Court Opinion

ID: 9691231
Source: CourtListenerOpinion
Date Created: 2023-08-24 20:17:46.563142+00
Date Added: 2024-06-11T18:19:13.779052
License: Public Domain

VANDE WALLE, Justice,
concurring specially.
Justice Meschke, for the majority, in a well-written opinion, has thoroughly analyzed the applicable statutes of our oil and gas conservation Act and I agree with most of what he has written. I do not agree that the findings of fact are so inadequate *599that I am unable to understand the basis of the Commission’s decision.
Appellate courts often believe findings of fact prepared by trial courts and administrative agencies should be better. Aside from that, however, I believe the findings are minimally adequate for the purpose, although they do not provide us with a detailed explanation of the Commission’s rationale. Those findings, as recited in the majority opinion, indicate that because all the mineral owners of the 640 acres included in the temporary spacing order shared in the production of the well, they should all continue to share in the production of the existing well and current wells to be drilled on the spacing unit. It is uncontested that one well will adequately drain only 320 acres. Therefore, one well could not adequately drain 640 acres although all the mineral owners of the 640-acre spacing unit shared in production. That cannot be undone. The Commission’s position obviously is that in order to protect correlative rights in the future all owners should continue to share in the production of all wells on the 640-acre spacing unit. Were a second well to be drilled in which only the owners under that 320 acres would share — but who also had shared in the proceeds of the original well on the 640 acres — the unfairness becomes apparent. It appears obvious to me from the findings and conclusions that this is the Commission’s method of protecting correlative rights. That task is far from an exact science and the scales may not weigh evenly.
The majority opinion recognizes that orders of the Commission are to be sustained if the Commission has regularly pursued its authority and its findings and conclusions are sustained by the law and by substantial and credible evidence. Section 38-08-14(4), N.D.C.C.; Amoco Production Co. v. N.D. Indus. Com’n, 307 N.W.2d 839 (N.D.1981). In Amoco we cited with approval Citizens State Bank of Neche v. Bank of Hamilton, 238 N.W.2d 655 (N.D.1976), to the effect that substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. In addition to the testimony quoted in the majority opinion, I find the following colloquy in the transcript of the hearing before the Commission:
“Mr. Bender: ... would it protect correlative rights if a well is drilled in the N/2 of 2 and only the people in the N/2 of 2 would be able to share the production when they’ve had an opportunity to share in the production of the well in the S/2 of 2?
“Ceci Searls: It would be designed that if we get the 640 acres for the existing wells, that a well drilled in the N/2 of 2 would be shared equally by everyone in the 640 acres. Just as the well in the S/2 has been.
“Mr. Fleck: But, his question is if you didn’t do that would that be fair?
“Ceci Searls: Would that be fair?
“Mr. Fleck: Would that be protecting correlative rights if you let the N/2 owners get all the royalty out of that after they’ve shared down here.
“Ceci Searls: No. I don’t think it would.

“Mr. Winkjer: Just one if I may followup on that. But you’re talking about that the N/2 of Section — that a well in the N/2 of Section 2 may not be drilled. You know, if you were to tell us today that you were going to drill a well in the N/2 of Section 2 we’d have no objection to your plan or the other half of either of these other sections. But it is the uncertainty, the speculativeness of having dual spacing within the same field and sharing oil with parcels of property that are not contributing that creates the problem. We’ll go along with the — with this issue if you’ll give us a commitment as to when these other wells will be drilled, or the leases for those other 320 acre tracts be given up and let the landowners then go out and do their own marketing to protect their correlative rights.”
Additional dialogue between counsel for the respective parties and members of the staff of the Commission leave little doubt that the rationale is to protect correlative rights by requiring all who shared in the *600original well to share in additional wells on the spacing unit because much of the oil had been produced during primary production.
The findings thus are adequate for me to understand the reasoning of the Commission in this regard. However, I am not convinced from the findings that in this instance it necessarily follows that correlative rights are being protected. The temporary order of the Commission proved to be incorrect in that we now know that one well will drain only 320 acres rather than 640 acres. Thus mineral owners shared in the production of a well who should not have shared therein. But an order requiring that a second well drilled on the 640-acre spacing unit should be shared in by all the mineral owners in that spacing unit is not, alone, a sufficient basis for a conclusion that correlative rights will be protected. Unless there are findings by the Commission, based on evidence before it, that there are sufficient reserves to justify the drilling of a second well on the unit in which the Hystads would share, I do not believe correlative rights would be protected. If, in fact, there will be no second well drilled because of marginal reserves or because of other factors known to the Commission from the evidence before it, the order before us only perpetuates the inequity created as a result of the temporary spacing order permitting mineral owners whose property is not drained by the well on the Hystads’ property to continue to share in that well.
It may be that a second well on the spacing unit would produce in as large or greater quantities than the current well, but the Hystads have indicated they are willing to risk the possibility that another well will be drilled in the spacing unit from which they would not share in the production. Although their preference is not decisive, it is their correlative rights, along with those of other mineral owners in the spacing unit, which are to be protected.
The Commission may have adopted a per se presumption that in each instance in which the Commission reduces the spacing in a field in which wells have been drilled and in which there are spacing units with diverse mineral ownership that the type of order here at issue will be entered to protect correlative rights. Although such an order has some ease of decision-making, it should not necessarily be determinative where, such as here, there is objection to that presumption. I agree with Justice Meschke that the decision in Larsen v. Oil & Gas Conservation Comm’n, 569 P.2d 87 (Wyo.1977), has much to recommend it, although I am not convinced that such information is always available to the Commission.
I cannot determine from the findings nor, for that matter, the evidence before the Commission, .the specific testimony necessary to a determination of these concerns and I therefore concur with the remand for the purpose of receiving additional evidence and making further findings.
LEVINE, J., concurs.