArd, 	stephAn,
mccormAck, and miller-lermAn, JJ.
mccormAck, J.
I. NaTUre OF CaSe
George John Vlasin and betty L. Vlasin, husband and wife,
leased the oil and gas rights to their land to bellaire Oil Company
and its affiliate, ranch Oil Company (collectively ranch Oil).
ranch Oil operated on one-half of the land described in the
lease. byron e. hummon, Jr., owner of hummon Corporation
(collectively hummon), operated on the other one-half of the
lease. after the primary term of the lease expired and the wells
stopped producing oil, George and betty entered into a new
lease agreement with hummon which encompassed the entirety
of their land. Upon learning of the agreement, ranch Oil took
action to revive one of its dormant wells by drilling out the
plug and inserting pumping equipment. ranch Oil relied on
a savings provision of the lease, which stated that “this lease
shall not terminate provided lessee commences operations for
drilling a well within sixty (60) days from such cessation.”
George and betty did not believe ranch Oil’s actions saved
the lease and, joined by hummon, brought suit against ranch
Oil in 2005 for declaratory judgment, trespass, and conversion.
after George’s death in October 2008, Marlene bedore was
appointed as personal representative of George’s estate. We will
collectively refer to George (later bedore), betty, and hummon
as “the plaintiffs.” The court ruled in favor of the plaintiffs, but
awarded only nominal damages. ranch Oil appeals, and the
plaintiffs cross-appeal.
bedOre v. raNCh OIL CO. 	555
Cite as 282 Neb. 553

II. baCkGrOUNd
1. leAses
In 1980, George and betty entered into an oil and gas
lease with Murphy Minerals Corporation for approximately
1,052 acres of their land in hayes County, Nebraska (Murphy-
George/betty lease). The Murphy-George/betty lease was for a
term of 10 years,
and as long thereafter as oil, gas, casinghead gas, casing-
head gasoline, condensate, or any of the products covered
by [the Murphy-George/betty] lease is, or can be, pro-
duced, and as long as provided in paragraphs 11, 12 and
14, and as long as any of the rights granted hereby are
being exercised by lessee.
paragraph 14 subjects the Murphy-George/betty lease to all
federal and state laws and regulations. paragraph 11 provides:
Notwithstanding anything in [the Murphy-George/betty]
lease contained to the contrary, it is expressly agreed that
if lessee shall commence operations for drilling at any
time while [the Murphy-George/betty] lease is in force,
[it] shall remain in force and its term shall continue so
long as such operations are prosecuted and, if production
of any of the minerals covered by [the Murphy-George/
betty] lease results therefrom, then as long as such pro-
duction continues.
paragraph 12 states:
If within the primary term of [the Murphy-George/betty]
lease, production on the leased premises shall cease from
any cause, [the Murphy-George/betty] lease shall not ter-
minate provided operations for the drilling of a well shall
be commenced before or on the next ensuing rental pay-
ing date; or provided lessee begins or resumes the pay-
ment of rentals in the manner and amount hereinbefore
provided. If after the expiration of the primary term
of [the Murphy-George/betty] lease, production on the
leased premises shall cease from any cause, [the Murphy-
George/betty] lease shall not terminate provided lessee
commences operations for drilling a well within sixty (60)
days from such cessation, and [the Murphy-George/betty]
556 	282 NebraSka repOrTS

lease shall remain in force during the prosecution of such
operations, and if production of any of the minerals cov-
ered by [the Murphy-George/betty] lease results there-
from, then as long as such production continues.
at the same time, George’s brother, Joseph peter Vlasin, and
his wife, doris M. Vlasin, entered into a similar lease agree-
ment with Murphy Minerals Corporation for their adjoin-
ing land.
2. A ssignment of leAseholds
In 1986, harvard petroleum Corporation, successor in inter-
est to Murphy Minerals Corporation, assigned its lease with
Joseph and doris to hummon (hummon-Joseph/doris inter-
est). harvard petroleum Corporation also assigned to hummon
approximately 	one-half 	of 	the 	1980 	Murphy-George/betty
lease (hummon-George/betty interest). The other one-half
of the Murphy-George/betty lease was retained by harvard
petroleum Corporation. In 1999, this one-half interest of the
Murphy-George/betty lease was conveyed to ranch Oil (ranch
Oil-George/betty interest).
3. pooling Agreement And Wells
hummon drilled and operated two wells on the hummon-
George/betty interest: well No. 1, drilled in 1985, and well No.
2, drilled in 1987. hummon drilled one well on the hummon-
Joseph/doris interest, well No. 1-34, in 1987. hummon also
drilled and maintained other wells in the area under leases with
neighboring landowners.
ranch Oil operated three wells on the ranch Oil-George/
betty interest. Well No. 34-22 was drilled in 1989. Well No.
34-23 was drilled in 1986. Well No. 34-31 was drilled in 1990.
These wells were drilled by its predecessor in interest, harvard
petroleum Corporation.
(a) pooling agreement
before hummon was able to drill well No. 1-34 in 1987,
the Vlasin parties entered into a pooling agreement so that
well No. 1-34 would be within a 40-acre legal subdivision, as
required by the rules and regulations of the Nebraska Oil and
bedOre v. raNCh OIL CO. 	557
Cite as 282 Neb. 553

Gas Conservation Commission (NOGCC).1 The pooling agree-
ment created a 40-acre “communitized area” for the produc-
tion, storage, processing, and marketing of the oil and gas pro-
duced from the land on which well No. 1-34 would be located.
The royalty proceeds from the oil production on communitized
areas would be divided in proportion to the parties’ relative
acre contributions. The pooling agreement stated:
It is understood and agreed that . . . well [No. 1-34] as
previously described, if completed as a producing oil
and/or gas well m[a]y be produced for the benefit of the
parties hereto under the provisions of this pooling agree-
ment . . . and the production of oil and/or gas from said
land shall constitute production in commercial quantities
under the terms and conditions of each of the Oil and Gas
Leases committed hereto.
Well No. 1-34 was drilled on land owned by Joseph and doris
and covered by the hummon-Joseph/doris interest. however,
approximately 11 acres of the communitized area for well
No. 1-34 was land described in the hummon-George/betty
interest.
(b) ranch Oil Well No. 34-31
ranch Oil’s well No. 34-31 appears to have been the last of
the ranch Oil wells to produce oil on the ranch Oil-George/
betty interest. It became inactive in 1997. Well No. 34-31
became the subject of the trespass and conversion action cur-
rently before us, when it was reopened by ranch Oil in 2005.
according to the director of NOGCC, before becoming
inactive, well No. 34-31 was a “producing oil well from the
basal Sand from the openhole interval of 4,324 to 4,335 feet.”
because of concerns that leaks from the well were invading
and damaging the basal sand oil reservoir for the area, the
operator of well No. 34-31 at that time positioned a sand plug
in the well from 4,315 to 4,335 feet. The operator subsequently
also placed a drillable cast iron bridge plug at a depth of 4,000
feet. In order to return well No. 34-31 to production following
1 See 267 Neb. admin. Code, ch. 3, § 13(b) (1981). See, also, Neb. rev.
Stat. §§ 57-908 and 57-909 (reissue 2010).
558 	282 NebraSka repOrTS

