Hester v. Sinclair Oil and Gas Company

1960 OK 103, 351 P.2d 751, 12 Oil & Gas Rep. 237, 1960 Okla. LEXIS 356
CourtSupreme Court of Oklahoma
DecidedApril 26, 1960
Docket38670, 38671
StatusPublished
Cited by2 cases

This text of 1960 OK 103 (Hester v. Sinclair Oil and Gas Company) 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
Hester v. Sinclair Oil and Gas Company, 1960 OK 103, 351 P.2d 751, 12 Oil & Gas Rep. 237, 1960 Okla. LEXIS 356 (Okla. 1960).

Opinion

BLACKBIRD, Justice.

The above styled and numbered appeals are so related that they have been considered, and will hereinafter be dealt with together, as if consolidated. They both involve a change in the 40-acre well spacing of part of what is presently known as the “East Criner-Payne Area”, of McClain County. The involved part lies northwest of what we shall refer to as the “East Criner Field.” The controversy as to whether this newly producing part of the area should remain under the 40-acre well spacing in effect in the East Criner Field *752 and the rest of the area, or whether or not the Corporation Commission should exclude it from such spacing, and order larger spacing units for it, was brought about by the drilling, or completion as a producer, of the Weimer-Fitz Start Unit well (hereinafter referred to merely as the “Start Unit” well) in Section 18, Township 6 North, Range 3 West. This well is more than a mile northwest of its nearest producer, the Gulf Baxter-Shartel Well, which is located in the East Criner Field. Both wells are producing from a structure, or one or more of a series of sands, known as the “Simpson Sand Series.” In the Start Unit well, however, this producing horizon was encountered at a depth of more than 10,000 feet, whereas, in the wells of the East Criner Field, it was found at depths ranging from 8,600 to 8,800 feet approximately; and it seems to be conceded (at least for the purpose of these appeals) that the Start Unit’s source of supply is different and separated from the East Criner Field’s source of supply, by a fault.

On the theory that the area overlying the oil reservoir, newly discovered in the Start Unit well, should be recognized as a new producing area that should have larger spacing units than those of the East Criner Field, Sinclair Oil and Gas Company, one of the oil and gas lessees of land around the Start Unit well, filed two applications in this State’s Corporation Commission, hereinafter referred to merely as the Commission. In one of these applications, docketed as instituting said Commission’s cause CD No. 11395, the Company prayed the Commission to enter an order amending its previous order No. 32752, establishing 40-acre spacing in the East Criner field and another certain numbered order extending that spacing pattern to the area surrounding the Start Unit well, in such a way as to delete the Simpson Sand Series from the present 40-acre spaced area in Section 18 (in which said well is located) as well as in Section 19 (adjoining Section 18 on the south) and the west half of Section 17 (adjoining the latter section on the east).

In another application docketed as instituting the Commission’s Cause CD 11414, the same Company sought a separate order that would establish 80-acre drilling and spacing units for the Simpson Sand Series, not only in the above described area it sought to have deleted from 40-acre spacing in Cause CD 11395, but also in all of the quarter sections adjoining the proposed deleted area on the north and west, in Sections 7, 8, 12, 13 and 24.

At the hearings the Commission held on the above described applications, same were opposed by various landowners and/or royalty owners. As hereinbefore indicated, the existence of a fault between the new well (Start Unit) and the older East Criner field was not seriously disputed. Its location, however, became the principal subject of inquiry and dispute at both hearings, and, defining, as it was apparently conceded to do, the boundary between the newly discovered reservoir, or source of supply, and the East Criner Field’s source of supply southeast of the new well, the fault’s location was recognized as the decisive factor in determining where the line of demarcation should be fixed between the area’s 40-acre spacing and the 80-acre spacing proposed by the applicant Company.

The witness upon whom the applicant relied to show the location of this fault was one of its own District Geologists, named Browning Hudson, who was qualified as an expert in geology. On his direct examination in both causes, Hudson identified a so-called geological “structure” map he had prepared of the area, on which the fault was depicted, as a line drawn from the northern boundary of Section 8, in a southwesterly direction through said section, and extending through the West Half of Section 17, the northwest corner of Section 20, the southeast corner of section 19, the East Half of Section 30, and the West Half of Section 31, and the southern and eastern segment of Section 1. On his cross-examination by the attorney for the protestants, this witness revealed that said geological facts represented on the map, which was introduced in one cause as Exhibit 7, *753 and in the other as Exhibit 8 (hereinafter collectively referred to as Exhibit 7-8) were obtained from, or based upon, logs of the wells in the area and “seismic data.” When called upon by protestants’ counsel to produce the data, the witness and his employer, the applicant company, refused to do so on the ground that it was confidential and was not obtained at the company’s expense to be given away by displaying, or revealing it, at a public hearing. Protestants’ counsel took the position that, as an essential part of due process, his clients were entitled either to have this information made available for testing its competency, veracity or credibility, as well as possible impeachment of the applicant’s evidence based thereon, or to have such evidence excluded or ignored, as based upon hearsay. In the discussion which followed the protestants’ objection, counsel for the Commission conceded that, under strict rules of evidence, the witness’ conclusions, and his map’s representations, as to the location of the fault line based upon the unrevealed seismic information of more or less anonymous origin, would not be competent evidence, and cited previous causes in which certain described methods of obviating such objections had been successfully employed to the satisfaction of both the Commission and the interested parties. Later, when protesting royalty owners introduced their evidence, they had none to offer as to the location of the fault line, but they did introduce evidence disputing that previously introduced by the Company, to show that only one well, rather than two, should be permitted on each 80 acres in the area proposed for 80 acre spacing.

At the close of the hearing, the Commission took the two causes under advisement and thereafter entered separate orders therein. Neither in the order of deletion entered in Cause CD 11395, supra (Order No. 39015) nor in its order establishing 80-acre units in Cause No. CD 11414, supra (Order No. 39016) was the area described in the orders as large, or the same, as that sought to be deleted and newly spaced, but it included less than ½ of such acreage lying west of the fault line, as depicted on the questioned map. The area deleted from 40-acre spacing, and placed under 80-acre spacing, was situated so as to be included within an imaginary line, forming a rectangle, drawn from the center of Section 7 straight south to the center of Section 19, thence straight west to the center of Section 24, thence straight north to the center of Section 12, and thence straight east to the point of beginning.

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Related

Cameron v. Corporation Commission
414 P.2d 266 (Supreme Court of Oklahoma, 1966)
Continental Oil Co. v. Oil Conservation Commission
373 P.2d 809 (New Mexico Supreme Court, 1962)

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Bluebook (online)
1960 OK 103, 351 P.2d 751, 12 Oil & Gas Rep. 237, 1960 Okla. LEXIS 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hester-v-sinclair-oil-and-gas-company-okla-1960.