# "~FHEA~ORNEYGENERAL OF TEXAS

Honorable Olin Culberson,Chairman Railroad Ccsmnission of Texas 

### Austin, Te'exas
Dear Sir: Opinion No. O-7068 Rer Application of Rule 37 and other conservationregulations to unproven territory. Receipt is aoknowledged of your letter of January 29, 1946,which reads as follm:
"The Railroad Commissionhas a statewide spacing rule that is applicable until such time as special field rules can be promulgated after discovery of oil by wildcat operations. "This rule provides that no well shall be drilled nearer than 330 feet to lease or property line and requireswells to be s'paoed no closer than 933 feet on tie same lease. These same statewiderules also provide for casing rules and other rules governing the drilling and operation of such lease in the event no special field rules are requestedby the operator.
"In the Kemp area of Kaufman County, different operators owning town lots that are only 50 feet by 150 feet in area are filing notices of intention to drill on such small tracts. The policy of the Commissionhas always been to set donm for hearing any notice of intention to drill a wildcat well which is pearer than 330 feet to a property or lease line as an axoeption to Rule 37,which is the spacing rule. "QUSSTIO~;l: V&herethe notice of intention to drill shows the location to be nearerthan 330 feet to a property or lease line, is the Commission, under the statewide spacing rule, required to set such notice of intention to drill for hearing as an exception to Rule 37? 'QUESTION 2% Can the Commissionrequiremore than the filing of notioe of intention to drill in an area that does not yet have production.
"Inview of the fact that different operators are insisting that they do not have to wait for hearing on exceptions to drill by reason of their claimingwildcat operations,may the Consnisnion not ask for an emergency ruling on the question and that you imnediatelygive us your decision."
As we understandyour first question,you desire to be advised whether or not Rule 37, the statewide spacing rule, has application 'coHon. Olin Culberron,page 2 (o-7068)

wildcat operations. This rulewas originally promulgated on November 26, 1919, and, as amendedNay 29, 1934, January 25, 1940, January 1, 1942, February 18, 1943, and Eay 1, 1944, reads as follows: "Section (a). ISo

well for oil or gas shallhereafter be drilled nearer 

### than nine hundred thirty-three (933) feet to any well completed in or drilling to the ssme horizon on the same tract or fans, and no well shallbe drilled nearer than three hundred thirQ (330) feet to aqy proper* line, lease line or subdivision line; provided that the Connnission, in order to preventwaste or to prevent the confiscationof property,may grant exceptions'topennit drillingwithin shorterdistanaes than above prescribedwhen the Commission shall determine that such exaeptionsare necessary either to preventwaste or to prevent the confisoationof property. mhen exoeption to such rule is desired, application therefor shall be made by filing Form 1 in duplicate, completelyfilled out,with the Deputy Supervisor of theRailnoad Commission in the CommissionDistrictwhere thewell or wells are located,which application shall be aoeompaniedby a plat or sketch drawn to the scale of one (1) inch equalling four hundred (400) feet, accurately showing to scale the property onwhich permit is sought to drill a well under an exception to this rule, and accurately showing toscale all other completed,drilling and permittedwells on said pncpperty; and aocurately showing to scale all adjoining surroundingproperties and wells. Such a;lplication shall beverified by some person acquaintedwith the facts, stating that all facts therein statedsrewithin the knowledge of the sffiant true and that the accompanying plat is accuratelydrawn to scale and correctly reflects all pertinent and required data. Such exception shall be granted only after at least ten (10) days' notice to all adjaoent lessees affectedthereby has been given,and after public hearing at which all interestedpartiesmay appear and be hesrd, and after the Commissionhas determined that an exoeption to such rule is necessary either to preventwaste or to protect property belonging to the applicant from confiscation. All pending applicants shall be amended to conform to this rule before being acted upon. "SECTION (B). In order to prevent waste or to prevent the confiscation of property, the Railroad Commission of Texas may upon its ownmotion or order, izsuc or grant a permit or permits for the drilling of anywells orwells for oil or gas nearer thannine hundred thirty-three (933) feet to any well completed in or drilling tc the samehorieon on the same tract or farm, and nearer than three hundred thirty (330) feet to any property line, lease line or subdivisionline as hereinbeforeprescribedwhenever the Commission shall determine that the drilling oP any such well or wells is necessary to prevent waste or to prevent the confiscationof proper@. When in the opinion or judgment of the Conmissionwaste or confiscationof property is reasonabl;r imminent or is taking place on any leasehold, the Commissionmay, on its own initiative or motion, order a hearing for the purpose of determiningwhether suchwaste or confiscation of property is taking place. Such permit or permits shallbe issued or granted only after at least ten (10) days' notice to the owners of said leasehold and to -11a4jaoentlessees affected thereby has been given, and after public hearing atwhich all interestedpartiesmay appear and be heard and after the Conmissionhas determined that the drilling,-