installation of the plugs, it would be necessary to drill out the
cast iron plug at 4,000 feet and then drill out the sand plug
from 4,315 to 4,335 feet.
(c) hummon Wells Nos. 1-34 and 2
hummon’s well No. 1-34, located on the hummon-Joseph/
doris interest, but within the 40-acre communitized area cover-
ing land on the hummon-George/betty interest, was plugged
and abandoned sometime around april 14, 2005. It is unclear
when, prior to that time, well No. 1-34 had ceased production.
hummon’s well No. 2 was the last working well located on the
hummon-George/betty interest. It ceased production and, in
december 2005, was plugged.
4. neW leAse BetWeen george And
Betty And hummon
Upon closure of well No. 1-34 on april 14, 2005, George
and betty considered all interests conveyed under the Murphy-
George/betty lease to be expired. although ranch Oil did not
expressly acknowledge the ranch Oil-George/betty interest
had expired, ranch Oil did attempt to negotiate a new lease
during the first week of april. according to George and betty,
when ranch Oil told them that it intended only to pump a pre-
existing well and had no intention of drilling new wells on the
land, they declined to enter into a new lease agreement with
ranch Oil.
hummon, having concluded that the hummon-George/betty
interest had expired through nonproduction, attempted to nego-
tiate a new lease with George and betty around the same time.
On april 14, 2005, George and betty entered into a new lease
agreement with hummon which gave hummon exclusive drill-
ing and operating rights on all of George and betty’s land
previously described in the Murphy-George/betty lease. This
included the part of the land that had been the subject of the
ranch Oil-George/betty interest.
The new lease agreement between hummon and George and
betty (hereinafter hummon-George/betty lease) was recorded
in the office of the hayes County clerk. George sent ranch
Oil correspondence on april 14, 2005, advising ranch Oil of
the hummon-George/betty lease and that ranch Oil’s rights as
bedOre v. raNCh OIL CO. 	559
Cite as 282 Neb. 553

lessee had expired. On april 21, hummon sent correspondence
to the NOGCC explaining its understanding that ranch Oil
had failed to further extend its lease by production and that the
ranch Oil-George/betty interest in George and betty’s land was
null and void. hummon advised the NOGCC that hummon had
negotiated the hummon-George/betty lease and that hummon
would be reporting to the NOGCC as the new lessee.
5. Attempts to preserve rAnch oil-
george /Betty interest
ranch Oil immediately attempted to take action to pre-
serve the ranch Oil-George/betty interest and to prevent the
hummon-George/betty lease from going into effect. ranch Oil
sent correspondence to hummon, as well as George and betty,
asserting that the ranch Oil-George/betty interest was still
in full force and effect and that George and betty could not
lease that land to hummon. ranch Oil relied on paragraph 12
of the Murphy-George/betty lease, which stated that it “shall
not terminate provided lessee commences operations for drill-
ing a well within sixty (60) days from such cessation.” ranch
Oil claimed the relevant cessation of operations occurred on
april 14, 2005, when hummon plugged well No. 1-34 and
that ranch Oil was in the process of reestablishing production
operations within 60 days from that date.
(a) drilling
Without seeking permission to do so, on May 3, 2005,
ranch Oil moved a drilling rig to the location of well No.
34-31, with the intention of removing the cast iron and sand
plugs and restoring well No. 34-31 to production. hummon
immediately sent ranch Oil a letter, dated May 4, 2005, assert-
ing that ranch Oil was trespassing on the land.
ranch Oil refused to vacate the property. On May 13, 2005,
ranch Oil began swabbing the well and recovered three barrels
of swab oil. ranch Oil recovered four barrels of swab oil on
May 14. ranch Oil filed reports with the NOGCC reflecting
“production” as of May 13, 2005.
On May 16, 2005, ranch Oil began using the drill rig to
break up the bridge plug into small pieces. a bailer was then
560 	282 NebraSka repOrTS

used to drill out the debris and remove the debris from the
wellbore. at one point, the drilling was halted because the
drill was unable to remove the hard fill at 4,315 feet. ranch
Oil eventually was able to use a “cutrite mill” to drill it out.
The president of ranch Oil described this as “the remaining
20 feet of fill.” he stated that the “drilling operation” in well
No. 34-31 “opened up the productive oil sand from 4324 to
4335 feet.” according to the testimony of the director of the
NOGCC, ranch Oil’s operations did not drill well No. 34-31
any deeper than it was before, explaining that “basal sand is
about as deep as anybody is going to drill there.”
during June 2005, ranch Oil continued swabbing oil from
well No. 34-31. The swab oil initially contained small per-
centages of oil. It progressed to larger percentages until, by
June 18, ranch Oil swabbed 10 barrels of 100-percent oil. On
June 29, ranch Oil was able to place an insert pump in well
No. 34-31. ranch Oil started pumping the well on July 1.
(b) production
Lease operating statements for the period from May 2005 to
May 2006 show that ranch Oil did not sell any oil extracted
from well No. 34-31 until august 2005, when it sold 122
barrels for $7,149. No sales were recorded for September or
October. In November, ranch Oil sold 139 barrels for $7,421.
after that, the next sale was not until May 2006, when ranch
Oil sold 128 barrels for $7,928. From those sales, ranch Oil
paid $2,812 in royalties, $472 in severance tax, and $5,334 in
operating expenses, not including the investment involved in
reopening the well.
From June to december 2006, lease operating statements
show no oil revenue and show $18,622 in operating expenses.
Lease operating statements appear to show production of 4 bar-
rels of oil in July, 34 in august, 15 in September, 1 in October,
13 in November, and 1 in december.
6. the plAintiffs file suit
AgAinst rAnch oil
In June 2005, affidavits were filed with the hayes County
clerk’s office averring that no well had been drilled and that
bedOre v. raNCh OIL CO. 	561
Cite as 282 Neb. 553

