After negotiations over the past several months have been unsuccessful the Levelland EDC has filed a lawsuit against Chi Operating Inc. Including Chi Energy Inc and Chi Partners Management LLC. The suit also includes a petition and application for temporary injunction and permanent injunction. The suit is over the unauthorized use of water from the Levelland Industrial Rail Park for waterflood operation by Chi Energy, for the benefit of their interests in the oil, gas and other minerals in and under the Levelland Industrial Rail Park and other land in Hockley county.
The portion of the the rail park at issue is described as 272.281 acres described as a portion of Labor 6 and Labor 7. The petition filed shows that in August of 2012 the Levelland EDC received the first indication from a contract pumper for Chi Operating that they were running water through lines from the LEDC water well on Labor 7, a well which was in existence prior to this date and was not drilled and completed by Chi Energy.
The lawsuit further states that on November 8, 2012 Chi Energy Inc. recorded a Surface and Water Use Agreement dated March 7, 2008 in Hockley County records conveying water rights from Farmers Co-Op to Chi Energy covering 124.25 acre tract of land in Labor 6. A detailed search of the official records of Hockley county prior to the Levelland Economic Development Corporation’s purchase of the land in April 2009 did not indicate the existence of the Water Use Agreement and did not reveal any interest transfer from the Levelland Compress Co to Farmers Co-Op It was also stated that between late August and early October 2012 the Levelland EDC Director was notified by a nearby landowner that Chi Energy had sucessfully drilled and begun operating a water well on Labor 6 in the Rail Park. On October 19, 2012 the Levelland EDC inspected and learned that Chi energy was operating a water well on Labor 6 in the rail park, the LEDC officially notified Chi energy of the wrongful use of the water–Chi Energy has continued to use the water to date.
Levelland EDC is asking that a Temporary Injunction be put in place to immediately stop Chi Energy/Chi Operating from the continued water usage even while this case proceeds through the judicial system.
All questions have been referred to LEDC Attorney Dustin Brooks who has declined comment at this time.