REDLINE ENERGY, LLC v. RENETTA BENSON, WOODS COUNTY ASSESSOR; WOODS COUNTY BOARD OF TAX ROLL CORRECTIONS

Opinion

OSCN Found Document:REDLINE ENERGY, LLC v. RENETTA BENSON, WOODS COUNTY ASSESSOR; WOODS COUNTY BOARD OF TAX ROLL CORRECTIONS

REDLINE ENERGY, LLC v. RENETTA BENSON, WOODS COUNTY ASSESSOR; WOODS COUNTY BOARD OF TAX ROLL CORRECTIONS
2026 OK CIV APP 31
Case Number: 124003
Decided: 08/10/2026
Mandate Issued: 09/10/2026
THE COURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA DIVISION III

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Cite as: 2026 OK CIV APP 31, __ P.3d __

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REDLINE ENERGY, LLC, Plaintiff/Appellant
vs.
RENETTA BENSON, WOODS COUNTY ASSESSOR; WOODS COUNTY BOARD OF TAX ROLL CORRECTIONS, Defendant/Appellee

APPEAL FROM THE DISTRICT COURT OF
WOODS COUNTY, OKLAHOMA

HONORABLE MICKEY J. HADWIGER, DISTRICT COURT JUDGE

REVERSED

Wyatt D. Swinford, Brady R. Lippoldt, ELIAS, BOOKS, BROWN & NELSON, P.C., Oklahoma City, Oklahoma, For Plaintiff/Appellant,

Luke Adams, Stacy Hill, Patrick O'Hara, Jr., O'Hara & Adams, PLLC, Clinton, Oklahoma, For Defendant/Appellee.

OPINION BY TIMOTHY J. DOWNING, PRESIDING JUDGE:

¶1 Appellant, Redline Energy, LLC (Redline), appeals the trial court's Order denying Redline's Motion for Summary Judgment and granting Appellees, Renetta Benson, Woods County Assessor (Assessor), and Woods County Board of Tax Roll Corrections (Board) (collectively Appellees) Counter-Motion for Summary Judgment. The issue was whether Redline's pipe, known as a flowline, was subject to ad valorem taxation pursuant to 68 O.S.2021, § 2804

BACKGROUND

¶2 Redline is the operator of the Julian 2-1 well located in Woods County that is subject to a 640-acre spacing unit pursuant to an Order of the Oklahoma Corporation Commission. ONEOK Field Services Company, L.L.C. (ONEOK) purchases gas from Redline under a Gas Purchase Agreement.

¶3 According to Redline's owner, Adam Schilde (Schilde), the flowline was laid for the purpose of transporting the gas to the sale point. No other wells feed into the 3,100-foot flowline. According to Schilde, Redline cannot produce the Julian 2-1 well without using the flowline. As a result, the gas cannot be considered produced until marketed, and it cannot be marketed until it is carried to the ONEOK meter.

¶4 Schilde acknowledged that a very small amount of gas from the Julian 2-1 is used to operate the well prior to the gas entering the 3,100 foot flowline. Although the Julian 2-1 does not have a check meter on it, Schilde testified that it could, and he would, be able to measure the same things that are measured at the ONEOK sales meter. Both parties filed motions for summary judgment. After a hearing, the trial court denied Redline's Motion for Summary Judgment and granted Appellees Counter-Motion for Summary Judgment. Redline appeals.

STANDARD OF REVIEW

¶5 "Summary judgment resolves issues of law" and this Court reviews a trial court's grant of summary judgment de novo. Snow v. Town of Calumet, 2022 OK 63512 P.3d 369de novo standard, we subject the record to a new and independent examination without regard to the trial court's reasoning or result." Id. "A trial court should grant summary judgment where there is no dispute as to a material fact and the moving party is entitled to judgment as a matter of law." Eldridge v. Kavon, LLC, 2019 OK CIV APP 45446 P.3d 538Hadnot v. Shaw, 1992 OK 21826 P.2d 978unless specifically controverted by the statement of the adverse party which is supported by acceptable evidentiary material." R. for Dist. Cts. of Okla. 13(b), 12 O.S.2021, Ch.2, App. (emphasis added).

ANALYSIS

¶6 Redline raises three issues in its Petition in Error. All three issues center around Redline's use of the flowline and whether, based on the facts and the law, Redline's flowline is used in the production of gas. Specifically, Redline argues in its first issue that because the flowline contains the gas upstream from ONEOK's sales meter, the point where gross production tax is determined, the flowline is used for production and not solely transportation. Second, Redline generally asks if flowlines are categorically excluded from gross production tax in lieu of ad valorem tax where gas can theoretically be tested at the wellhead. Third, Redline asks if 68 O.S. § 1001

¶7 Pursuant to 68 O.S.2021, § 280468 O.S.2021, § 1001See 68 O.S.2021, § 2805

¶8 In its Motion for Summary Judgment, Redline argued that the flowline is necessary, and actually used in, the production of gas. Transportation of the gas through the flowline enables the gas to be measured and gross production tax determined at the ONEOK sales meter. Appellees countered that lines merely for transportation did not qualify for the in lieu tax. Appellees argue that the gas was produced at the wellhead, after it was processed through the separator and before it entered the flowline. Appellees rely on In re Home-Stake Production Co., 1969 OK 191463 P.2d 983Id. at ¶ 15.

¶9 In the present case, the flowline was within the 640-acre spacing unit and, according to Schilde was being used in the production of the gas. This Court finds this case distinguishable from In re Home-Stake. Unlike In re Home-Stake, Redline's flowline was used for the production of the gas within the 640-acre spacing unit and did not encroach or require Redline to acquire right of way for the purpose of transporting the gas to a sales meter outside of the spacing unit. Instead, the flowline went from the wellhead to ONEOK's sales meter where it was measured and sold. Therefore, this Court is not persuaded that In re Home-Stake is controlling as it relates to the facts of this case.

¶10 Instead, this Court agrees with Redline and finds that Shaffer Oil & Refining Co. v. County Treasurer of Creek County, 1935 OK 117252 P.2d 76Shaffer, the Court addressed pipes that performed two distinct functions. Shaffer, 1935 OK 1172Id. at ¶ 16. The facts in this case indicate that without the flowline no gas would be produced from the Julian 2-1 and sold to ONEOK. In other words, without a flowline, Redline could not get its gas from the wellhead to the ONEOK sales meter, the location where gross production tax is determined. Here, the single flowline runs directly from the wellhead to the sales meter and is contained within the 640-acre spacing unit. Under Shaffer this flowline is necessary, and actually used in, the production of gas.

¶11 Based on the applicable law and evidence presented below, 68 O.S. § 1001

CONCLUSION

¶12 After reviewing the record and the pertinent law, this Court finds that Appellant successfully demonstrated that Redline's flowline is property that is necessary, and actually used in, the production of gas from the Julian 2-1 well. Thus, 68 O.S.2021, § 100168 O.S.2021, § 2804

¶13 REVERSED.

PRINCE, V.C.J., and MITCHELL, J., concur.

FOOTNOTES

68 O.S.2021, § 1001.1