Court Opinion

ID: 4142733
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:25:22.224435+00
Date Added: 2024-06-11T14:37:57.120774
License: Public Domain

$38

          OFFICE OF THE ATTORNEY GENERAL           OF 7EXAS
                                                      '..
                             AUSTIN                                     .,.
                                                          .~
                                                          .~
-o.yuac           --~
--
                                            ?

I '.

                                         e sands or other
                                         ny suoh oil or

                                   Tcgarardlng
                                            the follow-

                        p tsksa a contraat fmm the op- :
                        Z~a well   for   a stipulated   psi06     ‘~
                        e&500 sadka oz"oeuceint).Bill           I.:

               "2. There ia a~tool known ah--a'aemmt .. ~'
          packer* which is used in ae~entingllners In
          v;eu.s. Tibiatool in lmsed or rented to the
          owner of the well or contraotor Sor Q ret or
          $12 per day operators tlco, plus oar tillaage
          to looation a& oporetirts ~XIWUWB. ?iouldtha
 mnorable   George   H..Sheppard,Pade 2                         I

      party who maelves rent i’prthe ‘paoker*-,be
      subjoot to the tax on the rental reoelved or
      rental plus expenses 0r the operator?
           “3. A mechenlcol perforator 1s used.ln-
      stead of a eun perforator. Uylllthe tax apply
      for such ssrvlpe?        \’
          “4. A~idihfng - the oontraotor make8 tViO
   * charges to the ‘operatorof a weli; one, la for
     the acid used; ths other for the scrvloe rec-
     dered. i’Ill1the receipts iron bo+& be taxable?
         “5. iiooitraotor take3 a contraot to ‘oleau
    out an oil well, part of the work will .consist               :
    .ofacldizlng or ehootlnh. WI11 the receipts of             ‘..I “_
                                                                     i.
  .~the entIN. job be taxable~,’or will’.
                                        thd oontr’aotor‘,,’            .
    be .permlttedto meke two separate bllllngs.~and .~             ‘:~
                                                                    j
    tax aocrulng only On aoldlzlng Or'aho+lng serv-
  ’ Ice?” ‘.
           The aimer to soue of .iourquestlois oallsior the ’
 dcter&lnatlon6i the neaning of oertaln words used In aone       ..     .
 zieotlonwith a pertloular‘trade,to-wit; the oil and @as
produolngbusiness. iWl6le LO, sub-paragraph1, .Etmlsed
 Civil atatutes OS Texas,says;
                                                         ,
           Vhe’ oidl&ry~ 6igaifloatlOns&i1 be s&plied
      to word~s,’
                exaept words ot art or words connected         ‘.
      with 6~partloular .tradqor.subjest titter, when
      they shall have the sl&nlfioationattaohed to       ~. : .’ _‘, ,,
     .-thenby eqerta ln~duoh art or trade; with'ref-.
      ynce to suoh aubjeot matty.* ”            “’
                 9. 1.     .
 3% realizethat w13are n& experts ‘in the’oil and +?$spro-
 duolng’business, and we hesitate to’plaas a asaning on som      ‘.
~.cS~.~ha~trode
              words laqolved~in .-a opinion; but It.1s ouz          .. ;
 duty.to.tiavissyou on :the.Varlous  “1ea;al‘questlons
                                                     that ocm,         ~~‘..
 betom you,’agd .ln’oti,lnexp&rtway be wlll~‘prooeodto ado
~o~r’dutti.I~y
             antiooerlng
                       your’quostlonseven thou& we mast as-
 certainQk ..,
             .teohnlcal
               ..      trade neanlng of oertaln.word&      I
           The gartlkular statute in queitloh“1s paragraph
 (bg,Seotion $, of %rticle .16,Eouse Eill No. 8, Party-seventh.’