there had been no production of oil or gas since april 14,
2005, on the Murphy-George/betty lease. On august 25, the
plaintiffs filed suit against ranch Oil seeking declaratory judg-
ment that the Murphy-George/betty lease and the ranch Oil-
George/betty interest in the Murphy-George/betty lease were
null, void, and of no further force and effect. The plaintiffs also
alleged damages from trespass and conversion.
ranch Oil raised several affirmative defenses to the lawsuit,
including waiver, laches, estoppel, unclean hands, consent, and
accord and satisfaction. ranch Oil counterclaimed for quiet
title of their leasehold interest, injunctive relief, breach of
contract, conspiracy to defraud, and tortious interference with
contract rights.
George and betty accepted a royalty payment from ranch
Oil on October 4, 2005, in the amount of $872.18 for produc-
tion on well No. 34-31. On October 26, George and betty’s
attorney advised ranch Oil that George and betty’s acceptance
of royalty payments was not to be construed as a ratification
or endorsement of the validity of the ranch Oil-George/betty
interest; it was simply acknowledgment of their right to be
compensated for minerals severed from their land. also on
October 26, George and betty’s attorney requested that the
distributor of the oil suspend the further payment of proceeds
attributable to the working interest and overriding royalty inter-
est in production from well No. 34-31, until the dispute con-
cerning lease rights was resolved. George and betty accepted
two more royalty checks from ranch Oil: $905.35 on January
19, 2006, and $967.24 on July 12.
(a) declaratory Judgment for the plaintiffs
ranch Oil filed a motion for partial summary judgment ask-
ing the court to determine that the ranch Oil-George/betty
interest had been held in production until april 15, 2005, by
virtue of the operation of hummon’s well No. 1-34 and that
well No. 34-31 began producing oil on May 13, within the 60-
day period referred to by paragraph 12 of the Murphy-George/
betty lease. ranch Oil asked that the court declare the Murphy-
George/betty lease in effect and the april 14, 2005, hummon-
George/betty lease void. ranch Oil also filed a motion for
562 	282 NebraSka repOrTS

partial summary judgment in favor of the affirmative defenses
that the plaintiffs’ claims were barred by waiver and estoppel,
based on George and betty’s acceptance of royalty payments.
Finally, ranch Oil filed a general motion for summary judg-
ment in its favor and against the plaintiffs.
The plaintiffs filed a general motion for summary judgment
in their favor and against ranch Oil as to all issues except for
damages. The plaintiffs argued that ranch Oil’s commence-
ment of operations was not for “‘the drilling of a well’” and
that, in any event, the cessation of production in well No. 1-34
did not inure to the benefit of ranch Oil and did not provide
the relevant date for the 60-day period described in paragraph
12. The plaintiffs also considered the small amounts of oil pro-
duced from well No. 34-31 to be insufficient “production” to
maintain the Murphy-George/betty lease, but they considered
the facts of production contested and inappropriate for sum-
mary judgment. all parties agreed that there was no factual dis-
pute as to most matters except damages and possibly the issue
of whether ranch Oil’s operations of well No. 34-31 produced
oil in paying quantities or were profitable in nature.
The district court denied ranch Oil’s motions and granted
partial summary judgment in favor of the plaintiffs, conclud-
ing that the plaintiffs were entitled to a judgment declaring
that the Murphy-George/betty lease and ranch Oil’s interest
therein were no longer in effect and that the new hummon-
George/betty lease was valid and in effect. The court explained
that there was no material issue of fact as to the activities con-
ducted on well No. 34-31. even assuming that april 14, 2005,
was the relevant date from which the 60-day period began,
under the plain meaning of the contract, the reworking opera-
tions conducted in this case did not qualify as “‘operations for
the drilling of a well.’” because “‘operations for the drilling of
a well’” did not occur within 60 days from april 14, ranch Oil
failed to hold the ranch Oil-George/betty interest through the
savings clause of paragraph 12, and the Murphy-George/betty
lease had expired.
The court denied ranch Oil’s motions for summary judg-
ment based on waiver and estoppel and denied the plaintiffs’
bedOre v. raNCh OIL CO. 	563
Cite as 282 Neb. 553

motion for summary judgment as to their trespass and conver-
sion claims. Various subsequent motions by ranch Oil relating
to the order for summary judgment were overruled, and the
matter was set for a bench trial on the plaintiffs’ claims for
trespass and conversion. The record fails to demonstrate that,
at any time, the plaintiffs sought to bifurcate their damages and
attorney fees claims.
(b) Trial on Trespass and Conversion Claims
at the trial on the plaintiffs’ action for trespass and conver-
sion, the plaintiffs presented expert and lay witness testimony
as to surface damage surrounding well No. 34-31 and the esti-
mated cost of remedying that damage. They also testified as to
the cost of ripping up a roadway to the well and lost revenue
over the course of 3 years of $195 from 5 acres of land not able
to be grazed as a result of the damage surrounding the well.
(i) Restoration of Land
On cross-examination, the plaintiffs’ witnesses admitted that
they were unable to identify when the alleged surface dam-
age occurred. ranch Oil presented testimony disputing the
estimated price of restoring the land. ranch Oil also presented
testimony from the director of the NOGCC, who explained
that the NOGCC had the authority and mandate to compel the
bonded operator of the well, ranch Oil, to conduct cleanup
operations upon closure of the well. The director testified that
the end result of these operations, supervised by the NOGCC,
would be to restore the land to be capable of being used in the
manner it was used prior to drilling the well.
(ii) Lost Interest Income
hummon presented evidence, over ranch Oil’s objection,
of interest income that it would have made had it been able to
drill a well on the land occupied by ranch Oil. The calcula-
tions were made by Tyler Sanders, a petroleum geologist who
works for hummon. Sanders admitted there would have been
no profits because any well drilled on the land would have
operated at a loss. Sanders also admitted that the oil from
the undrilled well is still in place, producible, and not lost.
564 	282 NebraSka repOrTS

Nevertheless, Sanders sought to demonstrate damages using
monthly posted oil prices from May 2005 to the time of trial,
adding a 5-percent annual percentage rate, deducting estimated
expenses, and assuming production of 11 barrels a day with no
decline. Sanders’ calculations resulted in an asserted loss of
$18,179.77. In essence, this amount represented the estimated
interest value of the estimated sales of oil from a well hummon
would have drilled on the land occupied by ranch Oil.
The estimate of 11 barrels a day was based on what Sanders
asserted were similar wells to the south, which share produc-
tion from a common reservoir—although Sanders admitted on
cross-examination that those wells had a higher cumulative
production than wells located on land under the Murphy-
George/betty lease. The president of bellaire Oil Company
testified that the wells to the south are structurally different due
to thicker sands and more water. They produce oil more effi-
ciently than wells on George and betty’s land. he also noted
that it would be impossible to estimate the production output
without knowing the exact location of the well. It was undis-
puted that hummon had not yet applied for a permit to drill on
George and betty’s land.
The 5-percent annual percentage rate was described by
Sanders as a simple annual interest. during cross-examination,
Sanders conceded he did not know the average interest rate for
deposits in hayes County, either presently or during the time
which hummon would have operated a well. and the president
of bellaire Oil Company contested the methodology hummon
presented on lost interest income, asserting that the calcula-
tions omitted royalties and taxes and that they were based on
noncomparable lease expenses.
(iii) Costs of Plugging Wells
hummon also presented evidence of how much it would cost
to plug ranch Oil’s wells, while ranch Oil presented evidence
that the figures presented by hummon were inflated. hummon
had not been ordered to plug the wells that had been operated
by ranch Oil, nor was any evidence presented that hummon
would need to plug the wells to effectively operate on the
hummon-George/betty lease. but hummon was concerned
bedOre v. raNCh OIL CO. 	565
Cite as 282 Neb. 553

