Opinion ID: 2613135
Heading Depth: 1
Heading Rank: 3

Heading: foreword and summary of holding

Text: We begin our analysis by emphasizing that Genevieve Crane is not a party to the action before the federal court. This Court does not decide hypothetical questions [1] and Crane has made no claim of adverse possession of her sister's undivided 1/2 mineral interest in the NW/4 NE/4. Therefore, we are constrained to address the federal court's certified questions only insofar as they apply to the litigants of this action. With this limitation firmly in mind, we answer the questions as follows. We hold that a leasehold interest may not be adversely possessed either (1) by the drilling of and production of oil and gas from a well drilled on a separate tract of land within a drilling and spacing unit created by the Corporation Commission, or (2) by the possession of that oil and gas leasehold under a claim of right for the statutory period. Because we answer Certified Questions 1(a), 1(b) and 1(c) in the negative, we need not address Certified Questions 1(d), 2 or 3. We also hold that, while the Commission has jurisdiction to resolve issues involving correlative rights of mineral interest owners within a drilling and spacing unit, jurisdiction to decide the present quiet title action properly lies with the district court. We hold that the 1967 quiet title judgment has no effect upon defendants' mineral interest rights in the NW/4 NE/4, because they were neither parties nor privies to the quiet title action. Finally, because plaintiffs cannot, under the facts presented, establish a prescriptive leasehold to the disputed minerals beneath the NW/4 NE/4, the champerty statute is inapplicable to this case.
Regarding adverse possession, the decisive issue in this case is whether production from the James Unit No. 1-A well, located in the NW/4, constituted production from the NW/4 NE/4. Plaintiffs' primary argument is that after the creation of a spacing unit by the Corporation Commission, production from a unit well is treated as occurring from all tracts within the unit. [2] Relying on this premise, they argue that a portion of the production from the unit well was directly attributable to the NW/4 NE/4. Thus, plaintiffs conclude that their production from the unit well and/or possession of the minerals attributable to the NW/4 NE/4 has resulted in the acquisition of a prescriptive leasehold to defendants' severed mineral interest in that tract. Each of the cases relied upon by plaintiffs [3] involved the rights of mineral interest owners and/or their lessees to share in the production of a unit well pursuant to § 87.1 of the Oklahoma Oil and Gas Conservation Act, 52 O.S. 1981 § 81, et seq. None of the cited cases addressed the power to adversely possess a mineral interest or leasehold in one tract by production from a separate tract, nor did they involve a dispute over ownership of a mineral estate or lease. Because of this distinction, and for the reasons set forth below, we hold that plaintiff's attribution theory is not applicable in the context of adverse possession. In order for a person to adversely possess a severed mineral estate, he must actually open a well on a tract of land and reduce the minerals under that tract to possession for the statutory period. Mohoma Oil Co. v. Ambassador Oil Corp., 474 P.2d 950, 960 (Okla. 1970). Under the law of capture, a landowner or mineral owner does not own migratory substances underlying his land. He only has an exclusive right to drill for, produce, or otherwise gain possession of such substances. Frost v. Ponca City, 541 P.2d 1321, 1323 (Okla. 1975). See also Feely v. Davis, 784 P.2d 1066, 1068 (Okla. 1989). This Court has determined that those rights include the right to reduce to possession oil and gas coming from land belonging to others. Kuykendall v. Corporation Comm'n, 634 P.2d 711, 716 (Okla. 1981); Wood Oil Co. v. Corporation Comm'n, 205 Okla. 537, 239 P.2d 1023, 1026 (1950). Because title or ownership of migratory substances is not acquired until the substances are reduced to actual possession and controlled, [4] an owner or his lessee may drain the substances from under an adjacent tract without violating the rights of the owner whose tract is being drained. The foregoing demonstrates that under the law of capture a person cannot acquire prescriptive title to minerals drained from any tract other than that upon which his well is located. Plaintiffs concede that they could never have established a prescriptive leasehold to defendants' severed mineral interest in the absence of a drilling and spacing unit. They contend, however, that the law of capture was altered through the creation of a drilling and spacing unit in Section 24. We must