 Legislature, which r,aa$s
                         .a8 hollows:        .'     .':
 xonorableGeorge H. Sheppard, Paga 3

            n*(b) Every warson In this State onuamd
       In the bu&ass-c? furalchln& any z&iio;j &
      parfoming any duty for oth!irsfor a conslbsra-
       tion or ooapcnsation,with the use of any de-
      doe, tools, inetrumnts or equIpcent,elootrlt.
      onl, mechanloal, or othontisa, or by mans of
      any ohcmioal.,eleotrloal,or moha~loal pmoeso
      when such servioe Is performd In connection
      with the oamntlng of the casing seat of arg
      oil or gas well or the ahcotinz or ccldizin;:
      the formation of auoh wells or tho mrvoying
      ortestln~ of the cmds or other formtiona of
      the earth of any such.011 or gos GUS,       shell
      report on the Mth of eaoh month and pay to
      the ComptrolJer,at his offloe In Austin, 'i'sxas;
'...~ an oaoupatlon4xx 6qua.Xto tvm and two-tenths,
                                                               ..
      (2.21 pe.roent of the p;ross~ auount risaeivood ..
      from asid.servlo.e'fumlshedor duty.perforxmd,
      dtiringthe Oalendar month 'next. gamedlAg; The
      said report shall bq.erGcuted.under oaC1 on
     ;mf&~r~~eesorlbcdand..  fur+hsd by the.ConpY
                           1'                  ."
                '.
 _.        Tho,key word id_tl& statute,
                                     .    _In.-determining
                                                   -
tne answers to your questlons, Is mmvice".         'ille
                                                       persons
taxed are those persons~~Wfurnishing   any ncrvlce or perform-
b&m;     uutut.* * . when euoh sorvioe Is parfoaoed in oon-
              (1) the aekiting oftthe casing seat of any            .,~"I,...
011 or gas .weU'or (2) the'.shootlng   or (3) aolU1zin.gthe
fornationsof ruoh wells or (4) the surveying ortesting            .
of the sands OT othe~,~.fornatlons oi ~theoarth,la any suah
011 or gas wells", and the tax Is "two anU'.two-tenths     (2.2)
per oent.of the gross amount reoalved from said service
                                 i:ethink thle ,lea tax on
~~~l~~;;~fO~d.,

          In,arrivlng at anfmera to your' questionswe'want            "
to point out that them is a dlstlnotfon betgeen d-*sale"             :.
and a %ervloe*. Likewise there Is a dlsticotioa between
the phrase %aterlals  iurnl&edw  and thenphrase wservloee
iurnished.~                                   :
          2110 IS a now statute, aad thcrofore we are un-
cbleto find any appellate court aaae direotly in point on
thlasituatlon;.butwe do reoelve so&e help from the language
Of casen from other states,oonstruing what constitutes a
                          ..i
                                            f.
         honorableGeorge Ii.'
                            Sheppard, ?age 4

        sale as Qlstingulshedfrom a norvlae tithin the meaning
        ZTkles tar laws. In the aamiseman          v. Gillioz,
        192 Ark. 915, 96 I;.E. (2Cl)459, the Suprcse Court of
        &icansas held that when a btildinz oontraotor ereoted
        a house under an agrarmont by wkiah the aontrautor fur-
        nished the material and lcbor for a given EUC It constl-
        tuted a S&e Of the meterials, and tiX3!FElrtOf the sum
    -   wh ic h     wa s   & $ ven    "he materials was subjeat~
                                     In   p Qymult   oi   l

        to the sales tax; ana the oourt saia:    .':
                        n       mey 8ay he does not sell the houses;
                   thet hi ~o&struotsor coots them; and that,he
                   most certainly doos not sell the lime, cement,
                   lImbor, and stsel whlah he uses and oonsumes in
                   rabrioatlngthe oompleted struoture whfoh he
                   ereots upon aad under, the own~r*a rapa.

                   ‘~ WC? Courses one WC&? noi Say that ;th8 :. :
              contractor sold'the house, but unquest1onebly       ~.
              he sells tho materiel that goes into the house. ~,
              It.~oaeshould oontraot to'furnish the material.
:          ,'..
