Untitled Texas Attorney General Opinion ( 1945 )

GROVER SELLERS
honorable Olin Culberson, Chairman
Railroad Commission of Texas
Austin, Texas
Dear Sirr Opinion No. O-6603
Ret lkuld an injunotion prohib-
iting the drilling or pro-
ducing from a certain well
prevent the Railroad ConwAs-
sion from granting an exoep-
tion to Rule 37, allowing
such drilling because of a
change in conditions?
Your letter of September 5, 1945, requests the opinion of this De-
partment as to whether or not, under the facts stated, the Commission
would be in contempt of court in asswning jurisdiction and hearing an ap-
plication for an exceptionti Rule 37 based upon ohangad oonditions when
the permit to drill at the identioal location had been cancelled and
annulled by the Courts and the applicant permanently enjoined from pro-
duoing suah well.
From your letter and information oontained in our file No. A. G.
3740, we determine the following faotsr
On June 16, 1943, judgment was entered in the 126th
District Court oancelling and annulling the order entered
bythe Commission in Rule 37, &se No. 24,062, dated
August 28, 1940, granting &us B. Spear permit to drill
well No. 2 on his Hubbard Botor 0.95 acre tract in Gregg
County and permanently enjoining Spear from drilling or
producing euch well.
Prior to 1935, Spear drilled Well No. 1 on the same
tract at'a location approximately 75 feet north of the
proposed Well No. 2. Spear now desires to plug and aban-
don Well Elo.1 (due to faulty equipment, aooording to in-
formation furnished this office by Spear) and oontemporane-
ously with the application to plug Tlo.1 desires:a permit
to reopen and produce No. 2.
The Connnissionhad allowed the drilling of Well No. lmany years
prior to the application for and the drilling of Well No. 2. For the
purpose of this‘opinion RU presume that permit for Well k. 1 was a valid
Hon. Olin Culberson, Page 2 (O-6603)
permit as no appeal is evidenced by the facts stated or in the file
in this case. We further presume that Spear was entitled to one well
as a matter of law to protect vested riahts. the location of such to
be determined by the C-&mission to prev&t &te and confiscation, as
there is no indication that the traot of land was illegally subdivided.
The concluding paragraph of the judgment above referred to reads
as follows,
"This judgment is without prejudioe to any right
of the Defendant, Angus B. Spear, to apply for a new
permit to operate said Well No. 2 and without preju-
dice to aqy right of the Railroad Commission tog-ant
a new permit to operate said well Xo. 2 when and if
ever oonditions have so materially ohanged as to au-
thorize the granting of an exoeption to Rule 37 in
this location." _
We do not dean it neoessary here to discuss fullythe authority
and jurisdioti.onof the Railroad Commission relating to the production
of oil, but think it till suffioe to oite the aase, of Railroad Caamis-
aion VS. l@ncksr, 168 S.,W. (2d) 625 in which Mr. Justioe Sharp saidi
“The statutes authoriee the Railroad Commission to
handle the details relating to the production of oil
and gas in the State. Article 6004, et seq., Vernon's
Annotated Civil Statutes. The Railroad Conmission has
exolusive original jurisdiction to determine the mat-
ter of changed oonditions in granting permits to drill
wells, subject to the right of appeal to the courts.
agnolia Petroleum Co. V. Ren Prooess Production Co.,
129 Tex. 617, 104 S.W.2d 1106; Gulf Land Co. V.
Atlintio Refining Co., 134 Tax. 59, 131 S.W.2d 73;
Brown v..Rumble Oil & Refining Co., 126 Sex. 296, 63 5.
II. 2d 935, 99 b. L. R. 1107r The Railroad Conssission
is given the power to determine prilaarilyall faat is-
suss, that is, all issues that are not established as
a matter of law: and to permit the aourts to pass upon
a question not passed on by the Commission would violate
such power. Gulf Land Co. V. Atlantic Refining Co.,
dupra; Brown V. Humble Oil & Refining Co., suprah"
And further in the Henoker case, the Supreme Court said:
"Until the Railroad Commission has exercised
ths:powers conferred on it by law over oprtain
matters, its jurisdiation over such matters should
notbe denied.*
Hon. Olin Culberson, Page 3 (O-6603)
Cited in the opinion in the Wenoker case, supra, are authori-
ties which leave no doubt as to the exclusive original jurisdiction
of the Commission to determine the matter of ohanged conditions and
the courts~will not usurp such function.
Inthe instant situation the Commission is called upon to find
that the plugging of the No. l'wll will oreate such a change of aon-
dition on the lease as to warrant the granting of a new permit at the
No. 2 location. The above quoted section of judpent aoknqwledges the
"right of the Conmnissionto grant a new permit to operate said 'IkallNo.
2 when and if .ever conditions have so materially ohenged as to authorize
the granting of an exowption to Rule 37 in this location."
Under the stated faots the plugging of No. 1 Rotor will result
in the lease having no produoing well thereon. This, in our opinion,
brings about a condition of ahange as contemplated by the interpreta-
tion placed on the statutes by the appellate courts. Whether the No.
2 Well will be identified in that manner or will be referred to as No.
1, or any other number, is immaterial as the fact remains it mill lit-
erally be the only producing well on the lease. In the Uenoker case,
supra, Justice Sharp discusses fully the effeot of numbering wells on
the same lease. It follows that the Consaissionhas jurisdiction to
hear such application and if it finds that the location of the now
existing No. 2 Well is one that will prevent confiscation andwaste
and a permit be granted, such a&ion will not, in our opinion, be in
oontempt of the Judgement of June 16, 1943.
Yours very truly,
#.TTORNEYGENEXAL OF TEXAS
&’
a/ Harris Toler
Harris Toler
Assistant
APPRCVED SEP 12 1945
S/Grover Sellers
ATlORNEYGERBRLL OPTBXAS
Approved Opinion Committee
By WVG Chairman