Youngblood v. Seewald, 6793.
| Decision Date | 05 April 1962 |
| Docket Number | No. 6793.,6793. |
| Citation | 299 F.2d 680 |
| Parties | L. S. YOUNGBLOOD and M. L. McLain, Appellants. v. Hughes SEEWALD, Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
C. Harold Thweatt, of Crowe, Boxley, Dunlevy, Thweatt, Swinford & Johnson, Oklahoma City, Okl. (George S. Guysi, Oklahoma City, Okl., with him on the brief), for appellants.
Wallace E. Robertson, of Robinson, Robertson & Barnes, Oklahoma City, Okl. (T. Murray Robinson, Oklahoma City, Okl., with him on the brief), for appellee.
Before PICKETT and HILL, Circuit Judges, and CHRISTENSON, District Judge.
This declaratory judgment action was brought by the owners of overriding royalties in the oil and gas production from lands in Cimarron County, Oklahoma, to determine the effect of a pooling order of the Oklahoma Corporation Commission upon their interests. They appeal from a judgment holding that when the plaintiff McLain, the owner of leases within the drilling unit, accepted a 1/8th of 8/8ths royalty in the production, in lieu of participating in the well, he was required to pay from his royalty income all burdens on the leases over and above the statutory 1/8th royalty.
The facts are stipulated. By previous order, the Commission had established each governmental section in the area in question as a drilling unit for the production of natural gas from the Keyes Sand formation. The defendant Seewald, owned the oil and gas leases covering all of Section 18, Township 4 North, Range 9 ECM, except 64.22 acres, the leases to which were owned by the plaintiff McLain, and 11.66 acres, the lease to which was owned by a company not here involved. McLain's leases were originally acquired by the plaintiff Youngblood subject to a 3/16ths royalty interest to the lessors. Youngblood sold and assigned the leases to McLain, reserving an overriding royalty of 1/8 of 7/8ths of all production of oil and gas which might be obtained pursuant to the terms and provisions of the leases. Seewald was unable to reach an agreement with McLain for the acquisition of the drilling rights owned by him, and, being desirous of drilling a well to explore the gas possibilities under Section 18, filed an application with the Commission for an order pooling the lessee interests. A pooling order was issued, the pertinent portion of which reads:
Of the several options offered in the order, McLain elected to take an overriding royalty of 1/8th of 8/8ths in lieu of his right "to participate in the working interest of" the well.1
The authority of the Oklahoma Conservation Commission to control the drilling of a well or wells into a common source of supply for the production of oil and gas from land which has been the subject of a drilling and spacing order is found in 52 Okl.St.Ann. § 87.1(d). The question here arises from the provision of that statute which reads:
"* * * provided, where a lease covering any such separately owned tract or interest included within a spacing unit stipulates a royalty in excess of one-eighth (1/8) of the production, or said lease shall be subject to an overriding royalty, to production payment or other obligation, then the lessee of said lease out of his share of the working interests from the well drilled on said unit, shall sustain and pay said excess royalty, overriding royalty, or production payment, and therefrom meet any other obligation due in respect to the separately owned tract or interest held by him."
Seewald contends that, by virtue of the statute and the pooling order, he acquired the full 7/8ths working interest in the leases formerly owned by Youngblood, subject only to the 1/8th of 8/8ths overriding royalty created when McLain elected to take an overriding royalty rather than participate in the well or accept a cash bonus. The effect of this contention is that when the one designated to drill the well on a drilling unit acquires the working interest on other leases within the unit by virtue of the pooling order, the owners of excess or overriding royalties in those leases must look to the person who...
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Kohlman, Application of
...State, 1957, Okl., 306 P.2d 305; Superior Oil Co. v. Oklahoma Corp. Commission, 1952, 206 Okl. 213, 242 P.2d 454; and Youngblood v. Seewald, 1961, 10 Cir., 299 F.2d 680, as those cases which have recognized the authority of the Oklahoma Corporation Commission to impose risk compensation und......
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O'Neill v. American Quasar Petroleum Co.
...becomes the property of a person authorized to drill the well, and that unit operator is required to pay the bonus. Youngblood v. Seewald, 299 F.2d 680 (Okl. 10 Cir. 1961). Inasmuch as the order sets the amount of O'Neill's option on the basis that (although not participating) he will stand......
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Ranola Oil Co. v. Corporation Com'n of Oklahoma
...the property of a person authorized to drill the well, and that unit operator is required to pay the bonus." Citing, Youngblood v. Seewald, 299 F.2d 680 (10th Cir.1961).9 C.F. Braun & Co. v. Corporation Commission, 609 P.2d 1268, 1272 (Okl.1980).10 Crest Resources v. Corporation Commission,......
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North American Royalties, Inc. v. Corporation Com'n of Oklahoma
...becomes the property of a person authorized to drill the well, and that unit operator is required to pay the bonus. Youngblood v. Seewald, 299 F.2d 680 (Okl. 10 Cir.1961)...." The Commission's order must be read in the context of the statutory authority underlying the Commission's actions. ......
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CHAPTER 11 NON-RECORD TITLE CONSIDERATIONS
...of subsequently created interests. [52] See Article III.D. of AAPL Form 610-1982 Model Form Operating Agreement. Youngblood v. Seewald, 299 F.2d 680 (10th Cir. 1961) (when forced pooled, the drilling parties must bear all burdens on the forced pooled interest). [53] See, Article VIII. D. of......
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CHAPTER 2 STATE CONSERVATION REGULATION -- SINGLE WELL SPACING AND POOLING -- VIS-À-VIS FEDERAL AND INDIAN LANDS1
...compulsory pooling statute expressly authorizes a risk penalty. N.D. Cent. Code § 38-08-08 . [31] 31. See, e.g., Youngblood v. Seewald, 299 F.2d 680 (10 Cir. 1961) (construing Oklahoma law). [32] In Oklahoma, royalty owners are paid by the operator and royalty is calculated on a "weighted-a......
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The rule of capture - an oil and gas perspective.
...level. For cases illustrating the difficulty of dealing with excess royalties in spacing and pooling, see Youngblood v. Seewald, 299 F.2d 680 (10th Cir. 1961); Mulsow v. Gerber Energy Corp., 697 P.2d 1269 (Karl. 1985); and O'Neill v. American Quasar Petroleum Co., 617 P.2d 181 (Okla. 1980).......
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CHAPTER 10 SPACING, FORCED POOLING, AND EXCEPTION LOCATIONS
...460 P.2d 630 (Okla. 1970). [160] 6 Williams & Meyers, supra note 1, § 943, at 662. [161] 194 F. Supp. 417 (W.D. Okla. 1961), rev'd, 299 F.2d 680 (10th Cir. 1961). [162] 6 Williams & Meyers, supra note 1, § 944, at 676. [163] Colo. Rev. Stat. § 34-60-116(7) (1984). [164] Utah Code Ann. § 40-......