NEYGENERAL 

OFTEXAS 

April 28, 1949 

Hon. William J. Xurray, Jr. 

Chairman, Railroad Comnlsslon 

Austin, Texas 

Opfnion Ro. V-816 

Re: The effect ef filing a 

plug and abandwent report on a Rule 37 permit. 

Dear Sir: 

Your letter of March 21, 1949, concerns a 

Rending application to clean cut, redrill, and produce a well. The accompanyin file Indicates that 

under date of December 20, 19 9 7, 8 notice of lntention to drill a Number 2 well on a .49 acre tract 

was submitted to the Railroad Commlsslon. It was 

shorn et the hearing en January lb, 1938, that the 

well was desired as a staggered offset to a well e&I 

another tract. An exception to Rule 37 and a permit 

to drill was granted by order of January 25, 1938, 

speclfyirig the location. No protest or attack on 

the order Is shown in the file. 

An application to plug dated May 21 1941, 

rec~eived by the Commission in Austin on Hay 26, 1941, 

states that drilling was cemmenoed October 21, 1938, 

and completed November 3, 1938; that the total depth 

was 3,561 feet; and that the well wee net producing, 

The deputy ,aupervlsor of the district, underdate of 

May 22, 1941, noted on the appllcatlan, “OR, 18 l a c k a 

cement.” 

The plugging record, received by the Cermission In Austin June 3, 1941 recites that the 

well was plugged on May 22, lghl; that it was filled 

with mud-laden fluid, accerdlng to the regulation6 

of the Commission; that 22 sacks of cement were used 

in plugging; that the well wes not shot”that 2,463 

feet of casing, was pulled ; and that the well was not 

producing when plugged. It appears from testimony 
Hon. Will,$an J, Murray, Jr. - Page 2 -V-816 

that the pumping equipment, the derrick foundation and the surface pipe were left at the looaMon. The plugging was voluntary and not under 

orders of the Commission. 

An appllcatlon to drill twe feet over from 

the original location In the name of the original 

permittee, dated August 9, 1946, was heard August 23, 

1946. The notice stated tbat: 

“This location 18 to take the 

place of old we11 No. 2, which was 

plugged and abandened due to mechanical trouble, ” 

The position was taken at the hearlq that the original 

well was plugged in error and that a good well could be 

drilled 0 The appllcatien was refused September 11,1946, 

apparently because the lo: 1 well was considered to be 

properly placed and wonld drain the tract. 

An application dated April 25, 1947, to “redrill, clean out and prsdqcc well We. 2 e . o which 

was voluntarily plugged eq acaount ef mechanical ceqdition and which wa6’ a good preducileg well” was received 

in Austin en April 29, 1947. T&e Ce~lsslon flrlt treated the application as an applicatlop fer rehearing and 

refused to set it fbr hearing. Under date of Auuyst 7, 

1947, apparently under advice of this Office, notice ef 

a hearing an August 18 was given, stating: 

questid &‘follows: 25 feat northwest 

the locatton being reof Well Ho. 1, and 25 feet southeast 

of the northwest line, ?a be drilled 

to 3700 feet, TQls Is a request tt redrill, clean Out, and prqduce well He.2 * 

which was veluntarlly ply&Bed en acceunt of mechanloal ctnd+tlon.* 

The location spec;ified iq one foot closer to 

the nurthwest property line than the location sptclffed In the original permit. The depth proposed is. 

the same as orlgln4lly applied for but is 140 feet 

greater than the total depth ahewn en the plugging rtcard, 

A memtra dum by the applicant’s attorney submitted en August 1 i , 1947, takes the pssltlon that the 
Hon. William J. Murray, Jr. - Page 3-V-816 

applicant still has rights under the original permit and should be permitted to go back In the aamt 

hole and put the well on production. 

A letter of protest dated August 22, 1947 

states that the applicant Is producing through Ifs 

Re. 1 well lore 011 than the amount eriginally In 

place and has a net drainage advantage; that the 

tract Is already twenty times more densely drilled 

than the fiel~d average; that the appHuat+sn would 

double the density; and that old well lo. 2 has been 

formally and flnally plugged and l bandontd. 

The application was rtfustd en October 21, 

1947, ene C6minlssientr stating that after ceafereatt 

with members of this Office, ha had concluded that 

the application must be treated as one te drill a 

new well, the original permit having been oanoelltd 

by the voluntary filing of the plugging and abandenme& report. 