             ,~:isnalabor andbuila a'houoe for the owner/he
              G0oula neaessarlly estimate or oalpulatet&e
           : value or.thamaterial ruinishea and the .owner
             'would heve'to pay ror3.t. The aontractorWould
              sell this to the owmr. . ."
        A 8lmila.rholding was made in the 'aase or.%teenth Street
        ,InvestxentCorporationv. People, 81 Paa..[Zd) 764, by the ....
        supreme court ot Colorado, in whioh the aourt saitl:. .. .~
                        We cannot, as a oourt,'be'lgnorantor
                   what all men know: that a aontraot lnvolvlng
                   lebor and materials which become a constituent
                   part of axrimprovement,the cnvnershipot whioh -
                   paeses to the owner of the ma1 estate, in-
                   volves a transfer or title to the mterials   ;
                  ‘~rora considerstion. Thet work and labor is
                   to be done upon or in oonnection with the mater-    .~
                   ials es an inaident to or in conneotionwith
                   the transrer of title to the materials, doe6
                   not rob the trensaotionor its essential char-
                   aoterlstlcsof a sale ii'the whole or any         ..
                   measurable part of the oonolderntionfor tDs
                   perrormanaeof the contraot is oompensation
                   ror the materials. . . ."
                                                              :
                                                              .   . _.
                                                                         ,342

HonomibleGeorge H. Shapgard, Page 5

& exoellantdlsaussion of whhathora transaotion is a sale
or a eervioe or a Mxture 0r both is round in the aasa7
zestem Leather ECFinding Co. V. Stats Tax’Ccainission, 87
Utah 227, 40 Paa. (2d) 526, In whiah tho EuprasloCourt of
Utah held that when a shoe oobrjlerrarairs a pair of shoes
by sewlog”‘newlcathcr on to tfroshoes it constitutes a sale
or the loather and the aobbler’s-ohzrge 1s not made entirely
ror servicee. The Cisoussion In t!xitoas6 .ia 80 excellent
thatwa quota at laneth Srom’it as follows:,
             -. . . It the oharge nade rdr regalring     -’
       shoes oonstitutes a sale by the shoe repairer
       to the owner ol the shces or the mtariels used
       fn.ths repair jobs, then ena in suuh case under
       the express provisions of tho aot the plaI,ntifY
       is not liable for the payment or the tez hare
       sought.to ba .iap~sodupon it, .+,t ,:       3’ .~ . ._“:
                                                ._”_,__
            n     . The mere iaot that the Xaather and. : 1~‘.    .: ..._.>,
       other s??tarialshero in question were used to      ..
      .make.only a part of a shoe.Qoos not ohange tha :           __ ‘.
       nature of ths .transaotlon.A ‘sale of coeds’ la                      :
      ‘definedas .*anagreement whereby the seller
       transrors thqrproparty 5.n.goods to the buyer.    -:
     ;.~fora considerationaalled the prloa.* R. S. .: :
      Utah 1933, 81-1-l. A sgla 18 in effect so da-
      rinea in’the aat hera .involvetL ‘#henashoe’. ’
      regafrer dellvors the ‘repair& ehoes to the         :‘,
     :‘ownerthoreof snd receives yayxent therefor,
      the title to the mterlals used in the recalr
      lob pasees to the onner. lhe amount Baid          ~.

..

        ‘.*The problem oan ba best approached by
     ‘nssumfngextreme asses on both ends cl’the &&EI.&.
     Ytaena barber shaves a Ferson, the lather and
     seep and soothingJotion which go upon the cus-
     tomar are mere inoidcntals as oomgarad to the
 EonorableGeorge H. Sheppard, Page 0 ;

      service   pm0rmt3d.   It la Ilkewlse~tl-W or shoe
      shiners. These Illustrate asses on one enitof
      the gmut. Where a nerohant sells readyzcade
      clothing and In ooaneatlon therewith iloosal-
      terationsand perhaps furnishes rmterlals, suoh
      as a rzall pleae of cloth or thread, we have a
     case In vihlchtho sorvlcos are izerol~ - lnolde5taI
      to the sale. Other oases lie inbetween. The
     auto5oblle repair shon furnishes rar,tsas vln as
     scrv ocs. ‘iheparts may at thea amount to 5ore
     than tha services md other tims vise versa.
