*1 and, safe- appropriate, whenever tice19 other avail- threatened
guard the in character.20 drastic means less
able respondent-judge is granted;
Writ application the seller’s
directed to entertain pen- discharging notice of lis
for an order only if sought the relief
dens and to afford
compelling equitable considerations present.
found to be V.C.J., HODGES,
DOOLIN, LAV- WILSON,
ENDER, and SUM- KAUGER JJ.,
MERS, concur.
HARGRAVE, J., in result. concurs C.J.,
SIMMS, and dis- concurs part.
sents in
SAMSON RESOURCES
COMPANY, Petitioner,
CORPORATION COMMISSION Oklahoma;
State of Honorable Chairman; Baker,
Hamp the Honora- Vice-Chairman; Eagleton,
ble Norma Townsend, B. the Honorable James
Commissioner, Respondents.
No. 60855.
Supreme Court of Oklahoma. 23,
April 25,
Rehearing July Denied properly Roberts, 10, developments ten post-decree were note 219 A.2d 19. McCahill affecting as facts consideration dered for our jurisdiction. City v. Cham Tulsa this court's blee, During proceeding judg- pendency Okl, denies was rendered for the seller which ment County Home Loan Au v. Cleveland Lawrence quest specific performance. buyer’s See Rule thority, [1981]. trial versy does render this contro- court’s decree Court, Supreme Ch. Rules lodged appeal buyer moot. 15, App. 1. pendens These lis notice. has renewed the
Counsel, City, respondent Oklahoma for Corp. Oklahoma Com’n.
LAVENDER, Justice:
again
This
Court
once
called
to
enquire
question
into the
the scope
respondent
Oklahoma
jurisdiction
sion’s
over matters related to
development
gas drilling op-
oil and
Petitioner,
erations.
Samson Resources
Company, contends that the Commission is
attempting
jurisdiction
to exercise
over an
area of
relationships.
Respondents Commission and
Oil
Company argue that the matter is within
jurisdiction
involves
the shibboleth
rights.”
This dispute came before the Commission
application
respondent
on the
seeking
changing
an
operator
order
640 acre
encom-
passing
all of
Township
Section
North,
West,
Range
Roger
Mills Coun-
ty,
Oklahoma. The
unit had been
by prior
created
Ten-
Commissionorder.
application alleged
neco’s
that well had
pursuant
been drilled on the unit
to
vol-
untary agreement
development
for
entered
owning
right
into
all of those
drill
alleged
in the unit.1 Tenneco also
petitioner,
the unit well
under the
voluntary
operated
agreement, had
the detriment
the other interest
application
requested
holders. The
designate
the Commission
Tenneco as
operator, displacing petitioner.
hearing
applica-
A
was set on Tenneco’s
petitioner present-
tion. Both Tenneco and
arguments
concerning
hearing
ed
at that
jurisdiction
mat-
the Commission’s
over the
Brown &
Lockhart
Gordon F. Brown
ques-
ter. The
examiner referred the
trial
Lockhart,
H.
City,
James
Oklahoma
for
Commissioners,
tion to the
who heard
petitioner.
Following
arguments
day.
on
same
Watson & McKenzie
Richard K.
hearing
issued
or-
this
an
Taylor,
Books and
L.
Sharon
Oklahoma
jurisdiction
finding
der
that it had
City,
respondents
for
Tenneco remanding
matter and
the cause
the trial
An-Son
day
hearing.
prior
On
examiner for
Hoover,
P.
Deputy
hearing, petitioner
present
Gretchen
filed the
Gen. Coun-
sel,
Pepper,
application
petition
and Leslie
writ in this
Wilson
Asst. Gen.
right
As
will be
at the
and was thus not
discussed infra.
drill
agreement,
agreement.
development
time
contracted out its
development
day
held in the
hearing
Court. One
prior
gas.5
to this Court’s issuance
duction
This Court went
proceedings
staying
below
order
on to state:6
application and
on the
pending the decision
say
This
is not
writ.
