SPECIAL ARTICLES.

Detailed technical reports on special subjects, the result of research work or extended field investigations, will continue to be issued as separate bulletins by the Bureau, as has been the custom in the past.

Shorter and less elaborate technical papers and articles by members of the staff and others are published in each number of 'Mining in California.'

It is anticipated that these special articles will cover a wide range of subjects both of historical and current interest; descriptions of new processes, or metallurgical and industrial plants, new mineral occurrences, and interesting geological formations, as well as articles intended to supply practical and timely information on the problems of the prospector and miner, such as the text of new laws and official regulations and notices affecting the mineral industry.

OIL AND GAS RIGHTS.

By A. H. RICKETTS, of the bar of the Supreme Court of the United States, of California and of Nevada.

Copyright, 1924, by A. H. Ricketts.

PART I.

ADJUDICATED TERMS AND PHRASES.

§1. As Long as Gas or Oil is Found in Paying Quantities.

The term, “as long as gas or oil is found in paying quantities" means, not merely that those minerals shall be found in paying quantities, but also that either oil or gas shall actually be discovered and produced in paying quantities within the term named in the lease, and if neither oil nor gas is being produced at the end of the term of years named in the lease, the lease ends.1

§2. Casing Line.

A casing line is a large, strong rope used in oil-well drilling to raise and lower the casing."

§3. Commencing Operations.

To commence operations is the performance of some act which has a tendency to produce an intended result.3

§4. Completed Well.

The term "completed" as used in a lease means finished or sunk to the depth necessary to find oil or gas in paying quantities, or to such a depth as in the absence of such oil or gas would reasonably preclude the probability of finding oil or gas at a further depth. It can not be construed to mean that the lessee bound himself, under penalty of for

Union Co. vs. Adkins, 278 Fed. 854.

Long vs. Foley, 82 W. Va. 502, 96 S. E. 794.

Flemming Co. vs. South Penn Co., 37 W. Va. 645; 17 S. E. 203: Terry vs. Texas Co., Tex. C. A., 228 S. W. 1019; Duffield vs. Russell, 13 Ohio C. C. 266; see Henderson vs. Ferrell, 183 Pa. St. 547, 38 Atl. 1018; and see Henning vs. Wichita Co., 100 Kan. 255, 164 Pac. 297.

feiture, to sink a producing well or in the absence of oil or gas to bore through to China."

§ 5. Diligence.

To prosecute drilling with due diligence to success or abandonment means, that there must be a product capable of division between the parties in the proportions mentioned in the lease. Unless this is done, drilling is not prosecuted to success. The rule is that whatever, under the circumstances, would be reasonably expected of operators of ordinary prudence, having regard to the interest of both lessor and lessee, is what is required."

§ 6. Fixtures.

A fixture is an article which may or may not actually be affixed to the freehold. Engines, boilers, hoisting works, mills, pumps, electric hoist firmly bolted to the substructure upon which it rests, the superstructure and engine house sufficiently affixed to the soil for mining purposes, a gallows frame together with the gallows, hoist and transformer forming integral parts of one mechanism are fixtures. So, a boiler and smokestack, derrick, belt house, calf and bull wheels, rig irons, drilling tools, bunkhouse and oil well casing affixed to the land

4 Frost vs. Martin, Tex. C. A. —, 203 S. W. 72. The term "completion of well" for the purpose of operating and testing of the amount of production, as used in a drilling contract, means the clearing of the well after reaching the specified depth, so that the sand reached may give that flow of production, by its own force or by pumping, which would result from a well so prepared in the ordinary and usual manner for making preparation for such test. Twin States Co. vs. Westerly Co., Okla., 220 Pac. 839; see Parish vs. Bridgewater Co., 51 W. Va. 558, 42 S. E. 655. In Chapman vs. Ellis, Tex. C. A., 254 S. W. 616, it is said that the word "completed" is ambiguous, and where ambiguity in the terms of a contract exists, the testimony of experts in matters of the kind called for in the contract is admissible to explain the ambiguity. That a well may not be completed until it is "shot," see Uncle Sam Co. vs. Richards, 76 Okla. 277, 175 Fac. 749. In Unity Oil Co. vs. Hill, - Ky. 255 S. W. 151, the well was cased, and showed what was called a "rainbow of oil." It was not shot and was not a producing well; that is, one from which oil in profitable quantities could be taken. It was contended that it was not a completed well within the terms of the contract since it was not shot. It was not shown that the evidence of oil was such as to indicate to a reasonably prudent man that the shooting of the well would result in the production of oil. There was not a pipe line close enough to justify shooting at that time. It was held that in view of the evidence as to the prospects of oil it was not necessary to shoot the well or that the shooting of it could reasonably be expected to make it a producing well; see, also, Rice vs. Ege, 42 Fed. 661. It will be deemed "completed" when the contract depth is reached. Key vs. Big Sandy Co., Tex. C. A., 212 S. W. 300.

Kennedy vs. Crawford, 138 Pa. St. 561, 21 Atl. 19.

Eastern Oil Co. vs. Beatty, - Okla., 177 Pac. 104; see Hall vs. South Penn Co., 71 W. Va. 82, 76 S. E. 124. That there may be a too strenuous as well as a too dilatory operation see Wellsville Oil Co. vs. Miller, 44 Okla. 493, 145 Pac. 344.

7 Merritt vs. Judd, 14 Cal. 59; Watterson vs. Cruse, 179 Cal. 379, 176 Pac. 870; Breyfogle vs. Tighe, 58 Cal. A. 306, 107 Pac. 1036; Conde vs. Sweeney, 16 Cal. A. 157, 116 Pac. 319; Washburn vs. Inter-Mt. Co., 56 Or. 578, 109 Pac. 382; see Midland Oil Co. vs. Rudneck, 188 Cal. 265, 204 Pac. 174. A chattel will remain such although attached to the realty when it is the subject of a conditional sale. Arnold vs. Goldfield Co., 32 Nev. 447, 109 Pac. 718; Montana Co. vs. Northern Valley Co., 51 Mont. 266, 153 Pac. 1017.

Arnold vs. Goldfield Co., supra ; see Mammoth Co. vs. Juab County, 10 Utah 232, 170 Pac. 78.