     SOE~  tr&des hzVs lOag CuStO!Yarily GGparated   their
     ahorges for aerviaes and parts. The autor2oblle
     repair trade lo an exmple. more it Is quite
  _’ easy to 5ake the eeparatlon beaause the parts are
     usually very deflnlte. In ~the shoe repalrlng
               105 theother hand’,the. .practlae’
     ltidusttiy,                                   has.,- ,...‘.:
                                                              : ‘.
     been just the cpposlte. A gross oharge     le mada ..%.   .~~_
   ..without separation. Indeec¶,it night be dlffi-
     oult to:aake the separatloa ln this trade beoauss        ._ ..)
     of the alffloulty of d5temfnlng Just.how nuoh              ‘_..
     leather out fro5 a larger ~pleaegoes into each,
     job.* ..(Undersaorlng ours)
  0’ther sales tax cases that 5ake similar holdings are Cuslak
’ v. ComonweaIthi 260 Ky. 804, 84 S. XL (zd) 14t Wby v. State
  ‘iaxOoromlssion,  (Ala.) 114 So. 233; iX$sbp P. Johnson, {Calii.)
  09 Paa. (2d) .2681 and C, & E, Zkm3hl    0. .v* &es, 373 13.3..
 381, 26 IL E. ‘.t2d]~4&3.                                          :_
           The only Texas~Ap~ellateao.Wtioaee fram which we
 reaeiveany help in decldlng this question is the case or
 Stmdard 011 Company or Texas v. State* 342 S. Vi.(26) 519.     .~
                                                                 .~
 In that case the uerendant oontended that when automobile
 tires,tubes, battories or other aooessorles were installed
 on an automobile snd a single oharge rcedePor. the transaatlon
 thatsuoh a transmtloa was a %3ervloo* only and not a %81e”
‘80as to mahe .theopsratdl;iji
                             of the iilllng station where the
 transaotlonoaourrea subjeat to tbs “chain store tax”, but
 the Court oi Civil AppeaIs held that a “sale” ot said artl-
 01estook plaae, and it to evident that the oourt thought
 thata part or the sum aharged rapresentedthe sale grloe or ..
 the article and the ranala&r represented the oharge for the .
 serviceof installing the artiole.
          The noun Raervioew l& datined in Kebsterla Eew
 InternatlokiLDlotlonary, 2nd Edltloa, as follovmt
                                                                               #.,.’
                                                   .
                                                                                           A!&4

           fionorable
                    George IL Sheppard, Pam       7

                        flPerfoma?snoe
                                     OS labor for the benefit of
                  e&thsr, o$ 3t another's ootrzand." ,
                     .
                        The foregoin& diotloaary doflnltloh snd appellate
            ooufloases show that there io a dlffcronoo between furnish-
            1~ a mataria 6na fUnl.5hing a oorwioc. Ye 8x6 oonvinooa
            th3t the tax in qUoRtion is a tax on the SGrVicillg Of oil
           ~cndges welln masured by the gross receipts &rived from
            "servicerurnfsheu~ in ce7t3in oil cindgas well oPor3tions;
            3ua it is not on the furnishia~ of mtarials to 05.3.       and ~35
           veils. Therofcrc,a rnrty who acmnts 3 casing seato? en
            oil or g35 well for another person, end who furniches the
            00mnt for mid o~smtlon, L * sntitlod to deduot the oost of
            mid oezent rronihis gross receipts before ooxputinfs        the tax.
'.I',    : oq anm~r.to. your  .. flret question fs ;yes*,~
                                                        _._,,....'
