Opinion ID: 1091804
Heading Depth: 2
Heading Rank: 1

Heading: The maximum efficient daily rate of production of said pool shall be determined and fixed by the Board, which shall be such pool's daily allowable production.

Text: B. The daily allowable of said pool shall be allocated as follows: To each individual drilling unit, there shall be allocated that proportionate part of the pool's daily allowable that the surface acreage content of such individual drilling unit bears to the total surface acreage contained within all individual drilling units plus the total surface acreage contained within the fieldwide unit. The remainder of the daily allowable shall be allocated to the fieldwide unit. C. Any unit which is not capable of producing without committing waste, the allowable assigned to it under Rule 2 (B) shall be considered as a deficient unit. The difference between the allowable assigned to a deficient unit and that which it is capable of producing without waste shall be distributed by the Board to the nondeficient units on the surface-acreage basis of apportionment prescribed in said Rule 2 (B). D. The allowable production of the fieldwide unit may be produced by any well or wells on said unit provided, however, that no well shall be operated in such manner as to cause waste as defined by the Laws of Mississippi and no fieldwide unit wells directly or diagonally offsetting individual drilling units shall be allowed to produce more than twice the daily allowable assigned to non-deficient individual drilling units. It appears from the record that the argument of the appellants here is similar to the contention of the appellants in Corley v. Miss. State Oil & Gas Board, 234 Miss. 199, 105 So.2d 633, wherein this Court said: Clearly the Board had the power to define the zero isopach line of the pool, and pointed out that the Board carefully adhered to the statutory requirements of allocation by surface acreage, and that the reduction in allowable per surface acre and the redefining of the field or the aerial extent of the pool were within the Board's statutory power. The Court then said: Reading the conservation objectives of the Act together with the powers vested in the Board, and considering them in the light of the evidence in this case, we do not think it would be fair or equitable to permit a very small minority of small fractional owners in this common source of supply of hydrocarbons to prevent the Board and the overwhelming majority of the operating and royalty owners from pursuing a unitization program designed to obtain a maximum recovery from the field. (Hn 2) In the instant case, we agree with the Board, upon the facts here presented, because we do not believe it would be fair to the owners and parties of interest, at whose expense a secondary recovery has been made possible, for the Board to multiply the production of appellants who have taken no part in making it possible to obtain the secondary recovery. The testimony here offered by appellants on the proposed amendment to Rule 2 in its final analysis simply means that the production in the Barnwell tracts would be increased six or seven times and the allowable production of the fieldwide unit would be reduced proportionately. (Hn 3) We have come to the conclusion, from a careful study of the record in this case, that the order of the Board dismissing the petition was correct for the following reasons: The burden of proof was upon the appellants to establish its charge that a change had developed in the maximum efficiency rate of production since the order of the Board fixed the daily allowable, to such an extent as to warrant the Board to amend Rule 2, Allocation of Production, to prevent waste. The burden of proof was upon the appellants, who asserted the affirmative on the issue presented before the Board. 42 Am. Jur., Public Administrative Law, §§ 131, 132, pp. 466-467; 73 C.J.S., Public Administrative Bodies and Procedure, § 124, p. 444. Cf. Miss. Oil & Gas Board v. Superior Oil Co., 202 Miss. 139, 32 So.2d 200. (Hn 4) It is said in 2 Am.Jur.2d, Administrative Law, § 391, pp. 197, 198: It is generally held that the proper allocation of the burden of proof is among the essential rules of evidence which must be observed in adjudications by administrative agencies. As in court proceedings, the burden of proof, apart from statute, is on the party asserting the affirmative of an issue before an administrative tribunal. This is usually the claimant, complainant, or applicant, but the party resisting a claim may have the burden of proving a bar to such claim, such as a statutory exception, and, while the burden of proof never shifts, the burden of proceeding with the presentation of evidence does shift. Moreover, the findings of an administrative agency are prima facie correct, and the reviewing court may not substitute its judgment for that of the administrative agency where there is a substantial basis in the evidence for such finding. Miss. Public Service Commission v. I.C.R.R. Company, 235 Miss. 46, 108 So.2d 573; Illinois Central R. Company v. Jackson Ready-Mix Concrete, 243 Miss. 72, 137 So.2d 542; The Ohio Oil Company v. Porter, 225 Miss. 55, 82 So.2d 636; Cobb Bros. Const. Co., Inc. v. Gulf, Mobile & Ohio R. Co., 213 Miss. 706, 57 So.2d 570; West Brothers, Inc. v. Illinois Central R. Co., 222 Miss. 335, 75 So.2d 723. (Hn 5) The testimony introduced in the instant case does not establish that there had been any material change in the maximum efficiency rate of production which was not known or anticipated at the time the original Field Rule No. 2 was adopted. The testimony here attempts to show that the original method of calculating or determining the allowable is not in fact as efficient as the type or method proposed by the appellants, particularly so that an allowable may be set up for an individual well. (Hn 6) We are of the opinion that the Board was not in error in rejecting the new method offered by appellants for determining a well allowable, because the proposed amendment is not in accord with the surface acreage method set out in Mississippi Conservation Laws, especially Par. (d). Section 6132-21, Miss. Code 1942, Rec., is as follows: Except where otherwise provided, any allocation or apportionment of production shall be made on the basis of and in proportion to the surface acreage content of the drilling units prescribed for the producing horizons for the pools so that each such prescribed unit shall have equal opportunity to produce the same daily allowable, and any special unit of less than the prescribed amount of surface acreage shall be allowed to produce only in the proportion that the surface acreage content of any such special unit bears to the surface acreage content of the regular prescribed unit; provided, however, that in the event any well in attempting to make its allowable should be operated in a way that would commit waste as herein defined, or to the detriment of the field as a whole, the allowable for any such well shall be subject to adjustment. (Hn 7) This Court has said that the Legislature has fixed under the above statute surface acreage as the basis for apportionment of production in each unit. Humble Oil & Refining Company v. Welborn, 216 Miss. 180, 62 So.2d 211. The allocation or apportionment of production made on the basis of, and in proportion to, the surface acreage content of the drilling unit is the only method authorized by the Legislature, and the authority to so do rests with the State. California Company v. Britt, 247 Miss. 718, 154 So.2d 144.