about future liability for this cost. ranch Oil presented the
testimony of the director of the NOGCC who explained that,
in accordance with law and policy, the NOGCC would hold
the current bonded operator of the wells in question, ranch
Oil, responsible for any cleanup and plugging costs to the
NOGCC’s satisfaction. hummon conceded that it would not
have a claim for damages relating to the cost of plugging the
wells if the NOGCC determined that plugging the wells was
ranch Oil’s responsibility.
(c) Order of Nominal damages for the plaintiffs
The court, as the trier of fact, ruled that the plaintiffs had
failed to show that any damage to the property was caused dur-
ing the time of ranch Oil’s trespass and conversion. The court
explained that the plaintiffs failed to show when the damage
occurred and who caused the damage. The court also concluded
that pursuant to Neb. rev. Stat. § 57-905 (reissue 2010), the
NOGCC had exclusive authority to compel any cleanup of the
well site. Thus, while ranch Oil is legally required to restore
the premises, the plaintiffs failed to prove their claim for dam-
ages for restoration of the premises. The court similarly found
that the NOGCC had the exclusive authority to require ranch
Oil to plug the wells and that this was not a matter for which
the plaintiffs were entitled to damages.
The court found that the plaintiffs failed to prove their claim
for lost profits. The court noted that Sanders assumed produc-
tion and interest rates that were not based in fact and concluded
that Sanders’ methodology for determining lost profits was not
valid. In addition, the court noted that Neb. rev. Stat. § 57-205
(reissue 2010) allows only the owner of the leased premises to
recover damages and that there was no evidence of lost profits
suffered by the landowners.
The court found that the plaintiffs failed to meet their bur-
den of proof on the issue of attorney fees, because no evidence
was submitted to the court on attorney fees. because of the
failure to prove any damages, the court issued an order dis-
missing the plaintiffs’ claims for trespass and conversion and
ranch Oil’s counterclaim. The court awarded George and betty
566 	282 NebraSka repOrTS

costs and nominal damages in the amount of $100, pursuant
to § 57-205.
The plaintiffs filed a motion to alter or amend the judgment,
or, in the alternative, for new trial. The plaintiffs principally
took issue with the district court’s failure to award the amount
of damages to which their witnesses attested. The plaintiffs
also asserted that the issue of attorney fees was whether they
were recoverable, not their amount, since the fees were ongo-
ing. The court overruled the motion for new trial, and the par-
ties filed the present appeal and cross-appeal.
III. aSSIGNMeNTS OF errOr
ranch Oil assigns that the district court erred in failing
to find that (1) the plaintiffs were required to give notice to
ranch Oil of any alleged breach of the Murphy-George/betty
lease with a demand that the terms of the implied covenant of
production be complied with within a reasonable time as a con-
dition precedent to the filing of the subject lawsuit demanding
forfeiture of the Murphy-George/betty lease; (2) all that was
required under the Murphy-George/betty lease was commence-
ment of drilling operations and that ranch Oil’s activities had,
in fact, been a commencement of drilling operations within
60 days of april 14, 2005; and (3) the plaintiffs’ acceptance
of royalty payments from the production of the well waived
any alleged breach of the Murphy-George/betty lease and
estopped the plaintiffs from asserting such claims and bringing
this lawsuit.
On cross-appeal, the plaintiffs assign that the district court
erred in failing to (1) find liability for trespass and conversion,
(2) award sufficient damages, (3) award hummon damages for
the cost of plugging abandoned wells, and (4) award costs and
attorney fees.
IV. STaNdard OF reVIeW
[1] an appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
bedOre v. raNCh OIL CO. 	567
Cite as 282 Neb. 553

and that the moving party is entitled to judgment as a matter
of law.2
[2] The meaning of a contract is a question of law, in con-
nection with which an appellate court has an obligation to
reach its conclusions independently of the determinations made
by the court below.3
[3] With respect to damages, an appellate court reviews the
trial court’s factual findings under a clearly erroneous standard
of review.4
[4] The standard of review for an award of costs is whether
an abuse of discretion occurred.5
V. aNaLYSIS
Generally, an oil and gas lease consists of a definite term
and an indefinite term beyond which the definite term of the
lease may be extended.6 The definite term is a specified explora-
tory period within which the lessee invests in discovering oil
and establishing production.7 Thereafter, the lease may be con-
tinued into an indefinite term, so long as production continues,
through a continuous production clause.8
When such continuous production ceases, the lease auto-
matically terminates unless there is some other provision which
would prevent termination.9 a cessation of production clause,
also referred to as a “resumption of operations” or “savings
clause,” may make it possible for the lessee to preserve the
2 Mandolfo v. Mandolfo, 281 Neb. 443, 796 N.W.2d 603 (2011).
3 Davenport Ltd. Partnership v. 75th & Dodge I, L.P., 279 Neb. 615, 780
N.W.2d 416 (2010).
4 ADT Security Servs. v. A/C Security Systems, 15 Neb. app. 666, 736
N.W.2d 737 (2007).
5 See Malicky v. Heyen, 251 Neb. 891, 560 N.W.2d 773 (1997).
6 38 am. Jur. 2d Gas and Oil § 211 (2010).
7 See, e.g., Fremont Lbr. Co. v. Starrell Pet. Co., 228 Or. 180, 364 p.2d 773
(1961).
8 See id.
9 2 eugene kuntz, a Treatise on the Law of Oil and Gas § 26.8 (1989 &
Cum. Supp. 2009). See, also, Kirby v. Holland, 210 Neb. 711, 316 N.W.2d
746 (1982).
568 	282 NebraSka repOrTS

lease beyond the primary term by resumption of operations if
production should cease.10 The various clauses of an oil and gas
lease are designed to complement one another and to be mutu-
ally exclusive in operation.11
[5] The Murphy-George/betty lease contained a primary
definite term of 10 years, with a provision for extension by
continuous production.12 The parties agree that, at the latest,
production ceased by april 14, 2005. In their pleadings and at
the hearings on the motions for summary judgment, ranch Oil
asserted that the Murphy-George/betty lease was still valid,
because it had met the requirements of paragraph 12. Now,
on appeal, it also argues that its operations satisfied paragraph
11. appellate courts do not generally consider arguments and
theories raised for the first time on appeal.13 Nevertheless, we
find the language of the Murphy-George/betty lease to be
clear. because production ceased after expiration of the pri-
mary term, the relevant provision is the savings clause found
in paragraph 12:
If after the expiration of the primary term of [the Murphy-
George/betty] lease, production on the leased premises
shall cease from any cause, [the Murphy-George/betty]
lease shall not terminate provided lessee commences
operations for drilling a well within sixty (60) days from
such cessation, and [the Murphy-George/betty] lease shall
remain in force during the prosecution of such operations,
and if production of any of the minerals covered by [the
Murphy-George/betty] lease results therefrom, then as
long as such production continues.
[6] Where the parties have bargained for and agreed on a
time period for a temporary cessation clause, the agreed-on
time period will control over the common-law doctrine of tem-
porary cessation allowing a “reasonable time” for resumption of
10 See 4 eugene kuntz, a Treatise on the Law of Oil and Gas § 47.3 at 98
(1990 & Cum. Supp. 2009).
11 See id., § 47.4(f)(3).
12 See 2 kuntz, supra note 9, § 26.4.
13 See Tolbert v. Jamison, 281 Neb. 206, 794 N.W.2d 877 (2011).
bedOre v. raNCh OIL CO. 	569
Cite as 282 Neb. 553

