¶11 Because this is a suit by Hall to cancel certain oil and gas leases belonging to Galmor, it is a matter of equitable cognizance, requiring the application of two standards of review.Smith v. Marshall Oil Corp. , 2004 OK 10, ¶ 8, 85 P.3d 830, 833 ; Hininger v. Kaiser, 1987 OK 26, ¶ 10, 738 P.2d 137, 141 ; Cotner v. Warren , 1958 OK 208, ¶ 5, 330 P.2d 217, 219 ; Henry v. Clay , 1954 OK 170, ¶ 12, 274 P.2d 545, 548. ¶12 We will not reverse the trial court's factual findings or ultimate decision unless they are clearly against the weight of the evidence.
This resulted in a lawsuit filed by Concorde to quiet title and to obtain damages against only Kepco, Williams and Mahalo. Kepco, Williams and Mahalo counterclaimed to adjudicate Concorde's leases as expired and to quiet their respective titles. In effect, these are akin to "top leases," which are leases that take effect only if the pre-existing lease should expire or be terminated. See, Smith v. Marshall Oil Corp., 2004 OK 10, 85 P.3d 830 n. 4. ¶ 6 Williams, alone, and Kepco and Mahalo, jointly, moved for summary judgment.
¶ 22 This quiet title action is a matter of equitable cognizance. See Hall, 2018 OK 59, ¶ 11, 427 P.3d at 1061 (citing Smith v. Marshall Oil Corp., 2004 OK 10, ¶ 8, 85 P.3d 830, 833; Hininger v. Kaiser, 1987 OK 26, ¶ 10, 738 P.2d 137, 141; Cotner v. Warren, 1958 OK 208, ¶ 5, 330 P.2d 217, 219; Henry v. Clay, 1954 OK 170, ¶ 12, 274 P.2d 545, 548). In equitable cases like this, issues of fact are reviewable under the clearly-against-the-weight-of-the-evidence standard, but issues of law are reviewable under the de novo standard.
The terms "produced" and "produced in paying quantities" have substantially the same meaning. Pack v. Santa Fe Minerals, 1994 OK 23, ¶ 8, 869 P.2d 323, 326. The meaning of that phrase is set out in Smith v. Marshall Oil Corp., 2004 OK 10, ¶ 9, 85 P.3d 830, 833. In the state of Oklahoma, when the term "produced" is used in a "thereafter" provision of an habendum clause, its meaning is that of "production in paying quantities."
The terms “produced” and “produced in paying quantities” have substantially the same meaning. Pack v. Santa Fe Minerals , 1994 OK 23, ¶ 8, 869 P.2d 323, 326. The meaning of that phrase is set out in Smith v. Marshall Oil Corp. , 2004 OK 10, ¶ 9, 85 P.3d 830, 833.In the state of Oklahoma, when the term “produced” is used in a “thereafter” provision of an habendum clause, its meaning is that of “production in paying quantities.
The earlier leases are commonly referred to as base leases. Smith v. Marshall Oil Corp., 2004 OK 10, fn. 4, 85 P.3d 830; Voiles v. Santa Fe Minerals, Inc., 1996 OK 13, ¶ 11, 911 P.2d 1205. ¶ 6 In November of 2001, the Alfalfa County court granted Continental's request for a temporary injunction.
16] Other courts use similar tests and consider relevant facts and circumstances in deciding whether a well was producing in paying quantities. See, e.g., Texaco, Inc. v. Fox, 228 Kan. 589, 618 P.2d 844, 848 (1980) (stating the production of a well should be considered over a sufficient period of time to reflect the current production status of a lease and to provide the information a prudent operator would take into account in deciding whether to continue the operation); Mich. Wis. Pipeline Co. v. Mich. Nat'l Bank, 118 Mich.App. 74, 324 N.W.2d 541, 545 (1982) (stating a lessor must establish that the lessee was not making a profit from the operation and that a reasonably prudent operator would not have continued to operate under similar circumstances); Moerman v. Prairie Rose Res., Inc., 2013 MT 241, ¶¶ 31–32, 371 Mont. 338, 308 P.3d 75 (applying an ordinary prudent operator standard and considering the facts and circumstances of the case to determine if a lease remained in effect); Smith v. Marshall Oil Corp., 2004 OK 10, ¶ 12, 85 P.3d 830 (stating the court considers the facts and circumstances of a cessation to determine whether a failure to produce in paying quantities is sufficient to terminate a lease); La. Stat. Ann. § 31:124 (2014) (defining production in paying quantities as production sufficient to induce a reasonably prudent operator to continue production in an effort to secure return on investment or to minimize loss); see also 3 Patrick H. Martin & Bruce M. Kramer, Williams & Meyer Oil and Gas Law § 604.5, 77 (2014); 38 Am. Jur. 2d Gas and Oil § 214. [¶ 17] This Court has never expressly defined what test should be used to determine whether a well is producing in paying quantities but, like these other courts, we have indicated the facts and circumstances should be considered.
In addition to evidence the well was capable of producing gas immediately upon completion, Russell Gcyer stated he retested the well in 1992 and 1998, and opined the well was capable of producing gas in paying quantities on both dates. ¶ 9 Relying on Smith v, Mars/mil Oil Corp., 2004 OK 10, 85 P.3d 830, Defendants assert Plaintiffs failure to produce gas from the well, combined with the absence of any valid equitable considerations, resulted in a termination of Plaintiffs leases under their respective habendum clauses. However, the Smith Court specifically distinguished the facts of that case — where the evidence indicated the subject wells were not capable of producing in paying quantities — with those present in Pack — where "the parties stipulated that the subject wells were at all times capable of producing in paying quantities. . . ."
Where the "evidence supports the trial court's rendering a directed verdict," the granting of a directed verdict will be affirmed. Smith v. Marshall Oil Corporation, 2004 OK 10, ¶ 23, 85 P.3d 830, 838. ¶ 4 The evidence reveals that just before leaving from the City's park office, the City's driver visited with people who were gathered underneath a porch while it rained.
On appellate review, the decision of a court in equity will not be reversed unless it is clearly against the weight of the evidence. Smith v. Marshall Oil Corp., 2004 OK 10, 85 P.3d 830. III. Fraud and the Disclosure Duty