Sunray Oil Co. v. Cortez Oil Co.
| Decision Date | 04 March 1941 |
| Docket Number | 29636. |
| Citation | 112 P.2d 792,188 Okla. 690,1941 OK 77 |
| Parties | SUNRAY OIL CO. v. CORTEZ OIL CO. |
| Court | Oklahoma Supreme Court |
Rehearing Denied April 8, 1941.
Application for Leave to File Second Petition for Rehearing Denied May 6 1941.
Syllabus by the Court.
1. A grant conveying an interest in the oil and gas rights only in land, together with the right of ingress and egress and the right to use so much of the surface as may be necessary to explore for and produce oil or gas, conveys no title to the oil or gas which may penetrate the strata underlying the surface of the land.
2. Subject to the rules of law with reference to due care, the owners of land should not be prohibited from the full use and benefit of such land.
3. An injunction will not issue to protect a right not in esse and which may never arise, or to restrain an act which does not give rise to a cause of action.
4. A complainant is not entitled to an injunction when the alleged damage is merely nominal, theoretical or speculative. It is not sufficient ground for injunction that injury may possibly result from the acts sought to be prevented, but there must be a reasonable probability that the injury will be done if no injunction is granted, and not a mere fear or apprehension of same. Simons v. Fahnestock, 182 Okl. 460, 78 P.2d 388.
5. Record examined and held: Evidence insufficient to sustain the decree granting an injunction.
Appeal from District Court, Seminole County; Bob Howell, Judge.
Suit by the Cortez Oil Company against the Sunray Oil Company to enjoin the defendant from using an oil and gas well to dispose of salt water from other oil and gas wells. From a judgment in favor of the plaintiff, the defendant appeals.
Judgment reversed, with directions to dismiss.
Edward Howell, of Oklahoma City, R. J. Roberts, of Wewoka, Paul E Taliaferro, and Forney Hutchinson, both of Tulsa, and Busby Harrell & Trice, of Ada, for plaintiff in error.
Marvin T. Johnson, of Tulsa, for defendant in error.
This is an appeal from a judgment and decree of the District Court of Seminole County, enjoining Sunray Oil Co. from using a well for disposal of salt water drilled for oil and gas on a tract of land in which Cortez Oil Co. owned an undivided one-fourth mineral interest.
Prior to April, 1939, Burke-Greis Oil Company, and Rogers and Rogers, who held an oil and gas lease on the 80 acres, SE 1/4 of the N.W. 1/4 and the SW 1/4 of the NE 1/4 of Section 12, Township 6 North, Range 5 East, in Seminole County, had drilled on the leased area a test well for oil and gas. (Southwest 10 acres of the SW 1/4 of the NE 1/4 of said section.) The well was drilled through the formation known as the Cromwell sand, encountered at a depth of about 3,045 feet and through the Wilcox sand found at about 4,000 feet. No oil or gas was found, and the well was abandoned and was about to be plugged. The Cromwell sand there was 105 feet thick and saturated with salt water. Sunray Oil Co. obtained an assignment of the oil and gas lease covering the 10-acre tract upon which the well was located, also it obtained from Genevieve Greer, owner of the surface rights and 53/80 of the mineral interest, a license to use the well for the disposal of salt water produced from other wells in the vicinity.
Sunray Oil Co. "plugged" the well back to the bottom of the Cromwell sand, cemented casing from the surface to about the top of the Cromwell sand, cleaned the well out and tested it for oil and gas, and found none. The well was "swabbed" out and salt water rose in it 1,800 feet.
Sunray Oil Co. owned and was operating oil and gas wells some distance from this well which were producing salt water in considerable quantities and was disposing thereof by piping it into the well here involved, when Cortez Oil Co. commenced this action to enjoin the Sunray Oil Co. from so using said well.
Permanent injunction was granted and Sunray Oil Co. appeals.
