Court Opinion

ID: 9447982
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:19:10.448419+00
Date Added: 2024-06-11T17:31:14.974525
License: Public Domain

LEWIS, Circuit Judge
(dissenting).
I dissent. The result reached not only rejects the exercise of a discretion given to the trial court but, in my opinion, upsets an ultimate finding of fact that the lessee has had sufficient time, in view of the totality of the circumstances, within which to “determine whether to explore or to release it (the leased lands).” The subject lease unwisely unitized by contract three separate tracts of land not only widely separated geographically but totally disconnected geologically. The productivity of one tract thus had contract significance and served to relieve the lessee of the obligation of paying delayed rentals. But the development of one tract had no geological significance in judging the lessee’s conduct in further development of the lease and renders unimportant the fact that but two and a half years lapsed between the completion of the well and the institution of this suit. The reality is that lessee had over eleven years within which to consider the separate tracts which the trial court ordered to be developed or released. I believe the judgment of the trial court to be in accord with the cardinal principles of fair play, Trust Co. of Chicago v. Samedan Oil Corp., 10 Cir., 192 F.2d 282, and I agree with the trial court’s analysis of the equities:
“So we have this situation that the defendant contends on the one hand that the geological information does not warrant the further development of its lease in Sections 10 and 18, but the lands have not been condemned and it is at liberty to sit by and wait *56until someone else drills in that immediate vicinity — perhaps in other parts of the section — to find out as to the productivity of the two tracts in its lease which is the subject of this lawsuit. In the meantime, the plaintiffs are obliged to stand by even though more than ten years have elapsed since they leased the land; they can no longer collect rentals; they cannot lease it to other parties and even though they might be able to obtain a substantial bonus for a lease on these two additional tracts they are obliged to wait until some one with the drill bit either proves or condemns the leased acreage.
“We do not believe that this is the law in Oklahoma or elsewhere under the so-called prudent operator rule.”
I would affirm.