Carter Oil Co. v. State

1951 OK 327, 238 P.2d 300, 238 P.2d 800, 205 Okla. 374, 1 Oil & Gas Rep. 87, 1951 Okla. LEXIS 677
Supreme Court of Oklahoma·Decided November 27, 1951·No. 33597, 33834·Published·Cited by 11 cases

Opinion

GIBSON, J.

The appeal in 33597 is from an order of the Corporation Commission which purports to change spacing and drilling units established by a former order. And that in 33834 is from an order of the Commission denying an application to vacate and set aside said modifying order.

Under date of November 6, 1947, on application of defendants in error, Frank Buttram and Fidelity Royalty Company and others, the Corporation Commission, after hearing, issued its order No. 20585 whereby there were . established 20-acre spacing and drilling units for the production of oil and gas from the Second Deese Sand formation underlying certain lands in township 2 north, range 1 west, Garvin county, Oklahoma. Embraced within the area thereof were the S.E.% of section 23 and the N.E.% of section 26. The order prescribed that no more than two wells be drilled on each quarter quarter section, one in the center of the northeast ten acres and one in center of the southwest ten acres. According to the order and plat therewith the E.% N.E.% N.E.1/^ of section 26 was established as *375 a spacing and drilling unit and the E.% S.E.Vé S.E. 14 of section 23 another unit.

Buttram and the Royalty Company held lease covering said unit in 23 and the north ten acres of said unit in 26, and plaintiff in error Carter Oil Company held lease covering the south ten acres of said unit in 26 and the land lying south and west of the unit.

At the time of filing their application, which sought the establishment of 20-acre spacing and drilling units, Buttram and the Royalty Company were engaged in the drilling of a well in the center of the north ten acres of the unit in section 26 and at the time of the hearing thereon said well was near completion as a producer from the Deese sand and it became the unit well under the spacing order. There was no appeal from said order and the same became final.

On December 4, 1947, Frank Buttram and Fidelity Royalty Company filed before the Commission an application wherein they asked that order No. 20585 be amended by pooling the north ten acres of said unit in section 26 with the south ten acres of the unit in section 23 and to make other suggested changes in the existing units which would become necessary by reason thereof. The ground alleged for the change is that the' well drilled in the northeast ten acres of 26 was at the sole expense of the applicants and same should be pooled with the ten acres in 23 immediately north thereof which is covered by the lease of the applicants. The application was heard on December 30, 1947, pursuant to notice, at which time Carter Oil Company entered its protest to the granting of the application. After hearing the evidence adduced the Commission took the matter under advisement, and thereafter, on January 12, 1948, rendered its order denying the application. On January 15, 1948, Frank Buttram and Fidelity Royalty Company filed before the Commission their “Objection to Order and Motion for Rehearing” wherein they asked that the order denying said application be vacated, and a new hearing granted, the ground alleged therefor being the order is contrary to the evidence and the denial of the application is inequitable and unfair because it imposes upon applicants undue hardships. No change of conditions arising subsequent to the hearing on the former order was alleged. The objection and motion was heard, on oral argument, on February 3, 1948. After taking the matter under advisement the Commission, on February 19, 1948, entered its order No. 20984, wherein said spacing units were rearranged. It is therefrom that Carter Oil Company appeals in cause 33597.

Thereafter, on March 11, 1948, Graham B. Johnson and others, plaintiffs in error in 33834, owners of the oib and gas mineral rights under the N.E.% (except N.E.V4 N.EGA N.E.14) of section 26, filed before said Commission an application to vacate said order No. 20984' which they allege to be void for divers reasons therein set out. The application was heard on April 16, 1948, pursuant to notice and taken under advisement until August 5, 1948, when same was denied. It is from the order denying the application to vacate that said Graham B. Johnson and others, plaintiffs in error, prosecute the appeal in cause 33834.

Both appeals present the same questions and therefore they were consolidated for the purpose of the briefing and the review.

Plaintiffs in error contend (1) that order No. 20585 was a final order and as a result thereof there accrued to them, as lessee and owners of the mineral interest in the south ten acres of said unit in section 26, by operation of the law, the right to share in the production to be had from said well drilled in the north ten acres of the unit, and (2) that the Commission acted without authority of law in promulgating its order No. 20984, and by reason of the deprivation of plaintiffs in error’s rights effected thereby same is violative of their constitutional rights. There is also urged that the procedure followed is insufficient to invoke the exercise of the *376 power of the Commission to change the spacing unit if such power existed.

Defendants in error recognize that order No. 20585 is a final order but contend that the Commission was authorized to enter order No. 20984 by virtue of Tit. 52 O. S. 1941 §112, which provides :

“Any person affected by any legislative or administrative order of the Commission shall have the right at any time to apply to the Commission to repeal, amend, modify, or supplement the same. Such application shall be in writing and shall be heard as expeditiously as possible after notice of the hearing thereon shall have been given in the manner provided by Section 14 of this Act. An appeal shall lie to the Supreme Court from any order made by the Commission in any such proceedings or from the refusal of the Commission to make any order petitioned for therein, in the same manner and within the same time in which other appeals are authorized to be taken by the provisions of this Act, and, on any such appeal, the Supreme Court may affirm the order of the Commission, or the Commission’s action in refusing to make the order petitioned for, or may itself make the order which the Commission should have made, or remanded the cause to the Commission with directions to make such order as the Supreme Court may determine should have been made.”

Plaintiffs in error’s counter contention is (1) that the power of the Commission to modify the original spacing by subsequent order is limited to that expressly defined in Tit. 52 O. S. Supp. 1949 §87.1, subdivision (c), which does not authorize a change such as that wrought by order No. 20984, and (2) that if the quoted section does authorize the Commission to so modify the original spacing, the facts in the instant case are insufficient to invoke the exercise thereof.

For the purpose of our decision we deem it unnecessary to determine the question whether the power of the Commission to modify spacing units previously established by a final order is limited to that defined in subsection (c) of Tit. 52 O. S. Supp. 1941 §87.1, or to determine whether such power obtains under sec. 112, quoted supra, because even if such power exists the facts of the instant case defeat the validity of the order entered.

The Corporation Commission was without authority to enter its order No. 20984.

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Carter Oil Co. v. State, 1951 OK 327, 238 P.2d 300, 238 P.2d 800, 205 Okla. 374, 1 Oil & Gas Rep. 87, 1951 Okla. LEXIS 677 (Okla. 1951).

1951 OK 327 (Carter Oil Co. v. State) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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