Ron. Olin Culberson,page 3 (O-7068)

of snywell orwells for oil or gas is necessary either to preventwaste or to protect the 

### cnmersof said leaseholdfrom confiscation. "SECTION(C). In filing BERM 1 as hereinabove provided ,itshallnot be neoessary to file more than one plat.
"SECTION ,D). In the interest of protecting life, andfor the purpose of preventingwaste and preventing the oonfiscationof property, the Connnission reserves the right in particular oil and gas fields .toenter special orders increasing or decreasing theminimum distanoes providedby this rule.
"SECTION (E). Nowell' drilled in violation of this rule without special permit obtained, issued or granted in the manner presoribed in said rule, and no well drilled under suoh speoialpermit or on the Cons&&on's own order which does not oonfonn in all respects tothe terms of suah permit shall be permitted to produce either oil or gas, and aqy suchwell so drilled inviolation of said rule, or on the Commission*sown order shall be plugged.
"SECTION (F). This rule shall in no wise^resaind, abrogate or modify the provisions of special orders applicableto the spacing ofwells in partioular fields requiringminWnn spacingdistanoes either greater or smaller than providedherein.
"SECTION (G). This rule shall become effectiveFebruary 18, 1943, and so remain until changedby order of the Ccmnnission.
"In the adoption and promulgation of this order, it is here deolared that the Commission intends to adopt eaoh phrase, sentence and paragraph separately and independentlyof each other such phrase, sentenceand paragraph and if any portion of this order or alrg portion of the rule hereby adopted shall be declared invalid, such declaration and suoh invalidity shallnot affeot any other portion."

w special order datedMay 29, 1934, known as the "subdivision rule," the Railroad Commission provided*
"IT IS ORDERED 7 lheRailroad Commission of Texas, That in applyingRule 37 (SpacingRule of Statewide applicationand in applying every special rulewith relation to spacing in every field in this State, no subdivision of propertymade subsequent to the adoption of the original spaoing rule will be oonsidered in determiningwhether or not any property is being confiscatedwithin the terms of such spacing rule, and no subdivision of propertywill be regarded in applying such spicing rule or in determining the matter of oonfiscation if such subdivision took place subsequent to the promulgation efld

adoption oftie original spaoing rule.
"IT IS SO ORDERRD, This the 29th day of&y, Ad. 1934."

