State Ex Rel. H. F. Wilcox Oil & Gas Co. v. Walker

1934 OK 399, 35 P.2d 289, 168 Okla. 543, 1934 Okla. LEXIS 40
CourtSupreme Court of Oklahoma
DecidedJuly 31, 1934
Docket25691
StatusPublished
Cited by13 cases

This text of 1934 OK 399 (State Ex Rel. H. F. Wilcox Oil & Gas Co. v. Walker) 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
State Ex Rel. H. F. Wilcox Oil & Gas Co. v. Walker, 1934 OK 399, 35 P.2d 289, 168 Okla. 543, 1934 Okla. LEXIS 40 (Okla. 1934).

Opinion

WELCH, J.

The plaintiff seeks by mandamus to compel the defendant, the Corporation Commission of the state, to grant plaintiff a trial and hearing on the application of plaintiff heretofore presented to the Commission for an adjustment of the determined capacity of certain oil wells to produce oil, or an adjustment of the potential production of oil from said wells.

The oil wells in question are in the Oklahoma City field, and are owned and operated by the plaintiff and produce oil from the supply or reservoir defined or designated as the Wilcox sand or Wilcox zone.

The Commission has authority to regulate (lie talcing of oil from the Wilcox zone by *544 reason of the operation of chapter 131, S-. L. 1933, and prior legislation covering the same subject-matter. It is the purpose of that act that the taking of oil from a common source of supply shall be restricted and ratably prorated whenever the unrestricted taking of oil therefrom cannot be permitted without waste. The Wilcox zone is one of such common sources of supply, and had been determined so to be, and for some years the Commission had therefore regulated the taking of oil therefrom, and had undertaken to provide for the ratable taking of oil therefrom by those producers taking and entitled to take oil therefrom.

It was necessary that the Commission determine the capacity of the various wells to produce oil, or their potential production, and then permit the various wells to produce such portion of their potential as would amount to a ratable taking by all. The Commission went forward with that policy,-and has so handled the matter under the cited act and prior legislation.

At a proper time in April, 1933, the Commission made tests and took or determined the potential of all oil wells in the Wilcox zone. Shortly prior thereto, and on April 5, 1933, the Commission had issued its order No. 2221 prohibiting the “shooting” of any of such wells. This “shooting” is referred to as the explosion of nitroglycerin or other high explosives in the well for the purpose of bettering- the condition of the well and immediately increasing the flow of oil. It had that effect at that time. The plaintiff had not recently shot its wells, but various other producjers in the zone had shot their wells shortly before the nonshooting order of the Commission. The result was that when the Commission took the potentials of the various wells in the Wilcox zone some of them were producing under the acceleration of a recent shooting, while the wells of the plaintiff were not. in such favorable 'conditioh. From that time forward the changing potentials of the wells in the zone were from time to time calculated and determined and fixed by the Commission.

It -is the position of the plaintiff that its several oil wells have been discriminated against, or (hat discrimination resulted from the fact that the potentials and allowable production of other oil wells in the zone were based upon and fixed from their accelerated production by reason of recent “shooting,” while the potentials and allowable production of the plaintiff’s wells wefe based upon and fixed from ordinary or level production not accelerated by any recent “shooting,” and that by the action of the Commission they were prevented from “shooting” their wells.

The foregoing facts were, in substance, alleged by plaintiff in an application presented to the Commission on the 15th day of June, 1934, in which application the plaintiff sought trial and hearing before the Commission and an adjustment of thq potentials and past allowable production from plaintiff's wells, such as would amount to an allowance to the plaintiff sufficient to constitute the taking of oil from its wells to be ratable and in proportion with the allowable takings during the same period of the other wells from the same zone.

One of the members of the Commission was of the opinion that the Commission had no authority whatever to consider plaintiff’s application and to hear the same or to grant plaintiff any relief. Another member of the Commission was in doubt about the matter, but joined in the conclusion of lack of authority, upon- his statement that he so acted in order that the matter might bei presented to this court before any action was taken by the Commission. The remaining member of the Commission was of the opinion that the Commission had ample authority to hear the matter and grant relief if the plaintiff should show itself clearly entitled to relief, and he so expressed himself in a dissenting opinion dissenting to the action of the majority of the Commission refusing to hear or consider plaintiff’s application.

It is asserted, in substance, by the plaintiff that it is the clear duty of the Commission to hear the application, and they assert their right to compel performance of such duty by mandamus.

It having been determined by the Corporation Commission that oil wells could not be permitted to produce oil at full capacity from the Wilcox zone without waste, it then became the duty of the Commission, in all cases as nearly as possible, to permit each well to ratably produce oil therefrom. With a great many oil wells producing- oil from such common supply it was undoubtedly difficult to establish the exactly equitable and ratable taking- by each producer. We are thoroughly satisfied that the Commission had proceeded with an earnest desire to accomplish the exact requirement of the law, but there is a continued duty upon (he Commission to so conduct the management and control of the production of oil under the act as to continuo the ratable taking by all *545 of the wells, as fairly as may be ascertained and permitted, with due regard to any condition or circumstances that might result m an unintended discrimination against any producer. And if any rule or action of the Commission, though well founded in purpose, should in operation result in discrimination against a producer, then upon application of such producer the Commission would have the authority to remove and correct, such discrimination. It is within the contemplation of the act, chapter 131, S. L, 1933, that overproduction might result and be observed in the case of certain wells, and that such overproduction should thereafter be equalized by reduced production. It was likewise within the contemplation of the act that certain wells might be shown to have been in-, equitably restricted or unratably restricted as to production. The resulting underpro-. duction or shortage of the production that should have been allowed might, be compensated or adjusted or equalized by future permitted overproduction to an equalizing extent. The application of the plaintiff to the Corporation Commission was based upon such an interpretation of the act, and by that application the plaintiff sought to have the Commission determine whether or not a discrimination had resulted against the plaintiff causing it to suffer an underproduction or improperly restricted production, and seeking to have the same equalized by adjusted potential with a resultant allowance of overproduction or production in addition to that previously allowed in order to grant plaintiff a ratable taking of oil from its wells which, with the wells of other producers, tap the common source of supply.

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Bluebook (online)
1934 OK 399, 35 P.2d 289, 168 Okla. 543, 1934 Okla. LEXIS 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-h-f-wilcox-oil-gas-co-v-walker-okla-1934.