efore the generally accepted rule that, where an oil and gas mining lease provides for the payment to the lessor of a fixed sum, in the nature of rental, for a gas well, and the lease also provides that gas must be found in paying quantities, or in quantities large enough to transport, the question whether the gas, which is found, is in paying quantities, or in quantities large enough to transport, is to be left to the judgment of the lessee, acting in good faith. McGraw Oil Gas Co. v. Kennedy, 65 W. Va. 595, 64 S.E. 1027, 28 L.R.A. (N.S.) 959; Lowther Oil Co. v. Miller-Sibley Oil Co., 53 W. Va. 501 Page 35, 44 S.E. 433, 97 Am. St. Rep. 1027; Young v. Forest Oil Co., 194 Pa. 243, 45 A. 121; Summerville v. Apollo Gas Co., 207 Pa. 334, 56 A. 876; Manhattan Oil Co. v. Carrell, 164 Ind. 526, 73 N.E. 1084; Osburn v. Finkelstein, 189 Ind. 90, 126 N.E. 11; Bay State Petroleum Co. v. Penn Lubricating Co., 121 Ky. 637, 87 S.W. 1102; Hennessy v. Junction Oil Gas Co., 75 Okla. 220, 182 P. 666; Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934; Union Gas Oil Co. v. Adkins (C.C.A.) 278 F. 854, 857; Thornton on Oil Gas (4th Ed.) § 148; Morrison De Soto, Oil and Gas Rights, p. 91. In the case of Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934, cited above, the court said:
lution of the habendum clause in the Michigan Law Review, vol. 19, No. 2. (3) Cassell v. Crothers, 193 Pa. 359, 44 A. 446, 20 M. R. 160; Detlor v. Holland, 57 Ohio St. 492, 49 N.E. 690, 40 L. R. A. 266; Collins v. Mt. Pleasant Oil Gas Co., 85 Kan. 483, 118 P. 54, 38 L. R. A. (N. S.) 134; Ash Grove Lime, etc., Co. v. Chanute Brick Tile Co. (Kan.) 116 P. 1087 Northwestern Ohio Nat. Gas Co. v. Tiffin, 59 Ohio St. 420, 54 N.E. 77; Chaney v. Ohio Oil Co., 32 Ind. App. 193, 69 N.E. 477; Indiana Nat. Gas Oil Co. v. Beales (Ind. App.) 74 N. R. 551; Perkins v. Sanders, 109 Kan. 372, 19A8 P. 954; Baldwin v. Blue Stem Oil Co., 106 Kan. 848, 189 P. 920; Humphreys v. Fletcher, 27 N. Mex. 639, 204 P. 70; Brown v. Fowler, 65 Ohio St. 507, 63 N.E. 76; Young v. Forest Oil Co., 194 Pa. 243, 45 A. 121, Western Penn. Gas. Co. v. George, 161 Pa. 47, 28 A. 1004, 34 W. N.C. 332, 20 M. R. 345; Enfield v. Woods, 198 Ky. 328, 248 S.W. 842, 4 O. G. 698; Union Gas Oil Co. v. Adkins, 278 Fed. (C. C. A.) 854; Roach v. Junction Oil Co., 72 Okla. 213, 179 P. 934; Hennessey v. Junction Oil Gas Co., 75 Okla. 220, 182 P. 666; Anthis v. Sullivan Oil Gas Co., 83 Okla. 86, 203 P. 187, 3 O. G. 83; Guffey v. Smith, 237 U.S. 101, 59 L.Ed. 856, 35 S.Ct. 526, rev.'g 202 Fed. 106, 120 C. C. A. 436; Murdock-West Co. v. Logan, 69 Ohio St. 514, 69 N.E. 984. Sec. 72. "* * * The finding or producing of oil or gas, during the fixed term, in accordance with the provisions of the lease, is a condition precedent to the right to hold or produce from the land after the expiration of the fixed term, however, extends the lease after the expiration of the fixed term as long as that condition shall continue * * *"
But this lease is an Oklahoma contract, and the parties apparently agree, at least for the purposes of this case, that under Oklahoma law, actual production within the definite term of the lease is not a condition precedent to the extension of the lease beyond its definite term; that the lessee has a reasonable time to market the gas after discovery and expiration of the definite term of the lease. And see Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934; Strange v. Hicks, 78 Okla. 1, 188 P. 347; Parks v. Sinai Oil Gas Co., 83 Okla. 295, 201 P. 517; Eggleson v. McCasland, D.C., 98 F. Supp. 693. Cf. Skelly Oil Co. v. Wickham, 10 Cir., 202 F.2d 442 and Bain v. Portable Drilling Corp., 200 Okla. 569, 198 P.2d 207. While accepting the rule as stated, the appellants state the question for decision as whether the gas was marketed within a reasonable time, and relying upon the literal language of the Christianson case, supra, the question is said to be not whether the lessees exercised due diligence under an implied covenant to market, as the trial court reasoned, but whether they discharged "an absolute duty to market within a reasonable time to prevent termination.