Anether application by the 6ame party was 

filed Hevember 26, 1948, “to drill, clean out and 

preduae well Re. 2 D . D which was valuntarlly plugged 

on account of rechsnical oendltltn and which was a good 

producer." The lecatien applied for is again one foot 

closer te the northwest line than the original Me. 2 

permit distance. This applicatien was treated as a 

'm&Ion for rehearing and wau erdertd granted en Recerber 22, 1948, and sat te be heard January 17, 1949. 

It further appears frem the Ccnninlssion~B 

files that a permit fer a Ma.3 well on a subdlvlslen 

of the erlglnal tract was granted on December 6, 

1940, "to prevent confiscatlen of property and te 

prevent physical waste," The lib. 2 well hsd not bttn 

plugged at this time. 

Your letter requests tuc tplnien en the 

tollewing question, whleh we qtlttt: 

"Is the Rule 37 permit eriglnally granted . 0 . (fer the) IO. 2 

well still a valid permit in spite 

of the fact that the well was subsequently pluggod and abandentd and are 

they (the applicant) tntitlod to redrill and preduce this well under the 

original permit?” 
Hon. William J, Murray, Jr, - Page 4 - V-816 

You refer ua to the recent case of Humble Oil k 

Refining Co. v, Cook, 215 S.W,2d 383 (Tex,Civ.App. 

1948, error ref .n.r,e,) D 

The Cook case was an attack on a permit 

granted in January, 1947 to the fee owner to “redrill and put back on production” an old well which 

had been voluntarily plugged in December, 1941, by 

the assignee of a former lessee, An “Application 

to Plug and Well Record” and a “Plugging Record” had 

been filed with the Commission, Cook purchased the 

property in August, 1946, after ascertaining that 

the lease had terminated and that the permit and 

right to produce the old well had not been challenged. 

The Court of Civil Appeals held that the 

Cook tract was a subdivision and was not entitled to 

the original (1937) permit as an exception to prevent 

confiscation, but that Rumble could not now attack it. 

Humble argued that the 1947 permit to “redrill and put back on production’* should be teeted by 

the rules governing original permits, that since the 

original well had been abandoned, the permit therefor 

mu8 t have terminated, The appellees, in a brief signed 

by a member of this Office, answered that the Commission 

could not in 1947 have reviewed the granting of the 

original permit, but could only hear and determine 

51) the phyafcal atatua of the well; (2) the proposed 

rework!’ operations; and (3% the degrees of deviation 

from the vertical of the proposed redrilling; all 80 

that the CommissfonPs records might reflect what was 

proposed to be done with the well so that the Commlsafon could control the %eworklb operations, and so 

that, when completed, the Commission could place the 

well “back on production” by assigning it an allowable, The following statement is quoted from the appelleess brief: 

“We believe this ease must be 

affirmed on this ground: It is admitted that the well went off production purely because of~‘mechanica1 

defects, When it went off, it was a 

legal well, so held and regarded by 

all 0 A mechanical defect does not 

change a legal well into an illegal 

one o The Railroad Commfasi6n has unlimited power to permit mechanical defects to be remedied, and whatever 

. 
Hon. Wllllaa J. Huurray, Jr, ‘W Page 5 - V-816 

those defect8 may be IA Aature or 

scope or coots 18 the conaern of the 

‘operator. The~order wa6 broad enough 

to permft any repa$rs necessary to be 

made a8 long as the same, or practltally the same, hole was used. We 

perceive that such repalre are ulnually 

made by an operator, even without an 

order, aAd certainly without opening 

up the question of the validity of the 

original order made,nlne years prevlouslY. 

The Court of Civil Appeals affirmed the trial 

court judgment, refusing to Invalidate Cook’s permit. 

IA its opinion, the Court aaid: 

“A ‘permit of the Railroad Conmleelo~ to drill a tent well for 011 

or gas, on Its face, grants thin permission and nothing more. Strictly 

speak1 

Y 

It might be aald that when 

the welt fs drilled, the office of‘the 

permit is terminated and the permit “ethau8t.ea.n We know that this Is not the 

full nature of an gppllcatlon to drill 1 

well nor the extent of the rights conferred by a penalt to drill. A8 a neces8ap9 consequence such permit carries with It 

the right, in the event of production, to 

operate th’e well and to produce the 011 

or gas under the tile6 aAd regulations of 

the RalSroad Commisalon, The life of such 

permit and the privileges eonterred by It 

are not limited by any law or rule of the 

Commls8lon,- 

“Ttxts~~record dsea not skew that the 

rights and privilege6 granted by the wigins1 permft have been aetually,or factually termlp&e&-am&we hwa,-found no legal basis for holding that they have ex- 

