IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT _____________________

No. 01-30293 _____________________

MILLER EXPLORATION COMPANY,

Plaintiff - Counter Defendant - Appellant-Cross-Appellee,

versus

ENERGY DRILLING CO.,

Defendant - Counter Claimant - Appellee-Cross-Appellant.

__________________________________________________________________

Appeal from the United States District Court for the Western District of Louisiana, Alexandria USDC No. 99-CV-802 _________________________________________________________________ January 16, 2002 Before JOLLY, SMITH and BENAVIDES, Circuit Judges.

PER CURIAM:*

We have thoroughly considered the arguments and briefs of each

of the parties and after some deliberation have concluded that the

district court did not err and that its judgment should be

affirmed. The district court determined that, under the oil-

drilling contract between Miller and Energy, Miller was liable for

drill pipe and a drill rig that were swallowed by a crater. The

crater resulted when underground pressure forced a large volume of

salt water up the drill hole and eroded the ground near the rig.

The district court also determined that, once Miller terminated the

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. contract, Miller was not required to make daily payments to Energy

while the rig was out of commission for repairs.

With respect to Miller’s contractual liability for the damage

to Energy’s rig, we agree with the district court’s conclusion that

Section 10 of the contract controls this case and is unambiguous.

Paragraph 10 of the contract provides:

[Miller] shall prepare a sound location adequate in size and capable of properly supporting the drilling rig, and shall be responsible for a conductor pipe program adequate to prevent soil and subsoil wash out. It is recognized that [Miller] has superior knowledge of the location and access routes to the location, and must advise [Energy] of any subsurface conditions, or obstructions (including, but not limited to, mines, caverns, sink holes, streams, pipelines, power lines, and telephone lines) which [Energy] might encounter while en route to the location or during operations hereunder. In the event subsurface conditions cause a cratering or shifting of the location surface, or if seabed conditions prove unsatisfactory to properly support the rig during marine operations hereunder, and loss or damage to the rig or its associated equipment results therefrom, [Miller] shall, without regard to other provisions of this Contract, including Paragraph 14.1 hereof, reimburse [Energy] to the extent not covered by [Energy's] insurance, for all such loss or damage including payment of force majeure rate during repair and/ or demobilization if applicable.

This provision clearly places the risk of damage to the rig

(in excess of Energy’s insurance policy limits) on Miller if the

damage is the result of “cratering” caused by subsurface

conditions. Although Paragraph 10 also refers to Miller’s duty to

“prepare a sound location” and to advise energy of any relevant “subsurface conditions or obstructions,” we agree with the district

court that these portions of the paragraph do not limit the

language imposing liability on Miller for damage to the rig from

cratering. Because the crater here was attributable to a

subsurface condition (namely, underground pressure), the district

court did not err in holding that Miller must reimburse Energy for

the uninsured cost of repairing its drill rig.

We also agree with the district court that the drill pipe lost

in the crater may properly be characterized as “in-hole” equipment

subject to Paragraph 14.2 of the contract. Paragraph 14.2 provides

that Miller “shall assume liability at all times for damage to or

destruction of [Energy’s] in-hole equipment, including, but not

limited to, drill pipe, drill collars, and tool joints. . . .”

Following the plain language of this provision, the district court

did not err in granting summary judgment in favor of Energy on its

damages claim for the value of the destroyed drill pipe.

Finally, we agree with the district court that, once Miller

exercised its right to terminate the contract under Paragraph 6.3,

Miller was no longer obligated to compensate Energy (at the force

majeure rate) while Energy repaired its drill rig. Accordingly,

the judgment of the district court is

AFFIRMED.