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Edmonston v. Home Stake Oil & Gas Corporation

Kansas Supreme Court
762 P.2d 176 (Kan. 1988)


Facts

Home Stake Oil & Gas Corporation (Home Stake) (defendant) owned a defeasible one-fourth mineral interest in a subdivided section of land, covering the “north half” and the “southeast quarter.” In 1968, the Kansas Corporation Commission (KCC) ordered a unitization of a large pool of land, including the southeast quarter, but not the north half. The order stated that production anywhere in the pooled unit would be considered production on the entire unit for purposes of extending lease or royalty terms, where appropriate. There was production on the southeast quarter, but it ceased in 1973. There was subsequently production elsewhere in the pooled unit, but there was never production on the north half. Edmonston (plaintiff), who had purchased the section of land that contained the southeast quarter and north half, brought suit, seeking a declaration that the KCC order did not extend Stake Oil’s interest with respect to the north half. The district court held that the KCC’s pooling of the lands at issue extended Stake Oil’s defeasible interest in the southeast quarter, but not the north half. Stake Oil appealed. The United States Court of Appeals for the Tenth Circuit certified this general question for the Supreme Court of Kansas.

Rule of Law

Issue

Holding and Reasoning (Holmes, J.)

Dissent (Herd, J.)

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