It is observed from a carefuf reading of Rule 37 that there is no express provision in the rulewhich would limit its operation to oil fieldsZen. Olin Culberson, page 4 (o-7068)

or proven territory. It is obvious that if the rule is not so limited, then by its very terms and provisions, awons desiring to drill a well for oil or gas anywhere in the State of Texas must complywith the rule, and if the proposed looation of the well is nearer than 350 feet of am property line, lease line, or subdivisionline, then suchwsll may be drilled under onsof the exoeptions to the rules By its terms the Commissionhas stated that such an exomptionwill be granted only after notiae and hearing. The notice provision of the rule is in oomplianbewith Art. 6036a,Vernon'sAnnotated Civil Statutes, and is mandatory.Rabbit Creek Oil Company vs. Shell Petroleum Corporation, 66 S. E. (2d) 737; Sun Oil Companyvs. Railroad Comnission, 68 S.W. (2d) 609, reversed on other grounds, 126 Tex. 269, 84 

### 8.W. (2d) 693; Gulf Land Company VS. Atlantic Refining Company, 134 Tex. 59, 131 

### S.W. (2d) 73.

The view that the rule has no application to unproven territory seems to have orieinated in the eqressions of Assooiate Juetioe Blair of the 3rd Court of CivilAppeals. In his opinion in the Rabbit Creek Oil Compaw case, supra,page 739, he states:

"Exceptionsare only neeeasary after the particular field has been proved.
. . .s (Emphasisours)
The foregoing expression in the Rabbit Creek Oil Company ease, however, in the opinion of this Beparhaent, ismerely diotum not necessary to a decision of the Case. This for the reason that the applioation in that ease was for an exception in the East Texas Oil Field after its disaovery, and the case dealswith thematter of goving notioe to interestedparties of hearings held on such-exceptions. It holds that the issuanoe of a pensit tithout notice and hearing is invalid.

Again, in Er. Justice Blair'sdissenting opinion insthe case of Sun Oil CompanyVS. Railroad Commission, 68 

### S.W. (2d) 609, 614-622, the following expressions are founds
"In each oil and gas circularpromulgatedbythe oonrmission since theabove amendment in March, 1923, rule 37 has been designatedas a 'general rule," althoueh it has always exemptedproven salt dome fielda and'-has always been ~. 't. eonstruedby the oonsni&sion as having no.appliontion to' - unproven orwildoat fields.

. . ." (Emphasis

### ours) "Sinoe'this is true. and sinoe saoh rules neoessarilyvary in different oil fields, and sinoe they are subject to frequentvariations and ohange at aq time end have no application to 'unprovenfields,* the rules in foroe at the time the oil is souaht to be produoed shouldbe aupliei I:and the aommission has always so construedand applied its spaoing rules and regulations. The oommissionhas never assumed the power or authority to deprive any owner of his oil and gas estate in land by any spacing rule for oil wells, Eaoh such rule has from its inceptionand as a part of it provided for an exaep tion 'toprotectvested rights.'" (Emphasis

### ours). -

Hon. Olin Culberson, page 5 (o-7068)

**“ If**  **the majoritg**  **view is**  **correct,** and 5-f appellees in these suitswere required to take cogniarance of and contraotwith **reference** to rule 37 as promulgated in 1919, thenthey would be compelled to ascertainwhether their landswere locab ed in an unproven oil field, orwhether, if in an oil field, itwas a 'salt dome field,' because in either instance rule 37 would have no applicationunder its own terms and the oonstrcotionuniformly given it. But, nokithst&&ing the rule has no application to unproven fields, or salt dome fields,nor the faot that no oil field RYM in prospeat or had been though of where the lands of appelles are situateduntil long after rule 3'7 was adopted, still themajorityview requires that they or that 'allparties leasing land subsequent tc its promulgation

. . .must contractwith reference to this settled rule.'
. o .I1

These expressions of Mr. Justiae Blairare found in a dissenting. opinionand do not refleot the viem of themajority. The holding of themajoritywas that the lease of a 2.59 acre portion of a much large traat of land, capable of development in compliancewith the spacing rule.maa an unlawful subdivision in derogation of the spaoing rule. The 2.59 awe traotwas held not entitled toconsideration as a traot separate and apart frcmthe larger tract frcmwhioh it was divided.