drilling operations.14 Thus, ranch Oil needed to “commence[]
operations for drilling a well” no more than 60 days from the
date of cessation of production. because we find the issue of
what acts qualify as “commenc[ing] operations for drilling a
well” is decisive, we, like the district court, will assume, with-
out deciding, that production on Murphy-George/betty lease
ceased on april 14, 2005.
1. commencement of operAtion
for drilling Well
[7] In interpreting a contract, a court must first determine, as
a matter of law, whether the contract is ambiguous.15 a contract
is ambiguous when a word, phrase, or provision in the contract
has, or is susceptible of, at least two reasonable but conflicting
interpretations or meanings.16 as for clauses of special limita-
tion, or so-called unless clauses, controlling the duration of a
lessee’s interest in an oil and gas lease, we have held that such
clauses give rise to a strict construction in favor of the lessor
and against the lessee.17 This conforms to the general rule that
oil and gas leases are to be strictly construed against the lessee
and in favor of the lessor.18
[8] When the terms of the contract are clear, a court may not
resort to rules of construction, and the terms are to be accorded
their plain and ordinary meaning as the ordinary or reasonable
person would understand them.19 The fact that the parties have
suggested opposing meanings of a disputed instrument does
not necessarily compel the conclusion that the instrument is
ambiguous.20
14 Hoyt v. Continental Oil Co., 606 p.2d 560, 564 (Okla. 1980). accord,
Wilson v. Talbert, 259 ark. 535, 535 S.W.2d 807 (1976); Greer v. Salmon,
82 N.M. 245, 479 p.2d 294 (1970).
15 Katherine R. Napleton Trust v. Vatterott Ed. Ctrs., 275 Neb. 182, 745
N.W.2d 325 (2008).
16 Davenport Ltd. Partnership v. 75th & Dodge I, L.P., supra note 3.
17 See Valentine Oil Co. v. Powers, 157 Neb. 71, 59 N.W.2d 150 (1953).
18 See id.
19 Thrower v. Anson, 276 Neb. 102, 752 N.W.2d 555 (2008).
20 See Sack Bros. v. Tri-Valley Co-op, 260 Neb. 312, 616 N.W.2d 786
(2000).
570 	282 NebraSka repOrTS

ranch Oil argues that any operations preparatory to restor-
ing an old well to production would constitute “commenc[ing]
operations for drilling a well.” The plaintiffs read the phrase
more narrowly and argue that the end result of the operations
must be the making of a new hole in the ground. The meaning
of “commence[] operations for drilling a well” is a question of
first impression for our court.
(a) Commencement
In its reading of the Murphy-George/betty lease, ranch Oil
first relies on the fact that the term “commencement” has been
held to encompass preparatory activity, such as making and
clearing a location and delivering equipment to the well site.
We agree that it is the general rule that activities preparatory to
the specified operation are sufficient to satisfy commencement
clauses.21 however, the literal provisions of the clause in ques-
tion will govern what type of operation must be commenced
or resumed.22
Thus, if the clause specifically provides for the resumption
or commencement of drilling, no other operation will satisfy
the clause.23 If the clause is to commence drilling operations,
then the preparatory acts must be “‘preliminary to the begin-
ning of the actual work of drilling’” and performed with “‘the
bona fide intention to proceed thereafter with diligence toward
the completion of the well, constitute a commencement or
beginning of a well or drilling operations within the mean-
ing of th[e] clause of the lease.’”24 In the case of a provision
requiring that the lessee commence to drill a well, it is not nec-
essary that the lessee actually be penetrating the surface with
drilling equipment within the period of time specified by the
clause,25 but it has been said that “the preparatory activity must
21 See 3 eugene kuntz, a Treatise on the Law of Oil and Gas § 32.1 (1989
& Cum. Supp. 2009).
22 4 kuntz, supra note 10, § 47.5.
23 Id.
24 Walton v. Zatkoff, 372 Mich. 491, 498, 127 N.W.2d 365, 369 (1964), quot-
ing 2 W.L. Summers, The Law of Oil and Gas § 349 (perm. ed. 1959).
25 3 kuntz, supra note 21, § 32.3(b). See, also, 2 Summers, supra note 24.
bedOre v. raNCh OIL CO. 	571
Cite as 282 Neb. 553

be in good faith and must be of the type which is associated
with or can be expected to precede immediately the process of
making [a] hole.”26
(b) Operations
ranch Oil also relies on general definitions of “opera-
tions.”27 We agree with the plaintiffs that the cases relied on
by ranch Oil are inapposite to the issue of what “commence[]
operations for drilling a well” means. In Bargsley v. Pryor
Petroleum Corp.,28 the oil and gas lessee made similar argu-
ments. The lessee noted that he had “long-strok[ed]” the exist-
ing well to increase its pumping capabilities; laid pipeline to
the well; performed electrical work; maintained electricity; and
installed, checked, and repaired flow lines.29 he argued that
the lease remained in force under the language in the contract
allowing for extensions if “‘drilling operations’” were being
prosecuted.30 but the court disagreed, explaining that “[w]hile
these activities under certain circumstances might be consid-
ered to be ‘operations,’ that is a question we do not address as
these ‘operations’ are not ‘drilling operations’ as a matter of
law.”31 The operations undertaken, the court concluded, were
not preliminary to the actual work of drilling.32
(c) drilling of Well
The terms “commence” and “operations,” as used in the
Murphy-George/betty lease, plainly refer to the act of “drill-
ing a well.” The phrase “drilling a well” is not defined in the
Murphy-George/betty lease itself. The Oil and Gas Lien act33
26 4 kuntz, supra note 10, § 47.4(3) at 125.
27 See, e.g., Walton v. Zatkoff, supra note 24; Breaux v. Apache Oil
Corporation, 240 So. 2d 589 (La. app. 1970).
28 Bargsley v. Pryor Petroleum Corp., 196 S.W.3d 823 (Tex. app. 2006).
29 Id. at 826.
30 Id.
31 Id.
32 Id.
33 See Neb. rev. Stat. § 57-801 et seq. (reissue 2010).
572 	282 NebraSka repOrTS