petition for
quantity
produce
designated
hy-
hearings
transcripts
in this
drocarbons from the well and the division
*3
and the ex-
thereof,
interest,
matter
before
and
own-
to this
provided
have been
hibits introduced
er-operator
proper
interests are not the
original appli-
petitioner’s
Court as
subject
private
of a
contract. The limita-
supplemental statement of facts.
cation and
being always omnipresent
tion
that
These
include the documents es-
exhibits
operating agree-
no
contract or
tablishing
relationship be-
a contractual
grant
ment
cause or
a license to
petitioner
and
respondent
tween
Tenneco
waste, or
commit
diminish correlative
the unit. Pe-
regarding
development
rights,
exclusively
control of which is
relationship is
this
titioner contends
power Corporation
Commission.
within
par-
dispute
between the
the basis of
tribunal
Commission
that, regardless of
ties. Tenneco contends
jurisdiction,
of limited
Burmah Oil &
relationship, petitioner’s actions affect
Company Corporation
Commis-
Gas
rights”
bring
thus
(Okla.1975)], supra,
P.2d 834
sion [541
jurisdiction.
matter
Commission
Company v.
Hall-
alleges
petitioner
has
Tenneco
(Okla.1964)], supra.
P.2d 510
Jones [396
from well
greater
interest in
Respective rights
obligations
operated
in a unitized section also
located
parties
to be determined
15.
by petitioner which
Section
offsets
court, Southern
Produc-
district
Union
that,
greater
inter-
And
result
this
Company Corporation
tion
est,
operated the
petitioner has not
Section
sion,
(Okla.1970). (Empha-
P.2d 454
so
obtain maximum
15 unit well
as to
(Footnotes omitted)
added)
sis
result,
that, as a
duction. Tenneco states
parties
In
we stated that the
Tenneco
section,
offsetting
pooling order could
forced
a Commission
same formation as the
produces
through
arrangement
con-
out that
flesh
possible
well,
has
Section 15
drained
parties’
tract. And that
this
production from
and that
Section
be a
obligations
the contract would
under
change
requested
opera-
necessitates
in the district
for determination
matter
tors.
courts,
questions
forum for
proper
pri-
dealing
respective
with
I.
parties.
vate
In the recent case of Tenneco Oil Co.
more
appears, even
present
case
Co.,2recognizing the
El Paso Natural Gas
question
clearly
to involve
than
jurisdic-
limited nature of the Commission’s
case
this
private rights. The
tion,3
the function to be
stated that
we
auspices of a
developed under
stat-
been
by the
under the
served
clearly sanc-
conservation,4 voluntary pooling agreement,
concerning oil and
utes
terms of
juris-
claim
tioned
respondents
now
obligations
87.1(e).
rights and
Commission,
Certain
diction for
implication
it
(Okla.1984).
conferred
2. of this state.
and statutes
the Constitution
See
3.
also Merritt
seq.
et
§§
52 O.S.1981
(Okla.1968),
we
4.
in which
stated
defined as a convenient method of “indi- jurisdiction for the exercise of cating that each in owner land a com- in over the mon supply gas source of has rights. drainage from prevent To offset- legal against privileges as other ting production owners allow gas land therein oil to take there- in a additional well locations unit. from by operations lawful conducted on To and the concomitant land, limited, however, his own occurring duties waste in unit which interest injure to other owners not to owners to come to re- source are not able terms garding development, duties not to voluntary take an the Com- (Okla.1964). Phillips 7. 396 P.2d 10.See Commission v. Petro- 1284, 1290, (Okla.1975). leum (W.D.Okla.1980). F.Supp. 8. 511 11). (footnote 9. 687 P.2d at 1053 empowered, upon proper applica- beyond jurisdiction is Commission.