The dicta of Mr. Justioe Blair expressed in the Rabbit Creek ease and in the Sun Oil Company ease seem to have orystallised in his holding in Shell Petroleum CorporationVS. Railroad Ccnm&ssion, 116 S.W. (2d) 439,writ dismissed. In his opinion in that oaee, the broad statement is made that: "Neither rule 37 of the so-called state-wideapplication as promulgatedby the Railroad Commission in 1919, nor 8~ amendment thereto,nor any special rule 37 has a~ applioation to territorynot known nor antioipated to be productive of oil or gas; and the rule inhibitingvoluntary subdivisionof landswhich could have been developed as a whole in order to ciroumvent the provisions of rule 37 has no application to subdivisionsof lands prior to the discowry of oil and gas in the terr%tarywhere the lands are located.
. . . "TheRailroad Ccmnissionhas oontinueusly interpretedrule 37 as having no applioation to unproved territory. It did promulgatean order inRay, 1934,wherein it is prcvided that no subdivisionof lands after the so-called state-wide rule 37was prcmulgated in 1919would be considered in determiningwhether or not urncerty is being 'confiscated*within themeaning of **that t.nn**  **as used**  **in the**  spacing rule. Whatever constructionmay be plaaed upon this order as applying to subdivisionsafter 1919, it is operative only as to oil fields that have been discoveredprior to the time of +be subdivision,because in 1932 the Legislature enacted a statite, declaratory or expository in its nature,whiah provided in effect that the Railroad Commission is without authority or power to restrict or in aqy manner 1Mt the drilling of wells for the purpose of exploring for oil or gas in territorynot known to produce either oil or gas. Chapter 2, section 2,Ahats1932, 42nd Leg., 4th c.S. p. 3, and wended in other partioularsby Acts 1935, 44th Leg., oh. 76, section 3, p. 180, Vernon's Am. Civ. St. art. 6014a. So it is immaterialwhether this act be regarded as expository, expressangthe view of the Legislature that the commissionhas never had the power or authority to restrictthe drilling of wells in terri++ery- .

Hon. Olin Culverson,page 6 (o-7068)

not kncmn to produce oil and gas3 or whether the aot be considered as of that timewithdrawing from the Railroad Ccnmxission the pcwer to apply a spacing rule regulatingaella **in** a fvritory not tican or anticipated to be productive of either oil or gas3 bemause uuder eitherview, the ocemnissicn iswithout authority to restriatwells for ail or gas in territorynot kucwn to be productive of oil or gas."

Takenat faoevalue, this statementmuld seem tobe a dire& enswer toyour first question. It is not heli~ed, however, that the court intended to announce an interpretationof Rule 37 so far reaohing. On m&ion for rehearing in this case,F&. Justioe Raugh stated: "Thewriter concurs in the disposition of thi8 appe&lmade in the original opinion herein by Associate Justioe BLAIR; and in his conelusion that thevoluntary subdivisionrule originally announcedby this court in Deomnber, 1933, and January, 1934 (see the several rule 37 ease8 reported in68 S&'2d 609-628, supra), shouldnot and does not apply to inatrnoeswhere one in good faith acquires fee title to land in unproven territorg~and suoh aoqnisitionwas not in contemplation of oil d-?WelopmeBt.Hcmever, the writer does not acnstrus the prcvisionr of chapter 2, section 2, Acts 1932, 4th Cd. 42Bd Leg., as amendedby Acts 1935, 44th Leg., c. 76, g 3, VerBoB*sAnn. Civ~ St. art. 6014a, as limiting or governing the rules and regulationacf the Railroad Cemnissio~ in itu administration of the conservation lam. I awour in the oonstmiot;lon of these acts given %y Chief JustioeMoLendon, in R& 8670, TI P. rash et alslv. Shell Petroleum Corporation et al., Tex. GiveApp., SoWe 2d -, this day decided. I deem it advisable to nake this stct that theremey he ac misapprehension about the respective views of ttfie differentmembers of this court."
It mill be noted thatMr. Justioe Eangh limited his hciding (that the rule does not apply to unproven territory) to inataneas