‘;;;$ a6 a matter of law. (215 S.V.2d at 

0 

“Abandonment Is principally a matter 

of lnteptlan whfetimuet be established by 
HOA, William J. Murray, Jr. - Page 6 - V-816 

clear and satisfactory evidence. D D O 

An Intention to abandon Involves an 

Intention not to return and reoccupy 

the property. D D O 

"Measured by these standalrds 

the evfdence does not conclusively 

show an abandonment. At most an Issue 

of fact was raised which under the lmplied findings of the Commlsslon and 

trial court have been resolved against 

appellant G These findings are supported by substantial evidence," 

26 at 387). 

(215 S.W. 

In Respondent*8 reply to Humble's application, 

It was argued that writ of error should not be granted 

because the order of the Commlsslon granting the srlglnal 

permit necessarily found that there was no Illegal subdivision, and such order was not now open to attack.. 

The Supreme Court refused the application 

with the notltion, "Refu?ed. lo Reversible Error," 

thereby indiCatiAg (Rule 483, Tex. Rules Clv. Proc.) 

that "* * d the Supreme Coupt Is not satisfied that the 

opinion of the Court of Civil Appeals.1~ all respects has 

correctly declared the law but Is of the opinion that the 

application presents no error which requires reversal. c) . O* 

IA Humble's Motion for Rehearing of the application for writ of error, It was argued that the Court of: 

Civil Appeals had gone beyond the stipulation of the 

parties (quoted 215 S,U.Zd at 384) and the record on the 

Issue of whether the old permit was still In effect after the well was abandoned. 

Even if the Court of Civil Appeal8 opinion IA 

the Cook case be taken as deciding that a Rule 37 permit 

Is still ~valld as a matter of law In spite of the fact 

that the well is subsequently.plugged and abandoned,some 

doubt Is east on such decision by the disposition of the 

application by the Supreme Court and by the alternative 

theory for denial of the writ suggested by Respondents. 

Toe, Humble strongly urged that any declslon as to the 

original permit was outside the record. 

We deem it beet, fn view of the foregoing, to 

construe the Cook case as deciding that an order of the 

Commlsslen granting a permit "to redrfll and put back 
. 

Hon. Ullllan J. Xurray, Jr. - Page 7 -V-816 

en praduotlen" a plugged and abandoned well xl11 

net be eet aside If there lr substantial erldenoe 

te nuppert a finding ef fret that the l rlglaal permit had net been ab8ndened. So oensldered, the 

Ceok case Is autherlty fer the Cemmlsrien te determine, regawthe present appllcatien, the i88uer 

of abmdonment and fea8lbllltJ ef redrilling the 

well, Ass ~rellmlnary, It met neoemarlly be decided that the iA8tant applioatlen is, In fact, an 

application ta rrdrlll the remr permit ana 18 aet 

fer a new well. 

As a corollary, It Is our eplnlon that an 

ipder of the Conuniasien refusing ruoh a permlt weuld 

be 8ustalAed If there is Pubstaatlal evidence te rupport a finding that the original penrit had been abandoned, er that It wa8 not iea8lble to redrill the 

well and put It back on productka. 

Since the Instant applloatlon require8 the 

aeterminetlon ef factual 18sye8, we cannet ~888 ea 

it rrr a matter l $ law. Ye de petit cut, hewover, the 

marlced~ rlmllarlty between the Instant oa8e aad the 

Cook case. Determlaatlon ei the faactual lsrue8 heceIn iheuld be made la the light it the legal te8t.8 laid 

down therein. 

An aBpplcat1on "to drill, clean 

out, aad preduce" a well drilled under 

an uri$ttacked permit granted as an exceptlan to Rule 37 may be graated although the tract war a& originally entitled to an exceptlea and although the 

well wa8 plugged aad reported eight 

year8 ago, if the Railroad Comlsrlen 

finds from 8ubSt8at$al evldeace that 

the Wlginal permit ha6 net been aban- 
Hon. William J. Murray, JP. - Page 8 - V-816 

doned ~aqd-T%at ti ~wiezr8~ble ate 

redrlll'the well and put it back 

on productfun, 

Ben Ii, Rice, III 

Amistant 

BIiR:bt