defines “drilling” as “drilling, digging, torpedoing, acidizing,
cementing, completing, or repairing,”34 but it does not define
“drilling a well.” Neither do the NOGCC’s rules and regula-
tions define “drilling a well.”
The Concise Oxford american dictionary defines the verb
“drill” as to “produce (a hole) in something by or as if by
boring with a drill,” to “make a hole in (something) by boring
with a drill,” and to “make a hole in or through something by
using a drill.”35 as ranch Oil points out, other courts have held
that the use of the simple phrase “drilling operations” in an oil
and gas lease can encompass the activity of drilling through a
cement plug of an old well—since the lessee is making a hole,
with a drill, through something.36 but here, the relevant phrase
defining the operations which must be commenced is “drilling
a well.”
The word “well” is defined as “a shaft sunk into the ground
to obtain water, oil, or gas.”37 Thus, under these definitions,
“drilling a well” would be to produce, by using a drill, a long,
narrow hole sunk into the ground to obtain water, oil, or gas.
We conclude that this definition generally conforms to the plain
meaning of the phrase as used in the Murphy-George/betty
lease. and we conclude that using a drill to simply remove
cast iron and sand plugs from an old well is not “operations
for drilling a well” as contemplated by the Murphy-George/
betty lease.
The weight of authority agrees that general reworking opera-
tions, which do not involve making a new hole, are not
“operations for drilling a well.” One commentator states that
“reworking operations will not satisfy a clause that requires
the resumption of ‘operations for drilling a well.’”38 While
cases on this issue are rare, in Petroleum Engineers Producing
34 § 57-801(8).
35 Concise Oxford american dictionary 275 (2006).
36 See, Huhn v. Marshall Exploration, Inc., 337 So. 2d 561 (La. app. 1976);
Browning v. Cavanaugh, 300 S.W.2d 580 (ky. 1957).
37 Concise Oxford american dictionary, supra note 35 at 1029.
38 4 kuntz, supra note 10, § 47.5 at 137.
bedOre v. raNCh OIL CO. 	573
Cite as 282 Neb. 553

Corp. v. White,39 the Supreme Court of Oklahoma held that
the drilling of input wells and other repressuring operations
designed to produce additional oil from an old well were not
“‘“commenc[ing] to drill a well”’” within the terms of the
lease. Similarly, in French v. Tenneco Oil Co.,40 the court held
that reworking operations, which included “swabbing the well,
blowing the well to the atmosphere, acidizing, injecting [a
chelating agent], and pulling tubing, reperforating and sand
fracturing,” did not satisfy a clause providing that the lease will
not terminate if “‘operations for drilling a well’” are resumed
within 60 days of cessation of operations.
[9] ranch Oil points out that one court has considered
“reworking or redrilling” an old well to be “drilling” a well, as
that term was used in an oil and gas lease,41 but we note that
one of the wells in that case was “redrill[ed]” to a significantly
greater depth than it had been before.42 although counsel for
ranch Oil has asserted in oral arguments that ranch Oil drilled
well No. 34-31 deeper than it had been prior to being closed,
we find no evidence of that fact from the record. This court
cannot consider as evidence statements made by the parties
at oral argument or in briefs, as these are matters outside the
record.43 a bill of exceptions is the only vehicle for bringing
evidence before an appellate court; evidence which is not made
a part of the bill of exceptions may not be considered.44 all
the evidence in the record, viewed in a light most favorable to
ranch Oil, indicates that drilling equipment was used to remove
the fill and bridge that had been placed in the well and that the
depth of well No. 34-31 was approximately the same after these
reworking operations as before—4,335 feet deep.
39 Petroleum Engineers Producing Corp. v. White, 350 p.2d 601, 603 (Okla.
1960).
40 French v. Tenneco Oil Co., 725 p.2d 275, 276-77 (Okla. 1986).
41 brief for appellants at 16, quoting Kothmann v. Boley, 158 Tex. 56, 308
S.W.2d 1 (1957).
42 See Kothmann v. Boley, supra note 41, 158 Tex. at 59, 308 S.W.2d at 7.
43 See Wolgamott v. Abramson, 253 Neb. 350, 570 N.W.2d 818 (1997).
44 Coates v. First Mid-American Fin. Co., 263 Neb. 619, 641 N.W.2d 398
(2002).
574 	282 NebraSka repOrTS

[10] While the parties to the Murphy-George/betty lease
could have written the savings provision of paragraph 12 to
include both the “commenc[ing] of operations for drilling a
well” and reworking—or even general “drilling operations”—
they did not. a court is not free to rewrite a contract or to
speculate as to terms of the contract which the parties have not
seen fit to include.45 On the face of the instrument, the parties
did not intend that restoring an old well to production, through
use of drilling equipment to remove fill and a bridge plug,
would be sufficient to save the Murphy-George/betty lease
once there had been a cessation of production. This is presum-
ably because the parties anticipated that an old well, reopened,
would not produce sufficient quantities of oil for the lessors to
have an interest in prolonging the Murphy-George/betty lease.
We find that the phrase “commence[] operations for drilling a
well” is unambiguous and that, viewing the evidence in a light
most favorable to ranch Oil, ranch Oil did not “commence[]
operations for drilling a well” within 60 days of cessation
of production.
2. WAiver And estoppel
[11] even if its actions did not satisfy the terms of the
savings clause, ranch Oil argues that we should reverse the
district court’s grant of declaratory judgment for the plaintiffs,
because George and betty accepted royalty payments and have
thereby waived the breach. ranch Oil relies on landlord-tenant
case law addressing the acceptance of rent after a lessee’s
default. but, in oil and gas leases, it is well established that the
acceptance of royalties by a lessor after the expiration of the
primary term does not waive expiration of the lease or estop
the landowner from claiming the lease is no longer valid.46 It
has been explained that it would be improper to estop the les-
sor from denying that the lease has terminated based merely
on the acceptance of a royalty, because the royalty is but a
45 Gary’s Implement v. Bridgeport Tractor Parts, 270 Neb. 286, 702 N.W.2d
355 (2005).
46 See, e.g., 2 Summers, supra note 24, § 305. See, also, 3 kuntz, supra note
21, § 43.2.
bedOre v. raNCh OIL CO. 	575
Cite as 282 Neb. 553

fraction of the total production to which the lessor would be
entitled to receive if the lessee were not occupying the land.47
The district court did not err in denying ranch Oil’s estop-
pel claim.
ranch Oil’s assignment of error regarding the district court’s
failure to find that George and betty were required to give
notice of any alleged breach of the Murphy-George/betty lease
does not appear to have been argued in its brief. In order to
be considered by an appellate court, the alleged error must be
both specifically assigned and specifically argued in the brief
of the party asserting the error.48 Nevertheless, we note that it
is also well established that if the lessee fails to act under a
clause of special limitation in an oil and gas lease to keep the
lease in force, then “the lease terminates without any action
being required by the lessor or the lessee.”49 In other words,
termination of the lease is “automatic and self-operating.”50
accordingly, the lessor is under no obligation to give notice of
termination to the lessee.51
We conclude that the district court properly denied ranch
Oil’s affirmative defenses. because ranch Oil failed to satisfy
the savings clause of the Murphy-George/betty lease as a mat-
ter of law and failed to raise any issue of material fact as to
its affirmative defenses of waiver and estoppel, we affirm the
partial summary judgment of the district court declaring the
Murphy-George/betty lease to no longer be in force and effect.
We turn now to the plaintiffs’ counterclaims.
3. plAintiffs’ cross -A ppeAl
[12] We next address the plaintiffs’ cross-appeal, asserting
that the district court erred in failing to award hummon the
cost of plugging ranch Oil’s wells, and in failing to award
47 See 3 kuntz, supra note 21, § 43.2.
48 In re Interest of Hope L. et al., 278 Neb. 869, 775 N.W.2d 384 (2009).
49 Valentine Oil Co. v. Powers, supra note 17, 157 Neb. at 85, 59 N.W.2d at
159.
50 Id.
51 See id.
576 	282 NebraSka repOrTS

