Fransen v. Eckhardt
Supreme Court of Oklahoma
711 P.2d 926 (Okla. 1985)
The Eckhardts (defendants) reserved a quarter mineral interest for 30 years, extendable as long as minerals were being produced in paying quantities, when conveying land to the Fransens (plaintiffs) in 1952. A well was completed on the land in September 1981, and gas was determined available in paying quantities that same month, but the pipeline needed to actually deliver the gas wasn't finished until April 1982, with gas first actually produced on May 5, 1982 — after the January 22, 1982 expiration of the 30-year term. The Fransens sued to quiet title, arguing the term interest had expired before actual production began; the case reached federal court, which granted the Eckhardts summary judgment, and the Tenth Circuit certified the paying-quantities question to the Oklahoma Supreme Court.
Whether, for purposes of extending a term mineral interest beyond its primary term based on "production in paying quantities," a well merely capable of producing in paying quantities is equivalent to a well actually producing in paying quantities.