| Opinion: | FourPoint Energy v. BCE-Mach II, 2021 OK CIV APP 46 |
| Subject matter: | Oil & Gas |
| Date Decided: | October 22, 2021 |
| Trial Court: | District Court of Custer County; Judge Weedon |
| Route to this Court: | Appeal from certified interlocutory order under 12 O.S. § 994(A); assigned to Court of Civil Appeals, Division I. |
| Facts: | Appellee purchased all of Enervest’s interest in various properties, including properties subject to Oklahoma Corporation Commission orders naming Enervest as operator of certain wells. Appellee was then approved as bonded operator of the pooled well and began operating the pooled wells. Appellant filed suit seeking a district court declaration that, pursuant to the applicable JOAs, it (rather than Appellee) is the rightful operator of the wells at issue; (2) an order enjoining Appellee from conducting operations or interfering with the Appellant’s operations because Appellant is the rightful successor to EnerVest; and (3) a monetary award for damages arising from Appellee’s alleged breach of contract for failure to turn over operatorship to the Appellant. Appellee sought dismissal, adn the trial court granted dismissal as to the declaratory judgment and injunctive relief on all pooled properties for lack of subject matter jurisdiction and as to Appellant’s breach of contract action on pooled properties. The court denied dismissal of the claims relating to non-pooled properties and certified the interlocutory order for review. |
| Standard of Review: | De Novo |
| Analysis: | Though the Appellant purports to have petitioned the district court to declare Appellant the operator of the pooled wells and to restrain and enjoin Appellee from operating those wells pursuant to private JOAs, the power to designate an operator of wells subject to pooling orders is exclusively the Commission’s–even when private JOA provisions indicate otherwise. As such, the District Court lacked subject matter jurisdiction to declare Appellant FourPoint Energy the operator of the wells subject to pooling orders. With regard to the breach of contract claim, Despite the trial court’s indication to the contrary, in reality there was–and is–no need to await the resolution of the Commission proceedings regarding the designation of a successor operator because whether the Commission designates as operator Appellant or Appellee may be separated from Appellant’s cause of action for breach of contract. In other words, even if the Commission–which alone has the authority to designate an operator–ultimately designates Appellee, the Appellee may nevertheless be on the hook for damages on Appellant’s alleged breach of contract claims pursuant to the applicable JOA provisions. |
| Outcome: | Affirmed in part and reversed in part. |
| Vote: | Prince, J. (author), Goree, P.J., Mitchell, J. concur. |
| Other: | No cert. petition filed; assigned to COCA on September 22, 2021 and decision issued thirty days later. |