See Pack , 1994 OK 23, ¶ 8, 869 P.2d at 326 ("[I]n order to extend the fixed term of ten years 'and acquire a limited estate in the land covered thereby the lessee must have found oil or gas upon the premises in paying quantities by completing a well thereon prior to the expiration of such fixed term.' " (quoting Carter Oil Co. of W. Va. , 1958 OK 289, ¶ 36, 336 P.2d at 1094 ) ); Roach v. Junction Oil & Gas Co. , 1919 OK 103, ¶ 5, 179 P. 934, 936, 72 Okla. 213, 179 P. 934 ("It was a condition precedent to the right of defendant to continue operations beyond the period of five years that oil and gas or either of them should be found upon the premises in paying quantities ...."); Curtis v. Harris , 1919 OK 305, ¶ 4, 184 P. 574, 575, 76 Okla. 226, 184 P. 574 ("Under the express and unequivocal terms of the lease, the rights of both parties were to terminate January 8, 1917, if a well was not completed .... The lease terminated by its terms on the 8th of January, no well having been drilled ....").--------
In so holding, we determined that if the exclusive right to extract the minerals is conveyed, such right is divisible and profit a prendre capable of legal existence as a servitude "unattached" to land (in gross), and may be transferred in gross, either in whole or in part, as an estate in real property. In Gypsy Oil Co. v. Cover, we said (189 P. at p. 544): "This Court held in the case of Roach v. Junction Oil Gas Co. [ 72 Okla. 213], 179 P. 934, 935 [1919], that after gas was found upon the leased premises (within the primary term of the lease) in paying quantities, the lessee became vested with a limited estate in the leased premises for further operations in accordance with the terms of the lease — citing Brennan v. Hunter [ 68 Okla. 112], 172 P. 49, citing numerous cases." 78 Okla. 158, 189 P. 540, 11 A.L.R. 129 (1920).
In the situation thus brought about, it was clearly incumbent upon defendant, under the remaining terms of the lease, to have found oil or gas in paying quantities on the Mullen tract prior to the expiration of the ten-year period on July 30, 1923, in order to have continued in force the lease beyond that date and as long thereafter as oil or gas may be produced in such quantities. Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934; 1 Thornton's Law of Oil and Gas (4th Ed.) 415, sec. 148. This was undertaken about three years before the primary term expired with failure in production.
The establishing of that condition as a fact became the only possible theory on which the appellants could claim any right of possession. ( Parks v. Sinai Oil Gas Co., 83 Okla. 295 [ 201 P. 517]; Roach v. Junction Oil Gas Co., 72 Okla. 213 [ 179 P. 934]; 1 Thornton Oil Gas, p. 153, sec. 91.) The evidence affirmatively shows that no gas or oil was produced in paying quantities.
The establishing of that condition as a fact became the only possible theory on which the appellants could claim any right of possession. ( Parks v. Sinai Oil Gas Co., 83 Okl. 295 [ 201 P. 517]; Roach v. Junction Oil Gas Co., 72 Okl. 213 [ 179 P. 934]; 1 Thornton Oil Gas, p. 153, sec. 91.) The evidence affirmatively shows that no gas or oil was produced in paying quantities.
This did not constitute an abandonment of the Niles production. See Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934, 936; Parks v. Sinai Oil Gas Co., 83 Okla. 295, 201 P. 517, 519. Affirmed.
Thus to extend the fixed term in "completion" leases and acquire a limited estate in the land covered thereby the lessee must have found oil or gas upon the premises in paying quantities by completing a well thereon prior to the expiration of such fixed term. Roach v. Junction Oil Gas Co., 72 Okla. 213, 179 P. 934; Parks v. Sinai Oil Gas Co., 83 Okla. 295, 201 P. 517; Gypsy Oil Co. v. Marsh, 121 Okla. 135, 248 P. 329, 48 A.L.R. 876; Henry v. Clay, Okla., 274 P.2d 545. In that connection the commissioners take the position that under such provisions discovery of oil or gas in paying quantities within such term is not sufficient, but that such production must be taken from the ground and marketed within such period.