Creslenn Oil Co. v. Corporation Commission

1952 OK 195, 244 P.2d 314, 206 Okla. 428, 1 Oil & Gas Rep. 813, 1952 Okla. LEXIS 613
CourtSupreme Court of Oklahoma
DecidedMay 6, 1952
Docket34938
StatusPublished
Cited by7 cases

This text of 1952 OK 195 (Creslenn Oil Co. v. Corporation Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Creslenn Oil Co. v. Corporation Commission, 1952 OK 195, 244 P.2d 314, 206 Okla. 428, 1 Oil & Gas Rep. 813, 1952 Okla. LEXIS 613 (Okla. 1952).

Opinion

O’NEAL, J.

This is an appeal from an order of the Corporation Commission of the State of Oklahoma challenging the validity of Order No. 24052 entered on the 5th day of October, 1950. Prior to the entry of this order and under date of December 18, 1947, the Corporation Commission of Oklahoma issued its Order No. 20733 establishing 40-acre drilling and spacing units for production of oil and gas from the Deese Sand common source of supply underlying sections 3, 4, 9 & 10, township 4 north, range 3 west, Garvin county, Oklahoma, which provided that no more than one well be drilled on each 40-acre tract, approximately in the center thereof, but that if there should be existing surface obstructions that would interfere with such location, then without special permit by the commission the well might be located so as to avoid such surface obstructions, but, in no event, further than 150 feet from the center of each spacing unit.

On May 9, 1950, the Creslenn Oil Company and Elm Oil Company filed with the Corporation Commission their application for an order permitting them to drill a well at a point 295 feet east of the center of the southeast quarter of the southwest quarter of said section 9, alleging for grounds therefor that the well, if located in the center of said spacing unit, would have to be drilled in the former channel of the Washita river. A hearing was had on the application on the 31st day of May, 1950, and the commission entered its order in said cause which permitted and authorized the Creslenn and Elm oil companies to drill a well at a point approximately 295 feet east of the center of the southeast quarter of the southwest quarter of said section 9.

On June 2, 1950, J. M. Brown, the owner of the 40-acre tract lying directly east of the Creslenn and Elm oil companies’ 40-acre tract, filed his application with the commission to reopen the application of the Creslenn and Elm oil companies and prayed that the order be vacated on the ground that J. M. Brown did not receive notice of the application for hearing before the commission; and that, in any event, the applicants would gain a geological or structural advantage if permitted to change their drilling location; and that such change, if permitted, would cause an unfair drainage in favor of the Creslenn and Elm Oil Companies and against J. M. Brown.

The commission entered an order vacating its order of May 31, 1950, and reset the cause for hearing on the 30th day of June, 1950. Upon the rehearing, evidence was introduced before a trial examiner, and, thereafter, on October 5, 1950, the commission entered its order authorizing the Cres-lenn and Elm oil companies to drill, complete and produce their well at a location 288 feet east and 102 feet north of the center of the southeast quarter of the southwest quarter of said section 9. An additional order was entered to the effect that if the Cres-lenn and Elm well became a producer that the production from the well should *430 be 90 per cent of the allowable for wells in the pool in which this well is located, or 90 per cent of the capacity of the well to produce, whichever is the lesser.

The Creslenn and Elm oil companies appeal from the order and assert that the Corporation Commission has no authority to set aside or modify a final order and to enter a new order affecting the correlative rights of litigants before the commission in the absence of a showing of fraud or change of condition.

J. M. Brown, the owner of the royalty rights under the southwest quarter of the southeast quarter, the adjoining 40-acre tract, asserts that the Corporation Commission had the power, authority and right to enter its Order No. 24052 and that said order is sustained by substantial evidence and is not arbitrary or unreasonable.

The Creslenn and Elm oil companies, in support of their assignment of error, call our attention to our recent decisions in Carter Oil Co. et al. v. State, 205 Okla. 374, 238 P. 2d 300, and Wood Oil Co. v. Corporation Commission, 205 Okla. 534, 239 P. 2d 1021. These cases do not support their contention. In the Carter case, the opinion discloses that the Corporation Commission had, pursuant to 52 O. S. 1951 §87.1, established well-spacing and drilling units. Thereafter the owner of a mineral interest on land within the unit filed an application with the commission pursuant to 52 O. S. 1951 §112, to repeal, amend, modify or supplement the previous order issued by the commission. We held that under section 112 the commission did not have the authority to modify or supplement its original order (§87.1) in the absence of a statutory notice of hearing thereon and in the absence of a substantial change in condition. We held that it would be an unreasonable application of the police power to permit the Corporation Commission to modify or supplement a previous final order without notice to all interested parties.

In the Wood case, we held that the Corporation Commission was without authority to entertain or grant an application to vacate, amend or modify a spacing and well drilling unit established by a former order of the commission, and which order had become final and not appealed from. Specifically, we held that the commission’s orders made in pursuance of the authority granted by statute are not subject to a collateral attack.

As we have seen, the original drilling and spacing unit order specified that one well be drilled on each 40-acre tract in the center thereof, but, if there were surface obstructions that would interfere with such location, then without special permit by the commission such well might be located so as to avoid such surface obstructions, but not further than 150 feet from the center of the tract.

This order clearly shows that an operator can, to avoid natural surface obstructions and without leave of the commission, establish his drilling site 150 feet in any direction from the center of the 40-acre tract. It also clearly demonstrates that the commission, in a proper case, could assume jurisdiction and grant a permit to establish a well beyond the 150-foot tolerance.

It is urged that the commission was without authority to vacate its Order No. 20733, which it had entered on May 31, 1950, for the reason that the motion to vacate the same was a collateral attack upon a final order of the commission prohibited under 52 O. S. 1951 §111. We hold that this is not a collateral attack, but is a direct attack upon an order that had not become final and that it was within the discretion of the commission to vacate the same upon a showing that Brown did not have notice of the filing of the application or the order made thereunder.

It is significant to note that the owner of the working interest (The *431 Texas Company) operating the oil and gas lease upon the J. M. Brown 40-acre tract did not join Brown in opposing the application of the Creslenn and Elm oil companies to establish a well drilling site.

The evidence is without substantial dispute that the well on the Creslenn and Elm companies’ tract, if drilled in the center thereof, would fall practically in the bed of the Washita river. The commission found:

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Cite This Page — Counsel Stack

Bluebook (online)
1952 OK 195, 244 P.2d 314, 206 Okla. 428, 1 Oil & Gas Rep. 813, 1952 Okla. LEXIS 613, Counsel Stack Legal Research, https://law.counselstack.com/opinion/creslenn-oil-co-v-corporation-commission-okla-1952.