mission Therefore, tion, pooled. attempted This juris- interests exercise of to order those development of the com- orderly an diction the Commission this case allows must supply. Aside from the prohibited. mon source recognized power to monitor certain terms II. imposed on of the contract conditions parties through a forced or- jurisdiction The lack of of this mat der,11 powers protect correla- no other ter on the how implied by this granted tive or ever, preclude does seek not statute.12 ing proper relief in the forum. We have previously oper held the status of unit requested by relief duty operate ator confers a the lease case, replacement of an safeguard as a and to correl holds
designated voluntary pooling ative various interest holde protect agreement in order to Therefore, just rs.14 as a mineral lessor rights,” clearly beyond the Commission’s right implied to enforce a lessee’s a dis jurisdiction, conferred it concerns develop prudent lease as covenant to pute private parties in which the between duty operator, which includes not public interest in correlative against drainage by opera lessee’s other argu involved.13 The basis Tenneco’s tions,15 holder a unitized truly dispropor ment concern the does right section has a to enforce the unit taking from a common tionate operations as operator’s duty to conduct attempted so supply, source of as it has *5 operator. prudent It argument. appears characterize its from this Court that the materials before However, type questions present- the by question being operated in both wells nature; relation- ed in an action of this the produced petitioner being are within the duties; ship parties; their their previously set the Commis allowables rights obligations; and the existence of discussed, previously setting sion. As duties, such liability for the breach of proper of allowables in this instance is province particularly within matters single Commission avenue to insure that no courts. As the district an takes undue share a suit entertain lacks supply. from common source in that damages,16 seeking of relief not efficacious. forum would be assertions,
Tenneco’s
reduced to
when
essence, allege
violating a
III.
duty
perceived
operate
the Section 15
ofWrit
assumed.
Original jurisdiction
good
unit in
manner so as to
faith
achieve
any further
issued
prohibition
all interest
maximum benefits for
holders
jur-
to exercise
such,
attempt
purely
private
the unit. As
re-
No. 105048
cause C.D.
apparent.
isdiction over
interest nature of the conflict is
named
application to be
clearly
Tenneco’s
garding
The
resolution of such
conflict
City
Amarex,
Baker,
Elmore
Gibson
11. See
Inc. v.
est is not
involved.
655 P.2d
(1966),
Telephone Co.
I working payout); provided interest after that, payout, on Tenneco would execute THE DISPUTE (and “joint operating agreement” designate dispute [peti- focuses on Samson’s operator) and would abide Samson operation of a within well drilled tioner’s] provisions replacement certain of the Commission-created [the operator. never executed Guenzel authority a volun- cf well] joint agreement. post-payout operating tary pooling agreement. [respon- agreements, Looking solely Sam- contended because of Samson’s to dent] greater less-produc- merely interest in this is financial son now contends that tive adjoining well], private dispute par- well on which Abraham which focuses [the well, higher Samson operating ty was should “frac” the Guenzel profit superior- obligation and to the detriment its the interest owners of the well, capacity draining public-interest prin- Guenzel thus does not fall under the According of injuring ciple rights. common source cor- of correlative owners, argument, in- rights working relative this if no interest is volved, royalty spac- any possible agree- owners and lessors violation “fracing” par- well. Both Samson The term is used in Abraham "frac” the oil-field corrupt charge lance. It verb "to is a form of the want to take of the Guenzel and Tenneco fracture". ascribes The scenario that unfolded fracing operation. of the Guenzel well to Samson’s power subject continuing district has been the within the ments would come Commission’s, court’s, power to legal community not in controversy decide. Statutory scrutiny court.3 enact- specific ments endow Commission with posited that Tenneco’s below
Samson
commission,
authority
in
and conservation
remedy before the
sole
drainage,
adjustment
gas.4
event of
seek
Involuntary pooling
within the common source of
of allowables
interests,
necessary
pre-
mineral
when
87.1(a).2 The
supply under