the plaintiffs damages resulting from trespass and conversion,
costs and attorney fees, and deposition expenses. With respect
to damages, an appellate court reviews the trial court’s factual
findings under a clearly erroneous standard of review.52 The
fact finder’s determination is given great deference53 and will
not be disturbed on appeal if it is supported by evidence and
bears a reasonable relationship to the elements of damages
proved.54 an award of damages may be set aside as exces-
sive or inadequate when, and not unless, it is so excessive or
inadequate as to be the result of passion, prejudice, mistake,
or some other means not apparent in the record.55 We affirm
the district court’s judgment on all matters except deposi-
tion expenses.
(a) Surface damage and estimated
Cost of plugging
[13] damages, like any other element of a plaintiff’s cause of
action, must be pled and proved, and the burden is on the plain-
tiff to offer evidence sufficient to prove the plaintiff’s alleged
damages.56 The trier of fact may award only those damages
which are the probable, direct, and proximate consequences of
the wrong complained of.57 as the district court noted, none of
the witnesses were able to testify that the alleged surface dam-
age occurred during the time of ranch Oil’s unlawful occu-
pancy. Thus, they were unable to prove surface damages caused
as a result of the trespass and conversion theories under which
the plaintiffs sought relief.
Moreover, claims for restoration of surface damage sus-
tained through reasonable use of the surface estate do not
sound in tort, but are instead recoverable in an action in
52 ADT Security Servs. v. A/C Security Systems, supra note 4.
53 Fickle v. State, 273 Neb. 990, 735 N.W.2d 754 (2007).
54 See Norman v. Ogallala Pub. Sch. Dist., 259 Neb. 184, 609 N.W.2d 338
(2000).
55 Roth v. Wiese, 271 Neb. 750, 716 N.W.2d 419 (2006).
56 J.D. Warehouse v. Lutz & Co., 263 Neb. 189, 639 N.W.2d 88 (2002).
57 See Steele v. Sedlacek, 267 Neb. 1, 673 N.W.2d 1 (2003).
bedOre v. raNCh OIL CO. 	577
Cite as 282 Neb. 553

contract for breach of express covenants in the lease—and
sometimes, under implied covenants of the lease.58 In this case,
the plaintiffs made no argument for damages based on breach
of contract.
The duty to plug abandoned or disused oil and gas wells
is most often found to be a creature of statutory or regulatory
enactment.59 Indeed, as the director of the NOGCC testified,
the NOGCC has been given the authority to regulate and
compel the plugging of wells and to order surface restora-
tion.60 NOGCC regulations state that the person who drilled
or caused to be drilled any well for oil or gas shall be liable
and responsible for the plugging thereof in accordance with
the rules and regulations of the NOGCC.61 The director of
the NOGCC testified that ranch Oil, as assignee, would be
responsible under NOGCC rules and regulations for plugging
the wells in question and performing any necessary surface
remediation. regulations provide that all pits shall be back-
filled within 1 year after completion of drilling operations and
that biodegradable mulch may be required if establishment
of vegetation is determined to be a problem by the director,62
that all soil containing over 1-percent petroleum hydrocarbons
must be remediated or disposed of,63 and that the NOGCC
shall have final authority to determine if the affected land has
been restored to its prior beneficial use.64
We need not determine whether the NOGCC’s jurisdiction
over these matters is exclusive to conclude that the district
court did not err in denying damages to the plaintiffs. “[U]nder
any theory of action the plaintiff will have the burden of
58 See, 38 am. Jur. 2d, supra note 6, § 302; annot., 62 a.L.r.4th 1153
(1988); annot., 50 a.L.r.3d 240 (1973). See, also, e.g., Exxon Corp. v.
Tyra, 127 S.W.3d 12 (Tex. app. 2003).
59 50 a.L.r.3d, supra note 58.
60 § 57-905.
61 267 Neb. admin. Code, ch. 3, § 029 (1994).
62 Id., §§ 012.14 and 012.15.
63 Id., § 022.03.
64 Id., § 022.10.
578 	282 NebraSka repOrTS

proving that the alleged damage was, in fact, caused by the
failure of the defendant to plug.”65 The allegation of damages
which might arise in the future is premature and fails to sus-
tain this burden.66 The plaintiffs did not present any evidence
that ranch Oil’s failure to plug has caused them direct harm.
Indeed, it appears to be ranch Oil’s intention to plug the wells
and restore the property to the NOGCC’s satisfaction once it
is finally determined that the ranch Oil-George/betty interest
in the Murphy-George/betty lease has expired and that it is
required to abandon the wells. The plaintiffs seem concerned
only that they might, in the future, be required to pay for plug-
ging the wells if ranch Oil fails to do so. Since those events
have not and possibly may not ever come to be, any claim
based thereon is premature.
(b) Lost Income
The district court likewise did not clearly err in conclud-
ing that the evidence of lost interest income was speculative.
hummon admitted that the oil itself was still there to be
extracted. hummon’s representative explained that any well
hummon would have operated on the land would have oper-
ated at a loss once expenses were considered. The plaintiffs
sought only the interest on the investment of gross production
from a well hummon would have allegedly drilled, based on
hypothetical production rates and on an assumed interest rate
that admittedly had no correspondence to any known interest
rate. The plaintiffs sought to demonstrate these lost “profits”
through the testimony of Sanders, the petroleum geologist who
worked for hummon.
[14,15] a plaintiff’s burden to prove the nature and amount
of its damages cannot be sustained by evidence which is
speculative and conjectural.67 a claim for lost profits must be
supported by some financial data which permit an estimate
of the actual loss to be made with reasonable certitude and
65 50 a.L.r.3d, supra note 58, § 2[b] at 252.
66 See Fulk v. McLellan, 243 Neb. 143, 498 N.W.2d 90 (1993).
67 Liberty Dev. Corp. v. Metropolitan Util. Dist., 276 Neb. 23, 751 N.W.2d
608 (2008).
bedOre v. raNCh OIL CO. 	579
Cite as 282 Neb. 553