### where one in good faith aoquires fee simple tc land in unprcvemterritory and suoh acquisition is not in **contemp~tiOB** of oil development* He fui+lmr h&lb that Art. 6014a, Vernon'sAm. Civ. Stat., referred ta by Rr. Justice Raugh, isnot to be interpreted as limiting the Railroad Colmaission in its applioation of the spaoing rule. The views of Chief JustiaeM&lend-, also sittingon the 3rd Court of CivilAppeals at that ime, are given in the eaee of Nash VS. Shell Petroleum Ccrporation,127 S.H. t; 2d) 522,writ dismissed. His holding is limited to thevoluntary subdivision-rule. It is thatnhere title to a tract of land is segregatedby deed conveyingfee simple title on Rcvember 14, 1929, 

### abouta year before the discovery of oil in the East Terrs Field, such land is not with&n the subdivision rule and an applicant isW&itled as a matte r of law to drill onewell on the tract. Chief JusticeMcClendon further held thathe did not cocur in tieholding ofMr. Justioe Rlair in Shell Petroleum CorporationVS. Railroad Commission, supra, that Art. 6014a deprived the Ccumdssion of the power to apply rule 37 to other than proven territory.Hon. Olin Culberson,page 7 (O-7068)

Another ease decided by the 3rd Court of CivilAppeals is also pertinent toyour f'rst question.

# In Shell Petroleum Corporationvs. Railroad Commission, 133 6.

. (2d) 194,write refused,Mr. Justioe Ibgh held that where lands are leased expressly for the purpose of oil development,Rule 37 and the subdivision rule are appliaable to such lands, notwithstanding that the area involved is not proven territory. He said:

s. . . lbtwhere lands are leased expresslyfor the purpose of oil developent, an entirelv different situation is Dresented. In the latter instance.whether the lease -kein proven territoryor-not, the~oonservationlaws bsacmeWa~ ble tothe subsequentdeveloment thereof;and the rights ofthe parties become referable to the 

### rubs and regulations

### of the Conmission governing the development of the urowrtv which the lessor himself contemnlatedandwhhiohhe reauiied



### ** - of the lessee. Nash v. Shell Pet. Corp., supra. 

### Wier these oiroumstanoe;, application of the provisions

### of the rule, as a conservationmsa*ure, is asesssntial in a given area before the disaovery of oil as it would bs after such disoov6ry.s (Emphasisours)

Further illustrating the 

### 314Courtof Civil

### Appeals'interpretationof the sukdivision rule is the following: *

. . . III

oonsequenee,puestlon '1'must be answered in the negative under the severaldeoisions holding t

II.2d 439. error dismissedx Rashv. Shell Pet. Corp., Tex. Civ.App.. 120 S.H. 522, error dismissed; Shell Pet. Cor P.v. Railroad‘C&ission, T&i Civ.App., 120 S.H. 2d 526, error dismissed." Emphasis ours)

(Wenolcer

vs. Railroad C&&sion of Texas, 149 S.H. (2d) 1009) The attention of the Commission is invited to the statement in each of Judge Blair's opinions to the effect that "theRailroad Cammissionhas oontinuously interpretedrule 37 as having no application to unproven territory." Long standing administrative interpretationof rules and regulations is persuasive in passing upon the intent of the regulatorybody. Ws have not been advisedby the Conmissionas to the aoeuracy of such expresssions,and note the statement in your letter to the effect that, "The polioy of the Commissionhas always been to set down for hearing any notice of intention to drill a wildcat well whioh is nearer than 330 feet to the properly or lease line as an exception to Rule 37, which is the spacing rule." All of Judge Blair's expressionsare found in his opinionsprior to the opinion of the majority of tha Court in Shell Petroleum CorporationVS. Railroad Consaission, 133 S.H. (2d) 194, which opinionwas approved by the Supreme Court by its refusal of a writ of error. The holding in the Shell cmee is clear, and we thereforeassume that the Consaission has had no such administrative interpretationof F&&e 37 since the date of the Shell opinion, hbvmber, 1939.Hen. Olin Culberson,Page 5 (O-7068)

