Tide Water Assoc. Oil v. Rd. Commission

I concur in the judgment sustaining the permit upon the ground stated. I do not concur in the interpretation of amended rule 37 dated September 2, 1931, as set forth in the opinion of Justice Baugh, to the effect that the language of the rule meant that wells drilled closer than the 330-660-foot spacing distances provided, constituted a finding that greater spacing distances were necessary to prevent waste. In the first place, such a finding would mean that the Commission necessarily found that the thousands of wells theretofore drilled under the lesser (150-300-foot) spacing rule would continuously thereafter cause waste. In the second place, and assuming that the Commission made such a finding of fact, then its later amendments and interpretations of the Special East Texas Rule 37 clearly show that the finding was a mistake. On June 13, 1933, the Commission again amended the East Texas Special Rule 37 so as to relax a rigid enforcement of it, the preamble thereto reading as follows: "It appearing to the Commission, from evidence adduced at the East Texas hearing held in Austin on June 12, 1933, that Rule 37, limiting the spacing of wells in the East Texas Field, including Upshur, Smith, Rusk, Gregg, and Cherokee Counties, Texas, should be amended in order that properties might be more fully developed so as to insure a maximum oil recovery and to allow owners of various properties in said field to protect themselves against inequities which might result from a strict enforcement of Rule 37."

Again and again, by its orders of August 26, 1935, and February 24, 1936, and continuously since by its application of the East Texas Rule 37, the Commission has interpreted said rule, reciting in the first mentioned order that from evidence adduced at its many hearings and from its actual experience and through its experts continuously employed in the administration of the rule, that the closer wells are drilled the greater will be the ultimate recovery of oil and gas from the area so drilled, provided the wells produce equally; and closer spacing is accomplished through application of the exceptions to the general rule to prevent waste or confiscation of property. And unquestionably the Supreme Court held in the Century Case, R. R. Comm. v. Magnolia Pet. Co., 109 S.W.2d 967, that the rule "was not overborne by any presumption, real or supposed," as to waste being caused by drilling wells at closer distances than the general spacing distances prescribed.