On appeal Sunray Oil Co. contends error in overruling its demurrer to the evidence and in overruling defendant's motion for judgment in its favor at the close of all the evidence, and error in granting the injunction, for the reason that the evidence does not show that the acts enjoined were in violation of plaintiff's legal rights.
Right of Cortez Oil Co. herein is derived solely from its mineral grant.
A grantee in a mineral grant of the nature here involved does not acquire ownership of oil and gas in place. Oil and gas, unlike ore and coal, are fugacious and are not susceptible to ownership distinct from the soil. A grant of the nature of that of Cortez Oil Co. is not a grant of the oil and gas in the land, but of such part thereof only as the grantee may find and reduce to possession. It vests no title to any oil or gas which he does not extract and reduce to possession, and hence no title to any corporeal right or interest. Priddy v. Thompson, 8 Cir., 204 F. 955.
It is now generally held that oil and gas are not capable of distinct ownership in place. Rich v. Doneghey et al., 71 Okl. 204, 177 P. 86, 3 A.L.R. 352; Cuff v. Koslosky, 165 Okl. 135, 25 P.2d 290.
The right granted is that of ingress and egress, together with the right to use so much of the surface as may be necessary to explore for oil and gas, and if either be discovered, to reduce same to possession, whereupon such part of the oil as the grant may provide becomes the personal property of the grantee. This right, however, is subject to legislative control against waste. Rich v. Doneghey, supra. This right of the Cortez Oil Co. was not exclusive. The same right is shared by the owner of the land. All other rights to the land and the use thereof remain in the owner. The rights acquired by Cortez Oil Co. were not terminated. Sunray Oil Co. expressly agrees that Cortez has the same right to use the land for the same purpose as it, and even the same well, subject to payment of reasonable share of expense.
But Cortez Oil Co. asserts that there is a possibility that oil or gas may be found in some other sand under said 80-acre tract, and possibly in the same sand at locations other than the one in the particular 10 acres where the well in question is located, that the act of Sunray Oil Co. in placing salt water in the well might possibly result in the salt water escaping into other formations containing oil or gas and might force such oil or gas from said land, and might likewise force such oil or gas as might exist in the same sand at some other location from said land, and thus prevent Cortez Oil Co. from ever finding or producing oil or gas under its mineral grant.
The question is whether the judgment or decree granting the permanent injunction is clearly against the weight of the evidence.
There is no substantial conflict in the evidence as to what has been done in an effort to produce oil from the land in question and from land in the vicinity.
The oil field known as the North Grayson field, so far as oil or gas has been produced, lies south and east, principally south of the 80 acres in which plaintiff has its interest. Numerous expert witnesses, geologists, petroleum engineers and experienced producers of oil and gas, testified in the case. The expert witnesses all agree a "fault" extends along the northwest line of the producing area, running in a southwest to northeast direction from near the center of Section 14, slightly over a mile southwest from the well in question, northeast and crossing near the southeast corner of the 80-acre tract involved, and thence northeast for some distance. (A "fault" is defined by some of the witnesses as a break in the formation where one part of the strata has moved without respect to the other part of the formation.) In other words a formation of a given kind is found at one depth on one side of the "fault line", and at another depth on the other side. A number of wells had been drilled north and west of the so-called fault line. In some wells the Cromwell sand was encountered at various depths ranging around 3,100 feet. In those to the south and west it was found at a slightly higher level, and those drilled to the northeast on the northwest side of the fault line it was found at a slightly lower level. In other wells further northwest the Cromwell sand was not found.
The well involved herein was drilled a short distance north and west of the fault line. No oil or gas was found in any of the wells drilled north and west of the "fault line".
South and east of the fault line numerous wells have been drilled to what is known as the "Simpson Dolomite" formation, encountered there at about 3,800 feet. No Cromwell sand was found in any of the wells drilled south and east of the fault line.
It appears clearly, and all the expert witnesses agree, that there is no possibility of finding oil or gas in the Cromwell sand or any formation connected therewith on the 80-acre tract, unless it be found in what is known as a "trap". That is a place where the sand has...
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