Opinion ID: 2603650
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: On August 14, 1985, the Oklahoma Corporation Commission (appellee/Corporation Commission) issued increased density order No. 283661 providing for the predecessors in interest of the appellant, DLB Energy Corp. (DLB Energy), and the appellee, French Petroleum Corporation (French), to re-complete the Harvey Steffen No. 2 (DLB well) and to drill a third well, the Harvey Steffen No. 3 (French well), in the Harvey Steffen Unit (unit) to the Atoka-Morrow formation. [2] When the application was filed, Texaco was operating the unit wellthe Harvey Steffen No. 1 (No. 1 well). Order No. 283661 provides that the three wells are to share a single unit allowable to be established by taking the initial potential test from the best well in the section. Under order No. 283661, the No. 1 well has priority to the unit allowable, the DLB well has second priority, and the French well is authorized to produce the remaining portion of the allowable not produced by the other two wells. However, the order provides that the authority to drill the two additional increased density wells expires one year after the order is executed unless the wells are commenced on or before the expiration date. [3] An attempt to deepen and to re-complete the DLB well began on November 25, 1985. Drilling ended on January 11, 1986. The DLB well's completion report stated that the well was dry, that the formation was too tight, and that no pipe liner was run. The DLB well was plugged by setting an iron bridge plug above the Atoka-Morrow. On December 20, 1988, after having initially denied its application, the Corporation Commission approved DLB Energy's request to reenter the DLB wellbore. [4] DLB Energy began drilling on December 21, 1988. It reentered the DLB wellbore, drilled out the cast iron bridge plug, and re-completed the well in the Atoka-Morrow. Drilling ended on January 9, 1989, and the DLB well began producing on February 22, 1989. It is undisputed that the French well was commenced within the time frame outlined by order No. 283661. The controversy here revolves around the central issues in four related causes before the Corporation Commissionwhether the DLB well was commenced within the time constraints of order No. 283661, and whether it is entitled to priority production of the unit allowable. [5] The right to produce hydrocarbons from the Harvey Steffen Unit is also the subject of an action in district court. DLB Energy asserts its predecessors in interest and those of French executed a farmout agreement (agreement) on April 18, 1985, providing for a virtually identical production priority schedule. On July 10, 1989, DLB Energy filed an action in district court to enforce the private agreement. On September 12, 1989, DLB Energy filed a motion to stay proceedings in the four causes before the Corporation Commission concerning the Harvey Steffen Unit. It requested that the Corporation Commission causes be stayed pending a decision in the district court action. DLB Energy asserted: 1) that a decision in the district court action could impact on French's standing to proceed before the Corporation Commission; 2) that the district court would be charged with determining the contract rights of both parties under the farmout agreement; and 3) that by ruling in the causes, the Corporation Commission might issue an order inconsistent with the district court's judgment and allow French to circumvent its contractual obligations. The administrative law judge heard argument on the motion on September 20, 1989. A decision was rendered from the bench denying the motion to stay on September 29, 1989. The administrative law judge found that no evidence was properly presented to show that a matter of purely private rights was at issue [6] and that French had standing pursuant to 52 O.S.1981 § 112, [7] 52 O.S.Supp.1988 § 87.1, [8] and Spaeth v. Corporation Comm'n, 597 P.2d 320-21 (Okla.1979). [9] DLB Energy appealed the administrative law judge's ruling to the Corporation Commission en banc. The cause was argued to the Corporation Commission en banc on October 10, 1989. On November 6, 1989, the Corporation Commission en banc entered an order affirming the administrative law judge. [10]