It is believed that the praatieal effeot of these holdingsmay be stated a8 follows: (1) that ths vekntarg division rule does not apply to the oonveyanoe of lend by fee transfer ooourring prior to ,*e disowery of oil, when not nude in contemplationof oil development: (a) thatwhen an interest in the subsurfaceestate in land is conveyedby 

### leaseor othermeans oontsmplative of oil development,whether the oonveyaxxoe %e in ~reven territoryor not, the aonservation law8, inoludingRule 57 and the suWivi+sionrule, become applioable to the subsequentdeveloIssent of'the land. Therefore, in 

### answerto your first quo&ion, me hold 

### andyou are advised, that a lessee under an oil and gae leaeemay a& 

### undertake to drill a weI1 on a tract of land not susoeptible of deveeat in keeping nit% the spaoiag distanoesreoited in statewideRule p7 without first applying to the Con&s&on for a permit under an exoeption to Rule 37 and having notioe issue and hearing held as therein provided. libhoId thie to bs true notwithstandingthe evidence adduced at the hearingmay show that such le8ree is entitled to drill suchwell as a matter of right. This for the reaaoa that the Legislaturehas designated the Railroad Cwmission as the body whose duw~it is-primarilyto determine suoh faots. Gulf Land CompanyVS. Atlantio Refining Company, 134 Ten. 59, 131 S.11; (2d) 7%
It is believed that the answer to your second question,whether the Commissionmay requiremore then the filing of a notiee ef intention to drill in an area that does not yet have production, is to some extent, at least, emIn-aoed *i&in our an*wer to your first question.

Railroad Cmmuis8ionRule Roe 9 presently in foree and effeot reads as follow§: "(a)NOTICE OF INTENTION TO DRILL OR DEEPEB. Rotioe shallbegiven to the Railroad Commission of the state of Tezmns of the intention to drill 

### ordeepen any oil or gas ~11 and of the exaot location of each andevery 

### suohwell. Suoh notioe shall be given by filing in duplioateFans 1 of the Connsission, attaahed hereto end made a part hereofwith the Deputy Supervisor of the Railroad Consmission in the Consaission

Districtwhere thewell orwells are looated. The location of any wildoatwell shall be given by specifying the distsnoe of same from at least two (2) of the lines of the surveywithin which it is to ‘be drilled. In no oase shall drilling operationsbe commenceduntil the expiration of at least five (5)days after the filing of Form 1 hereinabratmentioned. Ro permit to drill ary well orwells for oil or gas shall be requiredby the Cosssission except for such wells as may be drilled under exoeptions to Rule 57 of statewideapplication or as-exceptionsunder specialfield rules governing the drilling of anywell or wells which have been or may hereafterbe @opted %y the Railroad Cummission.
*It is further ordered that all notioes of intention to drill or deepen aqy well or wells under and as exceptionsto Rule 37 of statewide application, or speoial rules governing the drilling of anywell or aells in ary partioular oil field, or under any amendments thereto, shallbe filedem Form 1, hereby adopted as a part of this order, with the Deputy Supervisor of the Railroad Colmnission in the ConmxLssion districtwhere thewell orwells ars located.,4

Hon. Olin Culherson,page 9 (o-7068)

ePrwided further that it shall not be necessary to file more than one plat or sketah as provided for in Form 1 hereinahwe mentioned, and adopted by the cornmission."
B :addition t0 ':he notice of intentionto drill required by rule g, there 

### aremaqy other rules and regulations that have been establishedv the Railroad CosmuLssion of statewide applicationthat are intended to govern drilling operations in the event no speoial rules for a partioular area have been promulgated. We have examinedmany of these rules and regulations a& find in 

