In re Lovell-Crescent Field

1947 OK 65, 178 P.2d 876, 198 Okla. 284, 1947 Okla. LEXIS 456
CourtSupreme Court of Oklahoma
DecidedMarch 4, 1947
DocketNo. 32210
StatusPublished
Cited by9 cases

This text of 1947 OK 65 (In re Lovell-Crescent Field) 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
In re Lovell-Crescent Field, 1947 OK 65, 178 P.2d 876, 198 Okla. 284, 1947 Okla. LEXIS 456 (Okla. 1947).

Opinion

BAYLESS, J.

This is an appeal from an order of the Corporation Commission extending a well-spacing and drilling order to cover additional lands. The plain-tiffs in error, Sinclair Prairie Oil Company, Continental Oil Company, British-American Oil Producing Company, Sunray Oil Company, Gulf Oil Corporation, Deep Rock Oil Corporation, Magnolia Petroleum Company, Roy J. Turner, and F. E. Harper, were protestants below. Fox & Fox supported by Davon Oil Company, applied for the extension order. Parties will be referred to herein as applicants and protestants. In October, 1940, an oil well was completed in the Layton sand, approximately two miles northwest of the town of Crescent and five miles south of the town of Lovell. Upon application of the lessee, 40-acre well spacing was ordered established by the Corporation Commission. Apparently this well was thought to be near the south end of the field. It is located near the southern boundary of the area, approximately two miles east and west by five miles north and south, covered by - the spacing order. In July, 1943, the commission, by order, extended the well spacing three miles further to the south, annexing six additional sections, including part of the town of Crescent. In May, 1944, upon application of the conservation officer, the commission, by order, extended the well-spacing area to include all of the town of Crescent and 160 acres immediately to the south. No appeal was taken from any of the foregoing orders. The commission, after a lengthy hearing on the application of Fox & Fox, entered an order in March, 1945, extending the boundary of the area covered by the previous spacing orders one and one-half miles further to the east [285]*285and two miles further to the south. Protestants have appealed from this order.

Protestants contend, the original well-spacing order and the two extensions prior to the one complained of are void on their face for the reason that the commission attempted to regulate seven separate common sources of supply in one order, and the effect of the original order and the extensions was to limit production to one well per 40 acres for all of the seven common sources of supply, which would permit production from one common source of supply only and prohibit production frpm the other six common sources of supply in violation of the well-spacing law, chapter 59, Session Laws of Oklahoma, 1935, page 232 et seq., sections 1 to 6, inclusive (52 O.S. 1941 §§85-87, 136-7-8). The statute clearly would not permit this to be done. Applicants say the original order and the extension orders merely specified seven different common sources of supply in one cause and that the seven spacing orders entered therein were several and not not joint; likewise, that the spacing order would permit the production of one well from each common source of supply per 40-acre tract. The application for the original spacing order states:

“. . . It appears . . . that said area is underlaid by more than one common accumulation of oil and gas; that these common accumulations of oil and gas are separated from each other by strata and are not connected with each other in any manner, and that there are therefore many different common sources of supply in said area.
“Your applicant further requests the Honorable Commission to enter an order for well spacing applicable severally to the several separate common sources of supply.”

The original well-spacing order reads:

“That prior to the completion of said Danciger-Richards No. 1 well, numerous Wells producing oil and gas were drilled in the Lovell Pool and are now producing from the Tonkawa Sand, Hoover Sand, Elgin sand, Simpson Dolomite, Lovell sand, Middle Layton, and Lower Layton sand common sources of supply; That said common sources of supply are separate and distinct from each other and from other common sources of supply in the area;'. . .
. . well spacing and/or drilling units forty acres in size and in the form of a square, should be established for the development of the Tonkawa sand, Hoover sand, Elgin sand, Simpson Dolomite, Lovell, Middle Layton, and Lower Layton sands, . . .
“That no well shall be allowed to be produced from more than one common source of supply at the same time.” (Emphasis ours.)

We have considered all of the orders referred to above and construe them to provide a separate spacing and drilling unit for each of the seven common' sources of supply. It would have been better practice for the commission to have entered a separate order for each common source of supply, or at least to have spaced each separate source of supply by separate paragraph in the one order, but failure so to do is not fatal to the validity of the order since the separate sources of supply were not treated as one common source of supply for the purpose of spacing and drilling.

Protestants contend that since the original order and the extensions are void, the application for the extension appealed from was, in effect, an original application, and being such, the order appealed from is void because 80 per cent of the lessees did not consent to this extension and for the further reason that this extension will cause, rather than prevent, the commission of waste. The protestants offered evidence at the trial tending to establish that the effect of extending the well-spacing order would result in economic waste in the area covered by the extension. In view of our holding that the original order and the extensions are valid, the questions of waste and lack of consent of lessees is eliminated for the reason that the sole question before the com-' mission, under section 3(d) of the Act of 1935 (52 O.S. 1941 §87 (d)) was, [286]*286whether, under the application and proof, the “oil development, or trend of such development” indicated that the previous well-spacing order should be extended to include the additional area involved in the application.

The difference between the procedure and proof necessary to obtain an original spacing and drilling order and that which is necessary to extend the boundary of an established well-spacing area, is apparent from the following statutory provisions:

Section 3(d) of the Act of 1935 (sec. 87 (d) ):

“The commission under proper application and proof, and in conformity with the procedural requirements of said Chapter 131, of the Session Laws of 1933, shall have the power to enlarge and extend the boundaries of a common source of supply when oil development, or the trend of such development, shall indicate that an additional area should be included therein and, thereupon, the commission, by proper order, shall require the same spacing and drilling units to the additional portion of the common source of supply.”

Section 1 of the act (sec. 85) provides that the term “waste”, as applied to the production of oil, in addition to its ordinary meaning, shall include economic waste; and that production of oil or gas in such manner as to constitute waste is prohibited.

Section 3(a), sec. 87(a), gives the commission power to establish well-spacing and drilling units of uniform and specified size and shape for any common source of supply in order to prevent waste. This section further provides :

“. . .

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Related

Western Oklahoma Royalty Owners Ass'n v. Corporation Commission
1979 OK CIV APP 30 (Court of Civil Appeals of Oklahoma, 1979)
Jones v. Continental Oil Company
420 P.2d 905 (Supreme Court of Oklahoma, 1966)
Application of Bennett
1960 OK 100 (Supreme Court of Oklahoma, 1960)
Wakefield v. State
1957 OK 10 (Supreme Court of Oklahoma, 1957)
Superior Oil Co. v. Oklahoma Corporation Commission
1952 OK 123 (Supreme Court of Oklahoma, 1952)
Cities Service Oil Co. v. Anglin
1951 OK 34 (Supreme Court of Oklahoma, 1951)
Application of British-American Oil Producing Co.
1950 OK 5 (Supreme Court of Oklahoma, 1950)
In Re Application of Continental Oil Co.
1947 OK 64 (Supreme Court of Oklahoma, 1947)

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Bluebook (online)
1947 OK 65, 178 P.2d 876, 198 Okla. 284, 1947 Okla. LEXIS 456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-lovell-crescent-field-okla-1947.