26 upon approval after due tional wells within a unit. This demon- adversary hearing.9 notice and On entry strates its authority protect owners order, drilling spacing of a all one within unit from action others with- royalty interests within the unit become in another unit.16 If there had been law, pooled working as a matter while forced in- the interests here pooled by voluntary interests are either volved, question no would have arisen toas Commission-imposed abyor or- presence of the Commission’s authori- der.10 Lessees and other owners ty.17 in a drilling unit share duction as time the is estab- Ill because, lished.11 so This is on commence- production, ment of there immediate is VOLUNTARY v. INVOLUNTARY POOL- producing unit well toward ING AGREEMENTS: THEIR EF- legally from areas where owners are FECT ON CORRELATIVE RIGHTS guard against unable to its occurrence. purpose involuntary pooling Samson argument rests its on the volun- protect compensate tary owners nature pooling agreement, production they may a unit for themselves maintaining that voluntariness not seek or achieve.12 agreement impressed the contracts awith “private” nature, distinguished from regulatory power “public” underlying statutory character waste language of “waste” and “correlative beyond the continues establishment rights”. argument This is a circular drilling unit under circum- begs question and further drilling stances that clouds may result problem wells,13 compulsory court/agency jur- additional dichotomous pooling,14 adjustment allowables.15 The isdiction this court is called may allow the of addi- increasing frequency.18 resolve with 17. Post-order activities are within Crest Crest Resources v. 14. 9. Ward v. 11. Petroleum Reserve 10. pra note Petroleum Co. v. Theus, note 5 at 1007. Okl., sion’s Okl., Comm’n., supra at 507. P.2d [1957]. 13 at 322. P.2d note 5 at Ward, Okl., Spaeth Spaeth Ward v. 602, 396 P.2d cognizance. supra Resources 217 and 321 [1979]. 605 [1981]. P.2d 204 5 at Corporation Corporation Comm’n., note Corporation Corporation Parker, v. Co. v. 216; 8; See Chancellor v. Corporation Shell Oil Co. v. supra Comm’n., Miller v. Comm’n., Comm’n., Comm’n., Crest Resources v. Dierksen, Okl., [1964]; note Comm’n., note 6. supra Comm'n., note 6 supra the 5; Stipe supra Keen, Dodds v. Okl., Comm’n., Sohio note 623 su- 18.This Natural Paso *8 Paso pra Barnes, Jurisdiction, Matter Jurisdiction of the tion Commission: Tenneco only sion and-gas Corp. v. §§ 111 both tion denies to all Court, Commission orders made 662 P.2d hibit P.2d Commission orders. Art. 9 § Gulfstream lips Recent trict court ascertaining 12 O.S.1981 1657. Art. 9 20 of our Constitu 355 P.2d 997 Petroleum Natural Gas Co. Orders: The Dichotomous Natural Gas our the district court 207; jurisprudence Interpretation of Gas conservation statutes controversy Sledge, 309, [1981] constitutional considered in Petroleum Co., Supreme see whether the order is See 113. supra 312-313 [1960]; Okl., Chancellor v. and also, supra to review Commission orders. Co., supra courts, except note Okl., clearly from Cabot Carbon Co. v. Phil [1983], McDaniel Corp. Layden, See, Court. from note also, Commission orders 3; P.2d 287 Tenneco Oil Co. El § pursuant Oklahoma Oil Co. v. El Paso 3; Hart, declaring rights statutory Chatfield, Woods note P.2d See 20, court limits dis distinguishable Court/Agency Oil Co. v. facially provisions of Moyer, be reviewed 52 O.S.1981 3; Okl. 675 [1955]. 394 [1981]. to the oil- Petroleum Interpret- Commis- see Corpora- Supreme Okl., law Subject Const.; v. also, void. Okl., pro 632 su El is to voluntary pooling preserve der 87.1 our nonparty As a to the § aggrieved by Injury limited natural resources. to the agreement, who became taking gas could common source and oil or operator, activities of surely proportions undue are matters contract. Tenne- that not enforce protective cogni- prompted its fall as much under the status at- co’s noncontractual present opera- prohi- as zance of the Commission does the tempt removal of to seek against drilling unnecessary bition wells. by tor order of the Commission. Whether protect Today’s decision undermine the will “cor- change is fact rights” concept and partially relative thus the mineral owners correlative of powers lawfully those us here. emasculate con- litigable is a issue not before legisla- yet by ferred the Commission has This is so because the Commission ture. investigation into the complete its is whether the Com- The core issue facts. flowing a Powers from the terms of com- authority, stemming from its mission has order, pulsory pooling indisputably with- drilling prior of a formation powers, ambit unit, disputes removal of adjudicate by my view, recognized are our law.20 In operator prevention any the interest of has the Commission same protection of correlative of waste and voluntary pooling