Hladik v. Lee

BERRY, Justice:

An oil and gas lessee, acting pursuant to pooling clauses in several leases, created a 480 acre unit [the “declared unit”] for production of gas. The Corporation Commission subsequently entered order establishing one 160 acre tract within declared unit as a drilling and spacing unit [the “spacing unit”] for production of gas from Red Fork formation. The issue presented herein is whether the spacing unit superseded the declared unit insofar as concerns distribution of royalty upon gas produced from spaced formation through well on spacing unit.

The parties stipulated as to all…