Sun Oil Company v. Whitaker

483 S.W.2d 808, 42 Oil & Gas Rep. 256, 15 Tex. Sup. Ct. J. 394, 1972 Tex. LEXIS 192
CourtTexas Supreme Court
DecidedJune 28, 1972
DocketB-2300
StatusPublished
Cited by58 cases

This text of 483 S.W.2d 808 (Sun Oil Company v. Whitaker) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sun Oil Company v. Whitaker, 483 S.W.2d 808, 42 Oil & Gas Rep. 256, 15 Tex. Sup. Ct. J. 394, 1972 Tex. LEXIS 192 (Tex. 1972).

Opinions

DANIEL, Justice

(dissenting).

I respectfully dissent. I adhere to that portion of the majority opinion which restates the general rule that, unless otherwise provided by contractual provisions, an oil and gas lessee has an implied right or easement to make such use of underground water as may be reasonably necessary for ordinary and customary primary drilling and producing operations. However, I completely disagree with the majority’s extension of this “implied easement” doctrine so as to permit Sun also to take, consume and deplete an enormously greater quantity of water for a vastly different repressur-ing and secondary recovery process in the face of jury findings that the parties to the lease did not contemplate or mutually intend such use; that it would materially affect the supply which the surface owner could produce by wells for irrigation of the surface; that such use was not reasonably necessary; and that it will substantially reduce the value of the surface for agricultural purposes.

The majority fails to consider the vital distinction between the occupancy and use of the surface, including water, for ordinary drilling and production operations which do not substantially consume, diminish or destroy the surface estate and the relatively new, extraordinary and far more extensive taking of fresh water for injection into oil sands in a manner which substantially destroys and diminishes the surface estate. Water flooding is not an ordinary primary production method; it is an extraordinary and extraneous medium [813]*813usually employed after ordinary primary operations have terminated.1

Underground water is part of the surface estate, and unless severed by reservation or conveyance, it belongs to the owner of the surface.2 Whitaker, purchaser of the surface estate in 1948, had drilled wells to the Ogallala formation, a closed and isolated underground fresh water reservoir, encountered at a depth of approximately 200 feet, and this is his only source of water for domestic and irrigation purposes. Whitaker was using the water for agricultural irrigation for 5 years before Sun sought to use the same source of water for water flooding its oil sand.

Sun, which purchased an oil and gas lease from Whitaker’s grantor in 1946, completed eight producing oil wells on the Whitaker 267 acres in the San Andres sand. The record reflects no objection to Sun’s use of water for the ordinary and customary primary drilling and producing operations, which were conducted during the initial 18 years of operations under the lease at the surface well sites and through the well bores by open flow and later by pumping. In 1965, when the primary production from these wells declined because of pressure attrition, Sun sought to increase the underground pressure by water flooding the San Andres sand through two injection wells to be drilled on the Whitaker tract. This much of the program was approved by an order of the Railroad Commission, but the order did not undertake to state or approve the source of the water which was to be injected. Although water from other sources was admittedly available by purchase, Sun proceeded to drill a 200 foot well into the Ogallala fresh water sand on Whitaker’s land, from which it pumps water at the rate of not to exceed 100,000 gallons per day without the consent of or compensation to Whitaker. The fresh water is injected by pressure pumps through the two injection wells into the San Andres sand at an average depth of 4770 feet, where it mixes with the salt water and increases the reservoir pressure. According to Sun, the use of this “extraneous medium” will cause the wells on the Whitaker tract to yield an additional one million barrels of oil worth about $3,000,000. For this purpose, Sun proposes to consume a total of 4,200,000 barrels of Whitaker’s Ogallala water, which will shorten the life of Whitaker’s water supply by at least eight years. Whitaker owns only the surface estate and therefore receives no royalty from the oil production.

Sun contends that, regardless of the effect upon the surface estate, it has the implied and express right under its lease to take and consume this portion of the surface estate without any compensation to [814]*814the surface owner, and that it is entitled to an injunction restraining Whitaker from interfering with its taking of water from the Ogallala formation to increase its production by this secondary recovery process.

Contract Provisions

Sun correctly argues that, so long as no violation of law is involved, the parties to its lease were free to contract as they pleased; its lessor could have granted Sun the right to consume and deplete the entire Ogallala water sand and the entire surface estate of the Gann-Whitaker tract for secondary water flooding and repressuring if the lessor had so elected to contract or convey. On the other hand, any such right to destroy or substantially diminish and consume the surface estate should be clearly spelled out in the contract and not be implied from general provisions relating to substantially non-consuming and non-destructive occupancy and uses of the surface. In another context we said as much in Acker v. Guinn, 464 S.W.2d 348 (Tex.1971) as follows:

“The parties to a mineral lease or deed usually think of the mineral estate as including valuable substances that are removed from the ground by means of wells or mine shafts. This estate is dominant, of course, and its owner is entitled to make reasonable use of the surface for the production of his minerals. It is not ordinarily contemplated, however, that the utility of the surface for agricultural or grazing purposes will be destroyed or substantially impaired. Unless the contrary intention is affirmatively and fairly expressed, therefore, a grant or reservation of ‘minerals’ or ‘mineral rights’ should not be construed to include a substance that must be removed by methods that will, in effect, consume or deplete the surface estate. See Clark, Uranium Problems, 18 Tex. B.J. 505.” 464 S.W.2d at 352.

The fact that commercial production of limestone would destroy the surface for agricultural and grazing purposes was persuasive in this Court’s decision that a devise of “the mineral rights” would not be construed to include limestone, “although technically a mineral.” Heinatz v. Allen, 147 Tex. 512, 217 S.W.2d 994 (1949). See also Atwood v. Rodman, 355 S.W.2d 206 (Tex.Civ.App.1962, writ ref. n. r. e.) and other cases cited in Acker v. Guinn, supra. By analogy, unless the contrary intention is affirmatively and fairly expressed, a mineral lease should not be construed by implication to include the right to take and destroy enormous amounts of fresh water (over and above that customarily used in ordinary primary drilling and production operations) for secondary recovery processes that will, in effect, consume or substantially deplete the surface estate. No implication should be indulged that the lessor intended the dominant use and occupancy easement to include the right to destroy or substantially diminish the utility of the surface for agriculture purposes, all of which are dependent upon irrigation wells producing from the Ogallala sand.

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Cite This Page — Counsel Stack

Bluebook (online)
483 S.W.2d 808, 42 Oil & Gas Rep. 256, 15 Tex. Sup. Ct. J. 394, 1972 Tex. LEXIS 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-oil-company-v-whitaker-tex-1972.