therefore determine what effect the drilling and spacing unit had upon the law of capture and plaintiffs' ability to adversely possess the leasehold interest in the disputed minerals in the NW/4 NE/4. Initially, we note that the purpose of 52 O.S. § 87.1 is to prevent the drilling of unnecessary wells. Ward v. Corporation Comm'n, 501 P.2d 503, 507 (Okla. 1972). When the Commission creates a drilling and spacing unit, except in extreme cases, only one producing well may be drilled on the unit. The drilling of any other well within the unit is prohibited. Id.; 52 O.S. § 87.1(e). It is because of this rule that we held in Ward that non-drilling owners within a drilling and spacing unit must be permitted to participate in production of the unit well. To impose this denial without granting the right to participate in production of the unit well, as of the time the non-drilling owners were prohibited from drilling, is the taking by the State of their property without due process in violation of the Fourteenth Amendment to the Constitution of the United States. Ward at 507. Applying Ward to the present case, we hold that under the due process clause, the state could not deprive Ashinhurst of her right to drill a well, while permitting the adverse acquisition of that interest through production from a statutorily created unit well. Because the state forbade Ashinhurst from drilling her own well, the state must protect her against the adverse acquisition of those rights through production from another well. This is particularly true where such adverse possession is attempted through production from a well established by state action. The Oil and Gas Conservation Act confers upon the Commission limited authority to protect correlative rights in the development and production of oil and gas. Samson Resources Co. v. Corporation Comm'n, 702 P.2d 19 (Okla. 1985). The power to protect correlative rights is limited by definition and by the terms of the Act. Id. at 22. Under the Act, the Commission may (1) establish drilling and spacing units and set production allowables, (2) permit the drilling of additional wells in a spacing unit, and (3) order unit interests pooled where owners cannot agree on terms regarding voluntary development. Id. at 22-23. Aside from the recognized power to monitor certain terms and conditions of the contract imposed on the parties through a forced pooling order, no other powers to protect correlative rights are granted or implied by this statute.  Id. at 23 (emphasis added). The Act was established to protect correlative rights. See Inexco Oil Co. v. Corporation Comm'n, 628 P.2d 362, 364 (Okla. 1981). As we noted in Samson, the Act specifies certain limited powers that the Commission may exercise in attempting to protect those rights. If no other powers to protect correlative rights are granted or implied by this statute, it is axiomatic that the law of capture is affected only to the extent contemplated by the exercise of those powers enumerated in the Act: The law of capture, under which oil and gas is owned by the one lawfully reducing it to possession, still obtains in Oklahoma, except as it has been or may be regulated or restricted under laws passed in the exercise of the police power, such as the proration and spacing statutes and city zoning ordinances. Those laws do not abrogate the law of capture. They are not self-executing. They simply authorize administrative boards to issue orders that have the effect of regulating or abrogating in a measure the law of capture. Gruger v. Phillips Petroleum Co., 192 Okl. 259, 135 P.2d 485, 488 (1943). Adverse possession and prescriptive titles are not addressed by the Act. The enumerated provisions of the Act affect the law of capture only with respect to sharing in production of a unit well. No other provisions are implied. Because the Act does not alter the applicable property law rules to be used in determining ownership of an interest included within a drilling and spacing unit, the law of capture controls the instant case. Applying the law of capture to the facts presented, we hold that plaintiffs did not establish a prescriptive leasehold to defendants' mineral interest in the NW/4 NE/4. On the basis of the foregoing, we answer Certified Questions 1(a), 1(b) and 1(c) in the negative. We hold that a leasehold interest may not be adversely possessed either (1) by the drilling of and production of oil and gas from a well drilled on a separate tract of land within a drilling and spacing unit created by the Commission, or (2) by the possession of that oil and gas leasehold under a claim of right for the statutory period. Because we answer the foregoing questions in the negative, we need not address Certified Questions 1(d), 2 or 3.