                                                                ,.;.        :,;,,,~...("
                       ve wiil~n6w take up your seoond inquiry, &oh
           deal8with the furnishingei a Wo821ent.paoker1*.        Since re-
           oeivi.ng  your request Sor.this .opinlon,    you hevo advited   us    .
           that this Wo&xmt packs??*is.“made up with an& form a part                 ..I
           of.theliner berore it is rU into the well on& this tool                ..-
           ien;ains  in thei~11"; and you.also advigql us tAbatthe con-:: '1,~'.
           cein turn&shlagthe "cemmt peokeFch3rCes:the owner of
         .'.                                                                   .,
           the well ~$22.00 per day operator(8 tins plus oar nileage
           totbe location and.' . .. operator's expenses", and that
           the operator,~o,tig   knetalls the *oezehtpacker' and doe8
        ~ not hew eny part ,in the aotual bexentlhg operatioa.n
                                                            '_
                       be uncerstana that the "oment paokcr" in question ~~,
           ia a devioe or material    that is furnished    In such a mahner
           that It becomes a part of'the ~~11. .Itis lowered into the              ::
           ~011 and used there ,onlyfor the purgose of oemnting the                 ...:,;
           mliner",whioh ia a particular type of shortoasing:at or
           near ‘the bottcrm of the well. But, after the liner ia ownted.
           the "packer"oamiot be removed. (see uPetroleunPsoduotlone ~~
           by WilburF. Cloud, 1931, page 165; 169; "Elements ai the ?ed
           trolounIndustry", edited by E. De Golysr,.194Cj pages234i'
           and *Perforated.CasinC   end Coreen Pipe in Oil bells*,.by IS.
           W. &I&y, u. 9. Btieau of iLinesTeohnioel pnper 34y)::                    _~(

                   3'0are oonvinoed that the "cement ieckor* in dues-
          tlon‘ls3 x3terinl furnished,and that the char@ fcr the
          a3m is for mteri32 furnished azd not ?or a ssrvice furnish-
          ed. Iiowevarithat &*rt of the ohorge l&t is-or        the                    :
          iurnlshlngor the operator is a oharge ror a service, the
          serviceor lnstalllng the Woem3nt.paokerW. The hot that
                                     ./' ~~                ..
                                                  ._
                                                                     w..
                                                                           a45

        DonorableGeorg   FL Sheppard,'Page8

       part of said olzar&~is based on ocr mileage and part on
        operntor'ne-case does not prevent It from being a charge
       for a service. A person could hire a day laborer to per-
                 kind of service at 73.00 par tinypluo his trevel-
       sol-9soi?ze
       lm expense to and Srom the job each day (20$ ror car fare)
       and his eotual expenseswhile on the job (45d for his noon
       day lunch), or a person oouXl hire such a laborer for $3.65
       per day, the leboror to pay his own traveling expense and
       other actual expense1 and, it 13 our opinion that in either
       case all oS the monny rocelvcd by theaborer woul& be com-
       pensationror oervices furnisha&.
                   Before giving our answer to your se.oondquestion
....    wa.want.toagain mentl.op,that   the tax in question applies
       .onlpnhen the servioe is perSormed.inoonneotlon oiithone oi:
        sour speoirioallynamed idiland gas well operations, to-wit,
        (1) ~oeize~tine;0s the easing seat,* (2) ?shooting,w (3)
        "aoSdizin&the Sormations,"ard f4)..Hsurveyi5g    or tastln2
        of the annilo.*  '26have not been given any inSormetion show-
       'in2 that Install152a,.:oement.paoker*,   or even.oementfng
       .a Qnern, is one of the Sour named taxable operations. If ~~   i    .._
        it Is riotone oS‘tho8e fbur operations the reoeipts there-
        rrom are not to be oonsidored in ooi$putingthe tax.
                 The furnishing OS the Woamsnt Daoker" is the Sur-
       nishingOS a material, and the Surnlshing of the operator       ‘.
       18 a service rurnished. Q\;ranswer to your seoond question
       le that &f-the Surnishlng and lnstalll~ or the *oement
       paoker"in que8t5.05is one of the Sour taxable operations
       named in the statute, the charge Sor furnlshln(Ithe wocmmt
       packer"should not be inoluded in the reoeipts on which the
       tax Is oonqutcd and the~dharge Sor rurnlshlng the operator
       shouldbe inoluded.