exactness.68 We have explained that, in many instances, lost
profits from a new business are too speculative and conjec-
tural to permit recovery of damages.69 Such was the case here.
Without having drilled a well or even knowing the exact loca-
tion of the well hummon would have allegedly drilled if ranch
Oil had not been occupying the land, the production estimates
presented by Sanders were too tenuous. even if production
rates could be established, hummon failed to adequately dem-
onstrate how it would have invested the proceeds from the
sales and what interest rate would have been applicable to the
investments.
(c) Lease extension payment
hummon further argues on appeal that the district court
erred in granting ranch Oil’s pretrial motion to exclude lease
extension costs as an element of damages in their trespass
and conversion claim. hummon allegedly paid $5,260 for the
hummon-George/betty lease for another 5 years. according
to hummon, this payment should be recoverable as a neces-
sary expenditure to protect hummon’s rights as lessee, given
ranch Oil’s occupation of the land and the protracted nature
of the litigation. The district court concluded that hummon,
as lessee, did not have any right to recover damages under
§ 57-205.
For reasons different from those articulated by the district
court, we affirm its ruling.70 While a lessee is not listed as
a party who may sue under § 57-205, that statute does not
indicate that common-law remedies are no longer available to
lessees. and it is generally recognized that the lessee acquires
an interest in the land under an oil and gas lease and that the
lessee will be protected in the enjoyment of such interest.71
Nevertheless, we can find no support for hummon’s conten-
tion that a lessee may recover as damages the cost of his or her
68 Home Pride Foods v. Johnson, 262 Neb. 701, 634 N.W.2d 774 (2001).
69 See Nebraska Nutrients v. Shepherd, 261 Neb. 723, 626 N.W.2d 472
(2001).
70 See, e.g., Boettcher v. Balka, 252 Neb. 547, 567 N.W.2d 95 (1997).
71 2 kuntz, supra note 9, § 25.1.
580 	282 NebraSka repOrTS

election to renew a lease in order to make up for time lost on
the land due to a prior lessee’s occupation and protracted litiga-
tion over the validity of the occupation. hummon’s attempt to
introduce evidence of the amount that hummon negotiated with
George and betty for the 5-year hummon-George/betty lease
was, in essence, an attempt to circumvent its burden to show the
nature and amount of damages that are the probable, direct, and
proximate consequences of the first lessee’s occupation of the
land. as already discussed, the record indicates that if hummon
had been able to occupy the land, it would have lost money.
The cost of a lease extension is not reflective of hummon’s
actual loss directly resulting from ranch Oil’s alleged trespass
and conversion, and the district court did not err in granting
ranch Oil’s motion to exclude that evidence.
(d) attorney Fees
[16] The standard of review for an award of costs is whether
an abuse of discretion occurred.72 The district court did not
abuse its discretion in failing to award attorney fees and costs
to the plaintiffs. We have explained that “if an attorney seeks
a fee for his or her client, that attorney should introduce at
least an affidavit showing a list of the services rendered, the
time spent, and the charges made.”73 The plaintiffs here pre-
sented no evidence to the district court regarding attorney fees.
In Lomack v. Kohl-Watts,74 the Nebraska Court of appeals
affirmed the trial court’s denial of attorney fees when the party
seeking them had similarly failed to present any evidence upon
which the trial court could make a meaningful award of fees.
We likewise affirm the district court’s denial of attorney fees
in this case.
although the plaintiffs suggest they did not present evidence
of attorney fees because they believed they would have an
opportunity to provide proof of attorney fees at some later date,
72 See Malicky v. Heyen, supra note 5.
73 Boamah-Wiafe v. Rashleigh, 9 Neb. app. 503, 514, 614 N.W.2d 778, 787
(2000).
74 Lomack v. Kohl-Watts, 13 Neb. app. 14, 688 N.W.2d 365 (2004). See, also,
Hein v. M & N Feed Yards, Inc., 205 Neb. 691, 289 N.W.2d 756 (1980).
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Cite as 282 Neb. 553

the trial was for the plaintiffs’ remaining claims relating to tres-
pass and conversion and there was no reasonable basis for the
plaintiffs’ silent assumption. The plaintiffs did not request, nor
did the district court suggest, that the trial would be bifurcated
so as to consider attorney fees at a later time. Thus, the plain-
tiffs’ failure of proof is decisive of this issue.
(e) deposition Costs and Fees
Finally, the plaintiffs assert that the district court erred in
failing to order that ranch Oil pay for the costs and fees of
depositions called by ranch Oil. The plaintiffs had filed a
motion to compel payment of witness fees and expenses, to
which they attached an invoice reflecting those costs. The
district court never expressly ruled on the motion; it was
implicitly denied by the final judgment which failed to award
these costs.75
The plaintiffs’ motion sought payment of witness fees and
expenses under Neb. Ct. r. disc. § 6-326(b)(4)(C)(i) and under
Neb. rev. Stat. § 25-1228 (reissue 2008). Section 25-1228 is
inapplicable. It provides that
a witness may demand his traveling fees, and fee for
one day’s attendance, when the subpoena is served upon
him, and if the same be not paid the witness shall not be
obliged to obey the subpoena. The fact of such demand
and nonpayment shall be stated in the return.
The plaintiffs’ deposition witnesses appeared despite ranch
Oil’s failure to pay for traveling fees, and there is no provision
in § 25-1228 for a court to compel a postdeposition reimburse-
ment of fees.
[17] Section 6-326(b)(4)(C)(i) states that unless manifest
injustice would result, the court shall require that the party
seeking discovery pay the expert a reasonable fee for time spent
in responding to discovery. however, payment of discovery
fees under § 6-326 is limited to discovery obtained under sub-
divisions (b)(4)(a)(ii) and (b)(4)(b). Subdivision (b)(4)(a)(ii)
states: “Upon motion, the court may order further discovery by
other means, subject to such restrictions as to scope and such
75 See Olson v. Palagi, 266 Neb. 377, 665 N.W.2d 582 (2003).
582 	282 NebraSka repOrTS

provisions, pursuant to subdivisions (b)(4)(C) of this rule, con-
cerning fees and expenses as the court may deem appropriate.”
Subdivision (b)(4)(b) states:
a party may discover facts known or opinions held by an
expert who has been retained or specially employed by
another party in anticipation of litigation or preparation
for trial and who is not expected to be called as a witness
at trial, only as provided in [Neb. Ct. r. disc. § 6-3]35(b)
or upon a showing of exceptional circumstances under
which it is impracticable for the party seeking discov-
ery to obtain facts or opinions on the same subject by
other means.
a ruling under § 6-326(b)(4)(C)(i) is reviewed for an abuse of
discretion.76 The plaintiffs’ motion to compel payment of wit-
ness fees and expenses failed to establish that the depositions
were sought or obtained pursuant to either subdivision (b)(4)(C)
or subdivision (b)(4)(b). accordingly, the district court did not
abuse its discretion in denying the fees and expenses requested
by the motion.
VI. CONCLUSION
We affirm the district court’s determination, as a matter of
law, that ranch Oil’s activities on George and betty’s land did
not operate so as to extend the ranch Oil-George/betty interest
in the Murphy-George/betty lease. We also affirm the district
court’s determination that the plaintiffs had failed to prove they
were entitled to damages under common-law trespass and con-
version claims and that George and betty were entitled only to
the nominal amount of $100, as specified in § 57-205. Finally,
we affirm the denial of the plaintiffs’ motions for attorney fees
and expert witness fees and expenses.
A ffirmed.
76 See Future Motels, Inc. v. Custer Cty. Bd. of Equal., 252 Neb. 565, 563
N.W.2d 785 (1997).
bedOre v. raNCh OIL CO. 	583
Cite as 282 Neb. 553