### noneof them an exception limiting their operations to proven territory. ParaphrasingMr. Justice Saugh in Shell Petroleumvs. Railroad Commission, supra, itwould seem tc be just as important from 

### a conservation standpointthat these 

### rulesbe applied in a given area before the discovery of oil 

### as itwould be after such discovery. The interests of the State to be subserved, the prevention of fire hasards,the proteation of underground strata and the surface of land from percolatingwaters, and the proteotion of adjoiningproprty owners,would seem to be the same. It is just as~important so far as the oonservationpolioies of the State ars oonoerned that its conservationPaivs and rules and regulationsof the Railroad Commissionbe applied to the first or wildcat operations in a field as to subsequent operations after the field has bean proved. We interpretyour second question, therefore,as askingwhether or not the Railroad Consnission has been delegated authority bythe Legislature tomake such regulations.effectivein tildaa& areas. The only limitation imposedby the Legislaturewe have found is that contained inArt. 6014a ofVernon'sAnn. Civ. Stat. readingas follows: "Rothing in thisAct shallbe construed as granting to the Comnissionaqy power or authority to restrict, or in any manner limit the drilling ofwells for the purpose of exploringfor arude petroleum oil or naturalgas or both in territory not known to produce either suoh oil or gas."

The act referred to in the foregoing quotation is Chapter 2 of the Acts 42nd Leg., 4th C.S. pages 3-10. That actwas a very comprehensiveone amending several of the artioles appearing in Title 102 >fthe Revised Civil Statutes of Texas, 1925, conferringbroad authority upon the Railroad Conmission in thematter of regulating the production, storage, end transportationof oil and gas. Two of the articles amended by the act of the 42nd Legislaturewere Articles 6014 and 6829, the former definingwhat shall constitute "waste," and the latter speoifying the duty of the Railroad Commission to make and enforce rules, regulations, and ordersfor the oonsnrvationof oil and gas for a number of stated purposes.

As stated in answer toyour first question, a majority of the present Court of CivilAppeals has held that the limitation contained inArt. 6014ahas no application to the Railroad Conmission Rule 37, the Court stating:
"The purpose of this amendmentwas clearly to deny the Corsnission power to prevent or restrict oil development in unproven territory. The spacing rule is not in any proper sense a prevention or restriotionupon drill! *agedin oil 

### a. It is merely one of a number of regulations towhich all ene developmentmust conform. To apply the amendment to the spacing rulewould make it possibleby dividing up leases **into** small tracts in advance of drilling to circumvent the rule entirely. -

Hon. Olin Cul.berson,page 10 (O-7069)

in subsequentlyproven **territory.** It IS not lmliemd that the amendmentmapifests any such~

legislative intent.' lQssh7.vb+~On&rW.en, fZ0: S.W, (2d) 522&mS:dimissed) (Gphasis am)

& even more limited Interpretationof &t. 60148 is contained in the opinion of Mr. Justioe Baugh in Shell Petrolti CorporationVII.Railroad Comniesion, 116 S.W. (2d) 439, 441, wherein he statesa



### R

. . . (Fbphasis

### ours)

In answer tu your seaond question, in vimf ofArt. 6014a,we advise you that if a partioular rule of statewideapplic8tioa dees not have ihe effeot of preventing or unreasonablyrestrioting drilling,eper&ic%w interritorg not known to produce either 011 or w, tthw suak rule or ngnlat%ao'applles to such territory even in unproven territoryunlbss,~‘bg i%e terms and prwlaiins,:.it is clear that the Railroad Comuissioahad a oontnary inteab
Tours very truly
ATTORUEY aExEF& OF TJsxhs

APPROVED F'EB6, 1946 /s/ CarlosAshley FIRSTASSISTART A ATTORNFX GEMERAL

JDS:jtregw &y/8/ JPme# D. Smuller!
James D.~Smullen Aaeistanf