Gilmer Oil Co. v. Corporation Commission

1936 OK 547, 61 P.2d 22, 177 Okla. 505, 1936 Okla. LEXIS 400
CourtSupreme Court of Oklahoma
DecidedSeptember 29, 1936
DocketNo. 26497.
StatusPublished
Cited by5 cases

This text of 1936 OK 547 (Gilmer 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
Gilmer Oil Co. v. Corporation Commission, 1936 OK 547, 61 P.2d 22, 177 Okla. 505, 1936 Okla. LEXIS 400 (Okla. 1936).

Opinions

OSBORN, V. C. J.

This is an appeal by the Gilmer Oil Company, hereinafter referred to as appellant, from an order of the Corporation Commission issued on May 16, 1935, which prohibited any operator in the Healdton oil field in Carter county from using vacuum for producing oil wells. The following parties are made defendants in error and will be referred to as appellees: Corporation Commission of Oklahoma, Re-ford Bond, A. S. J. Shaw, and J. C. Walton, in their individual capacities as members of said Corporation Commission, Joe O’Brien, secretary of Corporation Commission, AY. J. Armstrong, conservation officer of the state of Oklahoma, and all operators and producers of oil in the Healdton field, Carter comity, Okla.

On April 13, 1935, the commission gave notice that a hearing would be held on May 2, 1935, for the purpose of determining whether any or all operators producing from wells located in the Healdton oil field in Carter county should be permitted to produce such wells by means of vacuum pumps. Pursuant to said notice 15 operators were represented at said hearing. After the introduction of evidence the commission entered its findings of fact and order. AVe quote therefrom as follows:

“1. That ultimate recovery of oil will be greater in the Healdton oil field if the practice of pulling vacuum on producing wells is prohibited.
“2. That maximum ultimate recovery of oil, consistent with a minimum of injury to an oil-bearing sand, may be had by producing so-called stripper wells by repressuring method which contemplate the use of gas or water, than is possible by permitting producing wells to pull vacuum.
“3. That the overwhelming consensus of opinion among the lease operators of the Healdton oil field, favors a restriction which would prohibit any and all operators in the Healdton field from pulling vacuum on producing wells.
“4. That no operator of a lease or of an oil welL in the Healdton oil field of Carter county, Okla., should, from and after the effective date of this order, be permitted to pull vacuum on a producing well.
“Order.
“It is therefore the order of the Commission, premises considered, that from and after the effective date of this order, no operator of any oil lease or any oil well in the Healdton oil field of Carter county, Okla., should be permitted to pull vacuum on a producing oil well.
“It is further ordered that the commission retain jurisdiction of the subject-matter herein and of the parties hereto, for such further order or orders as the commission may deem necessary in the premises.”

At the outset we are - met with a challenge to the jurisdiction of the Corporation Commission on the ground that the wells owned and operated by appellant in the Healdton field produce less than 25 barrels of oil per day. Appellant contends that the commission is divested of jurisdiction over such wells by section 6, chapter 131, Session Laws 1933. Said chapter' is a comprehensive act relating to the conservation of oil and gas. Sections .2 and 3 of the act are as follows:

“Section 2. The term ‘waste,’ as used in this act, as applied to the production of oil, in addition to its ordinary meaning and in addition to the meaning given thereto by any other provisions of this act, shall include economic waste, underground waste, *506 including water encroachment in the oil and/or gas-bearing strata, surface waste, and waste incident to the production of oil in excess of transportation or marketing facilities, or reasonable market demands. The production of oil or gas in the state of Oklahoma in such manner and under such conditions as to constitute waste as in this act defined, is hereby prohibited and the commission shall have authority and is charged with the duty to make rules, regulations, and orders for the prevention of such waste, and for the protection of all fresh water strata and oil and/or gas-bearing strata encountered in any well drilled for oil or gas.
“Section 3. The term ‘waste’, as applied to gas contained in or produced from a common source of supply of oil, shall, in addition to its ordinary meaning, include the unreasonable production and/or the inefficient or wasteful utilization of gas in the operation of oil wells drilled therein, the escape, directly or indirectly, of gas from oil wells drilled therein into the open air in excess of the amount necessary in the efficient drilling, completion or operation thereof: the escape, blowing or releasing, directly or indirectly, into the open air of gas produced from wells productive of gas only, or of gas and gasoline only, drilled into any such common source of supply save only such as is necessary in the efficient drilling and completion thereof; and the unnecessary depletion or inefficient utilization of the gas energy contained in such common source of supply. In order to prevent the waste or to reduce the dissipation of the gas energy contained in any such common source of supply, the commission, in addition to its other powers in respect thereof, shall have authority to limit the production of gas from wells producing gas only or gas and gasoline only to a percentage of the daily open flow capacity of such wells that is less than the percentage of oil production allowed to oil wells drilled therein.”

The primary intent and purpose of the act as a whole is to provide for the conservation of oil and gas. By sections 2 and 3 of the act the commission is vested with broad powers, and is charged with the duty of making rules, regulations, and orders for the prevention of waste. These sections do not purport to deal with proration. Section 4 of the act and subsequent sections deal in the main with the subject of proration, which is a means provided for the prevention of waste whenever the full production of a common source of supply of oil can only be obtained under conditions constituting waste. Section 6 of the act in part provides:

“* * * And provided further that regardless of anything in this act to the contrary contained or authorized the commission shall not by rule, regulation, order or otherwise reduce the allowable production from any oil well in this state below twenty-five (25) barrels of oil per day or its full production if it is incapable of producing twenty-five (25) barrels per day.”

It is this proviso upon which appellant bases its contention that the commission is without jurisdiction over its wells. Giving due consideration to the various provisions of the act, and the obvious intent and purpose of the Legislature, we conclude there is no merit in the contention. We are not here concerned with proration. An examination of section 6 in its entirety discloses that it deals solely with proration. The term “allowable production” used in the above-quoted portion of the act undoubtedly refers to the production allowed by the commission where it has become necessary to prorate the wells producing from a common source of supply. To extend the meaning of the quoted language further would be to do substantial violence to the plain and obvious intention of the Legislature. It is clear that the rights of the parties involved in this ease are determinable in the main by the provisions of sections 2 and 3 of the act.

The second contention is stated in the brief as follows:

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Related

Kuykendall v. Corporation Commission
1981 OK 105 (Supreme Court of Oklahoma, 1981)
Simpson v. Stanolind Oil & Gas Co.
210 F.2d 640 (Tenth Circuit, 1954)
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1947 OK 128 (Supreme Court of Oklahoma, 1947)
Grison Oil Corp. v. Corporation Commission
1940 OK 79 (Supreme Court of Oklahoma, 1940)
Gilmer Oil Co. v. Corporation Commission
1938 OK 223 (Supreme Court of Oklahoma, 1938)

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Bluebook (online)
1936 OK 547, 61 P.2d 22, 177 Okla. 505, 1936 Okla. LEXIS 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gilmer-oil-co-v-corporation-commission-okla-1936.