Court Opinion

ID: 9671602
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:40:13.875507+00
Date Added: 2024-06-11T09:48:24.013940
License: Public Domain

Ethridge, J.
specially concurring:
I concur with the original decision and that on suggestion of error. The following states my understanding of what we decide.
Appellant, Texas Gulf Producing Company, argues that, when the 40 acre tract was incorporated into Unit 14, and that unit became producing by the drilling of a unit well not on the 40 acre tract, this production constituted production not only under the leased lands within the unit, but also fixed the term and preserved the lessee’s estate under the entire lease including that in the 8 acre tract under lease outside of the unit.
*146At common law and under the usual habendum clause in an oil and gas lease, one producing well during the primary term on any part of the lease will continue the lease in effect as an entirety. The provision fixing the term of the lease is ordinarily considered indivisible. And in several cases the Louisiana Courts have held that where part of leased lands is incorporated in a compulsory unit, and a producing well is drilled in the unit not on the leased lands therein, such production continues the lease in effect as to both the lands in the unit and outside the unit. Hunter Co., Inc. v. Shell Oil Company, Inc., 211 La. 893, 31 So. 2d 10 (1947); Le Blanc v. Danciger Oil & Ref. Co., 218 La. 463, 49 So. 2d 855 (1950); Smith v. Carter Oil Co., 104 F. Supp. 463, (D. C. W. O. La., April 10, 1952). See also Gray v. Cameron, 234 S. W. 2d 769 (Ark. 1950). However, those cases dealt with orders of the Louisiana Commissioner of Conservation which expressly provided that production within the unit should continue all leases affected thereby in effect. And the Louisiana compulsory pooling statutes then in existence expressly so provided. But in the instant case, neither the order of the State Oil and Gas Board nor the Mississippi conservation statutes of 1932 and 1936 expressly so provide.
In order to reach the suggested result, the Court would have to imply from the 1932 and 1936 conservation statutes, and the rules of the Board thereunder, not only that production within the unit constitutes production under each tract therein, which has already been decided by this Court, but also would have to imply that units so created under the 1932 and 1936 conservation statutes, in which production was had not on leased lands therein, would continue the lease in effect as to leasehold lands outside of the unit. I do not think that this implication is warranted by the 1932 and 1936 statutes and the rules of the Board. The orders of the Board in question and the actions of the lessee concerning Unit 14 were re*147stricted to property within the unit. The aforesaid doctrine of indivisibility of the obligations of the lease is applicable only between the contracting parties and their successors in interest. The situation in the instant case was not caused by the lessor, but was brought about by the actions of appellant, lessee, the statutes, and the intervention of the State Oil and G-as Board in the exercise of the police powers of the state. The division of obligations of the lessee was effectuated by these statutes, the actions of the Board and of appellant, lessee.
It may be that the Legislature has the power to provide that production as in the instant case would continue the lease as to lands outside the unit. It is my understanding of the present decision that we do not consider here either that issue or whether the 1950 compulsory pooling act so provides; nor do we consider whether a producing well on the leased lands in the unit continues the lease on lands outside of it. We are now holding simply that we are not willing to imply from the general terms of the 1932 and 1936 statutes, and the supplementary rules of the Board under that legislation, that the Legislature intended that production not on the leased lands within the unit would continue the lease as to lands not within the unit.