### 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 March21, 1949, concerns a Rending application to clean cut, redrill, and produce awell. The accompanyin file Indicates that under date of December 20, 19

### 97,8notice 

### oflntention to drill a Number2well on a .49 acre tract was submitted to the Railroad Commlsslon. It was shorn et the hearing enJanuary lb, 1938, that the well was desired as a staggered offset to a well e&I another tract. Anexception to Rule 

### 37and a permit to drill was granted by order of January 25, 1938, speclfyirig the location. Noprotest or attack on the order Is shownin the file.

Anapplication to plug dated May21 1941, rec~eived by the 

### CommissioninAustinonHay26,1941, states that drilling was cemmenoedOctober 21, 1938, and completed November

### 3,1938;that the total depth was 

### 3,561feet; and that the well weenet producing, The deputy ,aupervlsor of the district, underdate of May22, 1941, noted on the appllcatlan, “OR, 

### 18 lac ka cement.” Theplugging record, received by the Cermission In Austin June 

### 3,1941 recites that the well was plugged on May22, 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 wasnot producing whenplugged. It appears from testimonyHon. Will,$an J, Murray, Jr. - Page 2-V-816

that the pumpingequipment, the derrick foundation and the surface pipe were left at the looaMon. Theplugging was voluntary and not under orders of the Commission.

Anappllcatlon to drill twe feet over from the original location In the nameof the original permittee, dated August 9, 1946, was heard August 23, 1946. Thenotice stated tbat:

“This location 18 to take the place of old we11No. 2, which was plugged and abandened due to mechanical trouble, ” Theposition 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: 1well was considered to be properly placed andwonld drain the tract.

Anapplication dated April 25, 1947, to “redrill, clean out and prsdqcc well We. 2 e
. owhich was voluntarily plugged eq acaount ef mechanical ceqdition andwhich wa6’ a good preducileg well” was received in Austin enApril 29, 1947. T&eCe~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 anAugust 18was given, stating:

questid &‘follows: 25 feat northwest

the locatton being reof Well Ho. 1, and25 feet southeast of the northwest line, ?a be drilled to 3700 feet, TQls Is a request tt redrill, clean Out, andprqduce well He.2 * which was veluntarlly ply&Bed en acceunt of mechanloal ctnd+tlon.* Thelocation spec;ified iq one foot closer to the nurthwest property line than the location sptclffed In the original permit. The depth proposed is. the sameas orlgln4lly applied for but is 140 feet greater than the total depth ahewnen the plugging rtcard, Amemtradumby the applicant’s attorney submitted en August 1 i, 1947, takes the pssltlon that theHon. 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.

Aletter of protest dated August 22, 1947 states that the applicant Is producing through Ifs Re. 1well 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,eneC6minlssientr stating that after ceafereatt with membersof this Office, ha had concluded that the application must be treated as one te drill a newwell, the original permit having been oanoelltd by the voluntary filing of the plugging and abandenme& report.

Anether application **by** the 6ameparty was filed Hevember 26, 1948, “to drill, clean out and preduae well Re. 2 D

. Dwhich was valuntarlly plugged on account of rechsnical oendltltn andwhich was a good producer." The lecatien applied for is again one foot closer te 

### thenorthwest line than the original Me. 2 permit distance. This applicatien was treated as a 'm&Ion for rehearing andwauerdertd 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.3well 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

Yourefer ua to the recent case of HumbleOil k Refining Co. v, Cook, 

### 215S.W,2d 

### 383(Tex,Civ.App. 1948, error ref .n.r,e,) D

TheCook 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 hadbeen voluntarily plugged in December, 1941, by the assignee of a former lessee, An “Application to Plug andWell 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 hadnot 

### beenchallenged.

The Court of Civil Appeals held that the Cook tract was a subdivision andwas not entitled to the original (1937) permit as an exception to prevent confiscation, but that Rumblecould not nowattack it.

Humbleargued 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 hadbeen abandoned, the permit therefor mu8 t have terminated, Theappellees, in a brief signed by a memberof 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 whatwas proposed to be done with the well so that the Commlsafon could control the %eworklb operations, and so that, whencompleted, the Commission could place the well “back on production” by assigning it an allowable, The following statement is quoted from the appelleess brief:

“Webelieve this ease must be

affirmed on this ground: It is admitted that the well went off production purely because of~‘mechanica1 defects, Whenit went off, it was a legal well, so held and regarded by all 0 Amechanical defect does not change a legal well into an illegal oneo The Railroad Commfasi6n has unlimited power to permit mechanical defects to be remedied, andwhatever

.Hon. Wllllaa J. Huurray,Jr, ‘W Page 

### 5- 

### V-816

those defect8 maybe IAAature or scope or coots 18 the conaern of the

‘operator. The~order wa6broad enough to permft any repa$rs necessary to be madea8 long as the same, or practltally the same, hole was used. We perceive that such repalre are ulnually madeby an operator, even without an order, aAdcertainly without opening up the question of the validity of the original order made,nlne years prevlouslY. TheCourt 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 andnothing more. Strictly speak1Y It might be aald that when the welt fs drilled, the office of ‘the permit is terminated and the permit “ethau8t.ea.n Weknowthat 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. A8a neces8ap9 consequence such permit carries with It the right, in the event of production, to operate th’ewell and to produce the 011 or gas under the tile6 aAdregulations 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~~recorddsea not skewthat the rights andprivilege6 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 byHOA,William J. Murray, Jr. - Page 

### 6 -V-816

clear and satisfactory evidence. DDO AnIntention to abandon Involves an Intention not to return and reoccupy the property. DDO "Measured by these standalrds the evfdence does not conclusively showan 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 nowopen to attack..

TheSupremeCourt refused the application with the notltion, "Refu?ed. lo Reversible Error," thereby indiCatiAg (Rule 

### 483,Tex. Rules Clv. Proc.) that "* * dthe SupremeCoupt 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*

IAHumble'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 

### 37permit 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 SupremeCourt and by the alternative theory for denial of the writ suggested by Respondents. Toe, Humblestrongly urged that any declslon as to the original permit was outside the record.

Wedeemit beet, 

### fnview of the foregoing, to construe the Cook case as deciding that an order of the Commlsslen granting a permit "to redrfll andput 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 

### netbeen ab8ndened. So oensldered, the Ceok case Is autherlty fer the Cemmlsrien te deter

### mine,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 

### ana18aet fer a newwell.

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 wa8not iea8lble to redrill the well and put It back on productka.

Since the Instant applloatlon require8 the aeterminetlon ef factual 18sye8, wecannet ~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 madela the light it the legal te8t.8 laid downtherein.

AnaBpplcat1on "to drill, clean

out, aad preduce" awell drilled under an uri$ttacked permit granted as an exceptlan to Rule 37 maybe graated although the tract war a& originally entitled to an exceptlea and although the well wa8plugged aad reported eight year8 ago, if the Railroad Comlsrlen finds from 8ubSt8at$al evldeace that the Wlginal permit ha6net 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,

BenIi, Rice, III Amistant BIiR:bt