Opinion ID: 1507513
Heading Depth: 1
Heading Rank: 2

Heading: Evidence Adduced after Date of Commission's Order

Text: Appellants Pickens et al. contend that the trial court erred in admitting evidence of tests made, or other evidence discovered, after the date of the Commission's proration order. They cite the familiar rule that the Commission's order is to be tested by the conditions as they existed at the time the Commission acted. Magnolia Pet. Co. v. New Process Production Company, 129 Tex. 617, 104 S.W.2d 1106 (1937); Railroad Commission of Texas v. Magnolia Pet. Co., 130 Tex. 484, 109 S.W.2d 967 (1937); Cook Drilling Co. v. Gulf Oil Corp., 139 Tex. 80, 161 S.W.2d 1035 (1942). The order in question was promulgated on March 6, 1963. Intervenor Hunt Oil Company, an appellee, tendered its Exhibit #1 which was based on reservoir conditions to August 28, 1963. It was a structural isopach map, On Top of James [Lime] Porosity, and showed the portion of the field underlain by water. Exhibit #1 of Cities Service Oil Company was also an isopach map on top of the Fairway (James Lime) Field to show the area of the field underlain by water and the aquifer around the field. This exhibit was based on a map made in 1961 but which had been brought up to date down to August 1963. Hunt's Exhibits #2 and #3, objected to for the same reason, showed, down to August and November 1963, respectively, the cumulative oil production and the water cut-percentage (percentage of water produced per thousand barrels of oil) in particular wells. Part of the testimony of the witnesses Dixon, Latimer, and Kelly was based on these exhibits. There were other exhibits similarly objected to. It was stipulated during the trial that all geological or engineering data    offered by any expert witness shall not be objected to on the ground of hearsay evidence, or on the ground that it was not properly authenticated. Objection could be made on the grounds of materiality or relevancy. Appellants took the position that evidence of conditions, or evidence obtained, after March 3, 1963, was irrelevant and immaterial. The trial court admitted the first of these exhibits with the following ruling: I will overrule the objection [of counsel for Pickens et al.] with the following qualification: That I will only consider it if it shows anything that was in existence, or tends to show anything that was in existence, at the time of the order of the Commission, whether it was discovered later, or platted later, studied later, or the results showed later.    Now that may be a little complicated, but I felt that I must qualify it to that extent. The limitation in so far as information obtained, experiments and results of experiments made since the Railroad Commission order, is admissible in so far as it might show, or tend to show, what was actually in existence, or conditions in existence at the time of the Railroad Commission order, whether they were then known or not. There was substantially this same ruling on the admissibility of other evidence of the same nature. The trial court's ruling was correct. Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681 at 700 (1941). Many of the basic conditions which were geologically in existence in the oil field at the time the Commission acted may have existed for a million years; and the fact that they were discovered, or evidence of the condition was adduced, after the Commission's order would not render the evidence inadmissible. It is, of course, possible for conditions to change within the field; and it would not be entirely fair to the Commission to judge its orders by conditions which have changed since its order. Here, however, the trial court admitted the geological evidence which showed, or which tended to show, what the conditions were as of the time of the order, and what the Commission might reasonably have anticipated to occur as a result of those conditions. While no particular point has been made of it in our opinions, this Court has considered geologic evidence which was adduced or discovered after the entry of the Commission's order. In Railroad Commission v. Manziel, supra, for example, the order was dated August 15, 1960. This Court's opinion sets out the results of tests made thereafter on September 1, 1961. See 361 S.W.2d at 573. Similarly in the Port Acres case, the order was dated August 18, 1958. The Commission refused to reconsider the order on July 6, 1959. This Court in its opinion refers to evidence as to uncompensated drainage as of April 1, 1960 (357 S.W.2d at 371), and of tests made in October 1960 as to comparative production among wells (See 357 S.W.2d at 372, Footnote 1). As reflected by the majority and dissenting opinions in the Normanna case, the Bright & Schiff well which was under attack had not even been drilled, or the permit for its drilling issued, at the time the Commission issued its proration order for the field. [7] Yet the validity of the Commission's field-wide proration order turned in part on what that particular well would produce in the future compared to the inplace reserves which its lease was supposed to have. In all of these proration cases, the Court has considered this type of evidence for its value in showing, or tending to show, what the conditions were when the Commission acted, and how they might reasonably be expected to develop in the future, even though the tests to verify, vel non, the existence of those conditions may have been conducted at some later date. In passing, it is noted that the tests here were made within a relatively brief time after the Commission's order.