## Facts

- A refinery operated by Champlin Petroleum Company (CPC) was located within a unitized oil and gas area governed by an operating agreement; Champlin Exploration, Inc. (CEI) served as unit operator.
- Refined hydrocarbons leaked from pipes or conduits at CPC’s refinery and migrated a few hundred feet through shallow subsurface areas due to gravity and water pressure.
- After discovering losses, CPC promptly attempted recovery by digging trenches on its premises, pumping the escaped substances, and returning them to CPC’s possession.
- Western Bridge & Steel Co., Inc. owned only the surface estate of adjacent land within the unit area.
- Jim Peckham, Western’s president, acting individually, collected refined hydrocarbons from shallow holes or trenches on Western’s premises and sold the recovered material to Dosan Refining Co.
- CEI sued for a declaratory judgment determining ownership of the escaped refined hydrocarbons and sought an accounting from CPC, Western, Peckham, and Dosan for the value of hydrocarbons taken.

## Issues

1. Whether a refiner loses title to refined hydrocarbons when they escape into the ground and migrate, making them subject to the law of capture.
2. Whether, absent abandonment, third parties may acquire ownership by collecting escaped refined hydrocarbons from shallow subsurface accumulations.
3. Whether CEI, as unit operator, had a superior claim to the escaped refined hydrocarbons or to an accounting for their value.

## Decision

- The Oklahoma Supreme Court affirmed the trial court’s judgment.
- The court held CPC retained title to the escaped refined hydrocarbons because escape alone does not divest ownership.
- The court concluded the rule of capture did not apply to refined hydrocarbons previously reduced to possession.
- The court held title would be lost only upon abandonment proven by competent evidence, and CPC’s prompt recovery efforts showed non-abandonment.
- CEI was denied declaratory relief and an accounting; the action was dismissed as to the other defendants.

## Legal Principles

- Refined hydrocarbons that have been produced and reduced to possession are personal property governed by ordinary property rules, not the rule of capture.
- Accidental escape of personal property into the ground does not, by itself, transfer ownership; the original owner retains title unless abandonment is shown.
- Abandonment requires intent to relinquish ownership plus conduct consistent with that intent; lack of abandonment may be shown by prompt recovery efforts.
- Prior cases involving escaped hydrocarbons may be distinguished where no claimant asserts prior ownership, but an identified owner promptly asserts and acts to reclaim the property.

## Conclusion

The court held that refined hydrocarbons remain the refiner’s personal property after an unintended leak and subsurface migration, and they are not subject to capture by others unless competent evidence establishes the refiner abandoned them.


Champlin Expl. Inc. v. W. Bridge & Steel Co., 597 P.2d 1215 (Okla. 1979)