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Geothermal Kinetics, Inc. v. Union Oil Company of California

California Court of Appeal
75 Cal. App. 3d 56 (1977)

Written by Colette Routel, JD

Facts

Union Oil Company of California (Union Oil) (plaintiff) owned the surface rights in a 408-acre tract of land in Sonoma County, California, known as “The Geysers,” while Geothermal Kinetics Inc. (Kinetics) (defendant) owned “all minerals in, on or under” it. In 1973, Kinetics drilled a geothermal well on The Geysers at considerable cost. Union Oil quickly sued Kinetics, claiming that Kinetics’ right to “minerals” was limited to physical substances, and geothermal resources were not physical substances, but rather, heat. The trial court concluded that Kinetics owned the geothermal resources underneath The Geysers. Union Oil appealed.

Rule of Law

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Issue

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Holding and Reasoning (Scott, J.)

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