Moncrief v. Pasotex Petroleum Company
| Decision Date | 30 August 1960 |
| Docket Number | No. 6239.,6239. |
| Citation | 280 F.2d 235 |
| Parties | W. A. MONCRIEF, Jr. and Joe J. Klabzuba, Appellants, v. PASOTEX PETROLEUM COMPANY, a Delaware corporation, Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Dee J. Kelly, Fort Worth, Tex., and T. Murray Robinson, of Robinson, Shipp, Robertson & Barnes, Oklahoma City, Okl., for appellants.
George N. Otey, Ardmore, Okl. (R. Rhys Evans, Ardmore, Okl., and C. W. Proctor, Houston, Tex., T. N. Jordan, Jr., Denver, Colo., and Otey, Johnson & Evans, Ardmore, Okl., of counsel, on the brief), for appellee.
Before BRATTON, PICKETT and LEWIS, Circuit Judges.
The dispositive question presented by this appeal is whether or not, under undisputed facts, the lessee of an oil and gas lease on restricted Oklahoma Indian lands has complied with the lease requirements so as to extend the lease beyond its primary term. Appellee-defendant is the lessee under the subject lease one approved by the Department of Interior for Rosa Drake McCann, an enrolled full-blooded Choctaw Indian. Appellants-plaintiffs assert claim to the lands through a subsequent lease executed by the daughter and heir of the original allottee.1
The departmental lease, dated May 13, 1948, and approved by the Secretary of the Interior on June 10, 1948, is "for a term of 10 years from and after the approval hereof by the Secretary of the Interior and as much longer thereafter as oil and/or gas is produced in paying quantities from said land." By other provisions in the lease, the lessee is required to pay periodically a cash rental; is required to drill and produce all wells necessary to offset or protect the leased land from drainage, or in lieu thereof to compensate the lessor in full for the estimated loss of royalty through drainage; is required at its election to drill and produce other wells, or in the event of its election not to drill and produce such other wells, to pay in lieu thereof a sum to be fixed by the Secretary of the Interior not to exceed $1.00 per acre per annum; is required to pay a royalty of 12½ per cent of the oil or gas, or both, produced and saved from the premises; is required to abide by and conform to any and all regulations of the Secretary of the Interior relative to such lease; and is required to comply with restrictions imposed by the Secretary as to the time or times for the drilling of wells and as to the production from any well or wells drilled when in his judgment such action may be necessary or proper.
By order dated March 6, 1958, the Oklahoma Corporation Commission designated the leased lands as part of a drilling unit consisting of a total of 320 acres and this order received the requisite approval of the Secretary of the Interior upon March 31, 1958. The drilling unit included a tract upon which appellee had begun drilling in 1957 and upon which production in paying quantities was discovered on June 4, 1958. Development was continued with due diligence and the well was completed as a commercial producer at a date not later than June 21, 1958.2
Each of appellants' contentions urging reversal spring as corollaries from their basic premise that the departmental lease required the completion of a commercial well during the primary term and that commencement of such a development during the primary term did not serve to extend the lessees' rights. To explore the soundness of the premise, the drilling and production requirements of the lease must be examined in view of Oklahoma law as it has been pronounced. And Oklahoma has consistently favored such interpretation of lease rights as will favor development and permit completion of a well rightfully commenced. Simons v. McDaniel, 154 Okl. 168, 7 P.2d 419, 421.
The departmental lease contains no specific provision requiring completion of a commercial well during the primary term and voiding the lease absent such completion. Cf. State ex rel. Commissioners of Land Office v. Carter Oil Company of West Virginia, Okl.1959, 336 P. 2d 1086. Nor does...
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Moncrief v. Williston Basin Interstate Pipeline Co.
...eight times, including this litigation. See Moncrief v. Martin Oil Serv., Inc., 658 F.2d 768 (10th Cir.1981); Moncrief v. Pasotex Petroleum Co., 280 F.2d 235 (10th Cir.1960); Moncrief v. St. Regis Corp., No. TCA 85-7023-WS, 1985 WL 17480 (N.D.Fla. Aug. 13, 1985); Moncrief v. Louisiana Land ......
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Little v. Page
...interpretation of lease rights as will favor development and permit completion of a well rightfully commenced. Moncrief v. Pasotex Petroleum Co., 280 F.2d 235 (10th Cir.1960). In this case the lease did not contain a provision that the commencement of drilling within the primary term kept t......
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Steinkuehler v. Hawkins Oil and Gas, Inc.
...term. State ex rel. Commissioners of Land Office v. Carter Oil Co., 336 P.2d 1086, 1090 (Okla.1958). See also, Moncreif v. Pasotex Petroleum Co., 280 F.2d 235 (10th Cir.1960); 8 H. Williams & C. Meyers, Oil and Gas Law 146 (1984). On the other hand, a commencement type drilling clause in an......
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CHAPTER 15 FEDERAL ROYALTY ACCOUNTING FOR DISPROPORTIONATE SALES FROM FEDERAL UNITS AND CORRESPONDING STATE ISSUES (TAKES vs. ENTITLEMENTS)
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