Court Opinion

ID: 5010509
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:43:13.625583+00
Date Added: 2024-06-11T08:16:45.448832
License: Public Domain

BLAIR, Justice.
I again dissent from the majority view in this, a Rule 37 case. The majority view in the instant case is based upon the construction of special Rule 37 applicable to the East Texas oil field as containing two implied findings of fact by the Railroad Commission.
The first implied finding imposed upon the Rule by the majority is that a well will, under ordinary conditions, drain oil 330 feet from its bore. Manifestly, the Rule *642makes no such finding,' either expressly or impliedly; such finding, however, is necessary to the majority opinion, because otherwise the appellee'who contested the permit would have been compelled to prove how the well injured it. The majority view supplies this proof for it by holding that, “under the Commission’s own spacings of 330-660 feet, which imply a finding that a well will, under ordinary conditions, drain oil 330 feet from its bore, it is manifest that the well in question was within drainage distance of appellee’s lease both to the west and to the north.” Such holding is in direct conflict with the cases of Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73, and Railroad Commission v. Magnolia Petroleum Co., 130 Tex. 484, 109 S.W.2d 967, wherein it is held that the fixing of the spacing distances is not a finding either way as to waste, but that it is a spacing pattern for the orderly development of a field without having to obtain a permit to drill an oil well, except to drill at lesser distances than stated' in the Rule.
The second implied finding which the majority attribute to the Rule is that the “presumption must be indulged that closer drilling, as a general rule, will tend to cause, rather than to prevent, waste. Such has been the consistent holding of the majority of this court since this question was fully considered in Rule 37 cases reported in Sun Oil Co. v. Railroad Comm., Tex. Civ.App., 68 S.W.2d 609; Humble Oil & Refining Co. v. Railroad Comm., Tex. Civ.App., 68 S.W.2d.622; Id., Tex.Civ. App., 68 S.W.2d 625.”
This is the first time that, the majority have frankly admitted that such construction of the Rule is their own. That construction was rejected in both the Gulf Land Company and the Magnolia or Century cases, supra, and other cases, and need not be further discussed here. My opinion regarding such construction is fully set forth in the recent dissenting opinion in the case of Railroad Commission of Texas v. Shell Oil Company, Tex.Civ. App., 154 S.W.2d 507.
By holding that the Rule is an implied finding that wells will drain oil for a distance of 330 feet from the bore, makes it easy for any litigant who cannot show an injury otherwise from the drilling of a well, to come into court and set aside the order of the Commission by merely introducing the Rule in evidence. That is the holding of the majority. Such holding effectively destroys the Commission and its administration of Rule 37. The ap-pellee in the instant cáse simply introduced this Rule, a few maps showing the density in the area of the well, and placed on the stand a witness, who stated that this was the only documentary evidence introduced before the Commission; thereafter, the trial court struck down the permit granted by the Railroad Commission, after notice and hearing. The majority holding is that this overcame the prima facie validity given by statute and law to the order of the Railroad Commission. If such can be done, why have a Railroad Commission to administer the conservation laws of Texas. This simply continues the fight that the majority has made against the Commission as to its administrative policies since the early cases reported in Sun Oil Co. v. Railroad Comm., Tex.Civ.App., 68 S.W.2d 609; Humble Oil & Refining Co., v. Railroad Comm., Tex.Civ.App., 68 S.W.2d 622; Id., Tex.Civ.App., 68 S.W.2d 625, cited by the majority as supporting their continued interpretation of the Rule, and which has been rejected by all courts except the majority view'.
Considering, however, the evidence introduced by the appellee, itself, in the trial of this case, and upon which it obtained an order of the district court striking down the permit, it clearly shows substantial evidence to support the Commission’s order in granting this well, under the previous decisions of the writer of the majority view in this and in other cases.
In the case of Humble Oil & Refining Co. v. Railroad .Commission, 99 S.W.2d 401, 402, this court, speaking through Mr. Justice Baugh, state: “We think the Railroad Commission and the. trial court were authorized, with the maps before them showing the number and location of wells, to draw their own factual conclusions as to drainage and were not conclusively bound by the expert opinion of the employee of the appellant as to such drainage.”
And in Shell Oil Company, Inc., v. Railroad Commission, Tex.Civ.App., 133 S.W. 2d 791, 792, Mr. Justice Baugh, again speaking for this court, held that density maps showing eight times area surrounding a given tract are frequently resorted to in determining the issue of drainage or confiscation in determining whether the leaseholder has had a fair opportunity to recover his share of oil beneath his tract, *643“but it manifestly cannot be taken as a conclusive criterion.” And it was further pointed out the reasons why such basis of comparison could not be adopted as a conclusive criterion.
One such reason is entirely applicable in the instant case, where it is shown that small tracts within the eight times area and within drainage distance, have more wells per acre than do the adjoining tracts. This is shown by the exhibits introduced by the appellee, itself; 'from which it appears that the Overton Refining Company’s Amanda Green estate lease consisting of four acres has two wells as indicated thereon, further that this lease of four acres immediately joins the Cook Amanda Green lease on the west, and that said lease is drilled to a density in excess of two times as great as that of the applicant’s tract. Again examining the McKinney and McKinney lease, which is an adjoining lease to the Cook Drilling Company Amanda Green lease and to the west thereof, being just north of the Overton Refining Company lease, is found a ten-acre tract with three wells thereon having a density of one well to 3.33 acres, said tract being drilled to a density considerably greater than the applicant’s tract. Both of these leases and the wells drilled thereon exert a drainage influence upon the applicant’s tract, and under the rule of law laid down in the Kingwood case should properly be considered as constituting wells that are draining oil therefrom.
Appellee also introduced Exhibit A, in which he gave the various leases surrounding appellant’s lease, the acreage, and the allowable barrels of oil per acre. This shows that the leases within an eight times area had an allowable of 4.14 barrels; whereas, the lessee in question, even if granted the right to drill the well under the permit, had slightly less than one well to 4.09 acres. But these were clearly matters which the Railroad Commission, itself, must determine, and a court cannot substitute itself for the Commission. If the Commission is required to go into detail in the hearing of the applications to drill wells as exceptions to the Rule, which the majority suggest, it would be rendered wholly ineffective because it could not hear even a small portion of the applications presented to it. The Commission under the law must supervise the drilling .of every well, whether granted under special exception or drilled without exception, from the time it is started until it is finished; and it then fixes the allowable; it continuously makes bottom hole tests under its continuous supervision; it knows the condition and nature of the field and area wherein the permit is sought; it knows the general condition of the field, its average density, porosity, permeability, . and viscosity of the sand; it knows the condition of the water -and the reservoir pressure; and in granting a permit to drill an exception it must be' presumed that the Commission took all such matters into consideration when it granted the permit. No other rule could be established without doing such injury to the administrative power of the Railroad Commission as to render it nugatory.
I must again respectfully dissent from the majority view of this case.