The rule of capture gives a mineral rights owner title to the oil and gas produced from its lawful well bottomed on its property, even if the oil and gas flowed to the well from another landowner’s tract. The rule is based on the fugitive or flowing nature of oil and gas, as opposed to other minerals mined from below the surface.
The rule of capture as a legal concept is not new; the rule dates back to the days of the earliest drilling in the 1800s. Also, companies have been using hydraulic fracturing techniques for over 50 years. According to the Rocky Mountain Mineral Law Institute, the first fracture purportedly took place in the Hugoton Field in west Kansas in 1947. However, with the advent of better drilling techniques, hydraulic fracturing fissures today may extend as far as 3,000 feet. It stands to reason, then, that disputes between adjacent landowners will continue to arise.
In some states, compulsory pooling or forced pooling laws may address some issues between adjacent landowners. For example, in North Dakota, if multiple property owners on contiguous parcels do not agree to pool their subsurface mineral rights and divide the royalties, the state can force the landowners to do so. For discussion, see Continental Resources, Inc. v. Farrar Oil Co., 559 N.W. 2d 841, 844-45 (N.D. 1997).
Some courts have found that a cause of action exists when fracturing materials cross property lines. In the case of Zinke & Trumbo, Ltd. v. State Corporation Commission, 749 P.2d 1 (Kan. 1988), the plaintiff challenged the Kansas Corporation Commission’s setting of the allowable for a fracked well being drilled 330 feet from the adjacent property line, where the effective rate of the allowable was known to be 400 feet. The fluids and materials of the drilling company crossed the property lines. The court noted that the Corporation Commission had a duty to consider the effect on neighboring property when granting the lease.
For more information, or for assistance with your leasing or royalty rights and related litigation, contact Toni Ellington at (504) 599-8500.