Mid-Continent Petroleum Corp. v. Blackwell Oil & Gas Co.

1932 OK 281, 15 P.2d 1028, 159 Okla. 35, 1932 Okla. LEXIS 553
CourtSupreme Court of Oklahoma
DecidedApril 12, 1932
Docket19321
StatusPublished
Cited by8 cases

This text of 1932 OK 281 (Mid-Continent Petroleum Corp. v. Blackwell Oil & Gas Co.) 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
Mid-Continent Petroleum Corp. v. Blackwell Oil & Gas Co., 1932 OK 281, 15 P.2d 1028, 159 Okla. 35, 1932 Okla. LEXIS 553 (Okla. 1932).

Opinions

ANDREWS, J.

The plaintiff in error, who hereinafter will be referred to either as the plaintiff or as the oil company, commenced this action against the defendant in error, who hereinafter will be referred to either as the defendant or as the gas company, for the purpose of obtaining a decree adjudging the oil company to be entitled to all of the drip gasoline theretofore and thereafter caught in a gasoline drip' installed in the operation of what is known as the Martin Well No. 2. The value of the product to April, 1926, was said to be $78,185.68.

Under date of August 4, 1916, the owners of certain real estate granted, demised, leased, and let the same to the Marland Oil Company for the sole and only purpose of mining and operating for oil and gas, and laying pipe lines, and building tanks, power-stations and structures thereon, to produce, save, and take care of said products for a term of five years and as long thereafter as oil or gas or either of them is produced from said land by the lessee. In consideration of the premises, the lessee covenanted and agreed:

“First. To deliver to the credit of lessor, free of cost, in the pipe line to which he may connect his wells, the equal one-eighth part of all oil produced and saved from the leased premises.
“Second. To pay the lessor $300 each year in advance, for the gas from each well where gas only is found, while the same is being used off the premises, and lessor to have gas free of cost from any such well for all stoves and all inside lights In the principal dwelling houses on said land during the same time by making liis own connections with the wells at his own risk and expense.
“Third. To pay lessor for gas produced from any oil well and used off the premises at the rate of $50 per year, for the time during which such gas shall be used, said payments to be made each three months in advance.”

It was therein provided that if no well be commenced on the land on or before the 4th day of August, 1917, the lease should terminate as to both p'arties, unless the lessee on or before that date should pay oi;, tender to the lessor, or to the lessor’s credit" in the bank therein named, or its,.xsuccessors, the sum of $80, which amount was intended to operate as a rental and covered the privilege of deferring the commencement of a well for twelve months from said date, and it was further provided therein that 'in like manner and upon like payments or tenders the commencement of a well might be further deferred for like periods of the same number of months successively. That oil and gas lease remained in force during all of the time hereinafter mentioned. All of the rights which the Marland Oil Company acquired by virtue of that oil and gas mining lease were assigned to the oil company, the plaintiff herein, under date of September 21, 1916i On the 29th day of November, 1920, the oil company and the gas company entered into a contract which, with the acknowledgment and signatures omitted, was in words and figures as follows, to wit:

“Contract.
“This Agreement, entered into this 29th day of November, 1920, by and between the Cosden Oil & Gas Company, hereinafter called the ‘Oil Company,’ and the Blackwell Oil & Gas Company, hereinafter called the ‘Gas Company.’
“Witnesseth: That, whereas, on the 4th day of August, 1910, Roy W. Martin, Ola E. Martin, and Nelson P. Martin executed to the Marland Oil Company one certain oil and gas mining lease covering the (Description of real estate pmitted) which lease 'is recorded in book 7, at page 207, of the records in the office of the county clerk of Grant county, Okla., and which lease was thereafter by said Marland Oil Company assigned to the Cosden Oil & Gas Company, herein styled the ‘Oil Company’;
“Now, therefore, for and in consideration of the money hereinafter stipulated to be paid and the ¡matters and things stipulated and) covenanted to bé done and performed by the gas company, the oil company hereby assigns and conveys unto the said gas company all of its gas rights (but no oil rights except as hereinafter provided) in, under and pertaining to the above-described leased property.
“In consideration of the foregoing assignment, thiei gas 'company agrees to immediately put material upon the ground for a well in the northwest corner of said tract offsetting the present producing well on adjoining property, and to commence drilling said well within four (4) weeks from this date. The gas company agrees to promptly offset each and every other gas well or wells which may be drilled at any time in the future on any tract adjoining the tract hereby assigned and ito fully and completely protect said tract from drainage of the gas therefrom by any such offset wells.
*37 “It is further agreed that if in drilling any well for gas the gas conxpany shall reach a sand showing oil, then, before drilling into such sand, the gas company shall immediately notify the oil company in writing- of such fact, 'in order that the oil company may have its representative on the ground while the sand is being drilled, and shall defer the drilling into such sand until the oil company’s representative is present; but in no event shall the gas company be required to delay such drilling in such case more than two days. In case such oil sand is encountered, the gas company may, after complying with the aforementioned requirements, drill through such sand if it desire to test deeper sand for gas, but shall in such case fully protect the sand so drilled through in full compliance with the laws of Oklahoma and the rules and regulations of the Corporation Commission of Oklahoma. If the gas company shall encounter oil sand as hereinbefore mentioned and shall not desire to drill through the same for a deeper test, then if it be not a flowing well, the gas company shall put said well to pumping; and if it shall produce twenty-five (25) barrels of oil or more per day for thirty (30) consecutive days, the oil company shall take over said oil well, paying said gas company the cost of said well. Whereupon all material in said well and the oil theretofore produced therefrom shall become the property of the oil company. If, however, during the aforementioned test, said well shall produce less than twenty-five (25) barrels per day, then the oil company may, at its option,' take over said well at cost as above provided; and in case it shall not exercise its option to do so within sixty (60) days after receiving written notice from the gas company that it lias such oil well, such well shall then become the property of the gas company, which latter company may proceed to produce and sell oil therefrom for its own account, operating said well and accounting for royalties upon the oil produced as provided in said lease; or, at its option, may abandon said well.
“It is further agreed that if 'in drilling any well for oil on the above-mentioned leased tract, the oil company shall encounter a sand producing gas, it shall immediately notify the gas company in writing of such fact, so that the gas company may have a representative present to test the volume of the gas, and said gas company shall have two days after such -notice within which to have its representative present before drilling through such sand.

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Bluebook (online)
1932 OK 281, 15 P.2d 1028, 159 Okla. 35, 1932 Okla. LEXIS 553, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mid-continent-petroleum-corp-v-blackwell-oil-gas-co-okla-1932.