Court Opinion

ID: 9793143
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:43:34.907615+00
Date Added: 2024-06-11T08:01:47.153575
License: Public Domain

BARNES, Justice,
dissenting:
I respectfully dissent from the Majority Opinion’s conclusion that depreciation is an element in determining if oil and gas is being produced in “paying quantities”.
As stated in the Majority Opinion, Oklahoma has a strong policy of statutory law against forfeiture of estates. 23 O.S.1971, § 2. It would appear to me that an operator should be encouraged to continue production, even of small quantities of oil, so *859that if the operator is willing to continue operation we should put as little burden on him as possible to show that production was in paying quantities. Here, the burden of proving the illusive concept of depreciation on lifting equipment might well be the straw that causes the operator to cease production rather than face a court battle in determining that question. This item is particularly illusory in this day of inflation where the salvageable value of the lifting equipment might in fact be increasing in value rather than decreasing in value.
I believe that the additional expense of repair of lifting equipment, as it gets older, would, when figured in on the lifting costs, serve as sufficient allowance for depreciation, and that depreciation of lifting equipment should not be considered in determining whether or not a well is producing in paying quantities.
I further dissent for the reason that, under the facts of this case, production has never ceased and there is no question but that it is producing in paying quantities at the present time, even if depreciation is considered as a necessary element in determining whether or not the lease is producing in paying quantities.
I am authorized to state that Justice WILLIAMS concurs in this opinion.