arrangements as rights. firmly I believe Commission well, may replace power Tenneco in- adjudicative has the by oper- a dispute when there is occasioned voked. rights. injurious ations to correlative It credulity to reflect interest imposed duty properly strains To fulfill resort, might, as last forced to gas, owners oversee the conservation for the petition must exercise its Commission be allowed to give practical will additional wells to authority with teeth that they stop are a less statutory language and clear which unable effect to the opera- costly step change of legislative yanked and drastic intent. The “teeth” are —a from the when this tor. forcibly body strips court interferes and operators This held court flowing directly plain,
powers stat- manage the leaseholds as a duty to under a utory mandate. safeguard correlative unit and to A holders.21 mineral dispute clearly presents This a matter the various implied cove- lessee’s rights” lessor enforce a involving potential opera- develop prudent as spac- nant lease undisputed purpose waste.19 protect against tor, including duty setting of ing units and the allowables un- 19.Our supra duties to ing Corporation son. shield of the Commission’s protect to take oil and Here, "has interposition 87.1(e). Commission be legal note Tenneco does not seek to enforce Rather, jurisprudence owner in other privileges liability already established owners duties not to what Tenneco invokes public authority. Commission Orders—Should claimed common source not to ... states that each against Spectator limited, regulatory take an undue injure the owners in other be owed through prior or a however, 52 O.S.1981 owners ... source mineral Player?, supply Sam- any 21. Crest Resources and 20. See portion pra poration one Gas source of of mineral common source the supplied] underlying note spacing or Amarex, Comm’n., supra note supply is the oil and interests [1983] order note Co. geological drilling unit. Inc. state supply placing a land artificially possess Oil Co. gas ”. We footnote Exploration regulatory power, footnote 11. Baker, Okl., strata ...” have also said that in which [emphasis correlative v. El Paso created, through at 218. Comm’n., supra. area within the owners A common [emphasis supplied] Natural v. Cor- su- “a *9 drainage by operations.22 the lessee’s other tory powers activities acknowledges The court these facts and authorized, agency not if that the holder in states a unitized required, to monitor.23 right section has a to enforce the unit Because the Commission did improp- operator’s duty operations to conduct in a erly authority exercise its over this contro- prudent manner. But these statements versy, I would hold that this court should They cannot exist in a vacuum. must be original jurisdiction, assume dissolve the given practical application pow- within the temporary stay deny order and the writ. granted ers to the lest the rights develop sprawl into a of unanswered
questions in the minds of interest holders legal present their counsel. If the duplicated
circumstances were in a com- scenario,
pulsory pooling they would
doubtless be conceded as sufficient to call protection rights”.
for of “correlative order, voluntary pooling which serves the COMPANY, INC., PIC OIL Dale purpose unit, same spacing within the can- Thompson, Parker, Dennis not be said to transmute the character of Walter, Appellants. Charles controversy solely on the basis of its verbal costume. Robert W. GRISHAM and Sharon D.
IV Grisham, Appellees, SUMMARY OF No. 61539. JURISDICTIONAL ANALYSIS Supreme Court of Oklahoma. Tenneco was not a appointed op- April Samson as erator. Tenneco cannot sue ex contractu Rehearing July Denied in the district press court. Nor can it for Samson’s discharge responsibility its under some compulsory pooling order. There was none. The Tenneco in- relief Samson,
voked was to remove opera- tor, breach law-imposed duty for
protect the in a created the Commission’s order.
Tenneco’s claim damages was neither in nor performance
for misfeasance for Rather, some duty. it was breach public-law duty, Samson’s for qua operator within a Commission-cre- unit,
ated to act regard with due the correlative the interest
for short, holders. In Tenneco called regula- its 22. See prior pooling Dixon v. Anadarko Production which were established [1973], compelled spacing order. Tenneco is to seek court, although relief in the district that tribunal Today’s opinion deprives op- Tenneco of the is without to declare claimed in portunity to secure the Commission's decision 1657; order. 12 O.S.1981 § a Commission upon its claim that Samson has invaded Tenne- Sledge, WoodsPetroleum note 17. protected pooled royalties co’s interests in the