                .We will now take up your third lnqulry, whloh la
       in regard to meohanioal perrorators. %e are adv%sed that
       -wperSorati5/fw,
                      as that term is uoed in the oil and gas pro-.
       duoingbuslness,is the operation OS breaking holes through
       the walls OS the easing In a well SOr the purpose of making
       omnunication into or out oS the earth tcrmatlon et that
       particularlevel. (See "Elements of the Petroleum Industryw,
       editedby E. De Golyer, 1940, pop3 229)   There are two
       ordinarymethods or WperSorating",to-mit, "gun p6rSOrati5g'
       and %eohenlcel perTorating*. Gun DerSoratine;is rarerred
       tG in 'Tundementalsof the Petroleum Industry*, by Dorsey
       Bagar,1939, at page 246, as roilma:
          .        .        .

      I                 .

                        HonorableGeorge H. Sheppard, Page 9

                                            "Gun Perforators.'-k great improvasent
                                      In the teohnique of ooo~pletingwells has re-
                                      sultad frozethe developmentof the gun parfor-
                                      atsr.   !Mo devfce firm .45-caliberbullets
                                      through the oaoing, and even through any aen;ent
                                      in back of it, and penetratea through to the
                                      gas or oil zonen.w
                        The seuo authority at page 247 dloousses zecbanloal perfor-
                        ati= as folloxs:
                                            wPerforationsnay also be aade by lcwerlng
                                      a cutting tool, oalled a. 'perforatoy, 4 in the           ',
                                      hole.   ,Ws  tool oontWt8 or 8 rolling   knife .., i ~.~. ~          '.
.~.
              ,.
                ..~,.           ..;
                                                              toothed whe&l:with out-
                                      whioh fs 'a"eta&'-shtipod'                          -.-j.   :
                                      tfng points; After the'oaring ia perftiated,
                                      the well is b&led to remove the SUM%, sludge, ,-
                                      and drilllog v4atey.e
              ., YOU questioo.appaxentlyrefers .$othis iast mentioned                                 .-
                 m&hod.     .i_
                                   As heretofore indicated'thetax in quaation ap-
                        plies only when the aervtioeis performed in oonneotionwith
                        0~6 0r row   ~p~~ifi~'ioaug ne3l0d0s aa gfi8~011 0g0rtiti0ns,
                        to-wit,(1) *ceplenti% of the o&sing seat", (2) nshootQ&g*, ..:
                        (3)'*aoidiziugthe fornations*, and (4).%?urveylng'or test-
                        'ingCJSthe amdam.                  .~
                                           Aft&
                                        roa%ing your written request for our opln-
                        ion and tdklr@       you, 'Irro un%arstand you have in mind
                                                  with
                        the question of whether the use of a meohauioal perforator               ., '1
                        aoastltutea"shootfug=.
                                  'We&st give the word ushootingVthe meaning that
                        ~.ie
                           attaohed~to it la the 011 and gas'produoiag trade. In
                        "%+rolsun Produotion*,, by Wilbur y. Cloud, 1937, at pages
                        CC1 and 403$ it sayat:
                                            *Oil well ahaotingdatee baak to the .tine
                                      when Colonel E.k.L. Zobezts exploded eight pounds
                                      of (;u.npo~xke at a depth of 433 feet In the Ladies
                                      bll on Katson Plats near Tittusv5lle,   Pehnsyl-
                                      vanla, in Tanuary ; 1865. Durin.c,  ths latter
                                      pazt of Yuly, 1866, the Roborta Torpedo Company
                                      ~8s granted a patnnt oovsring this process of
                                      increasingoil well prcmu3tion."
                  EonorableCaorge IL Sheppard, Page 10 :

                             “At prosont,theream throa types of ox- .’
                        ploniveauaed ior sh@oting oil wells: liquid
                        oitroglyoerin,solidiiied nitroglyoerin,nnd
                        gelatin dynamite. 02 theso the liquid had been
                        used most; however, the solidifiedform,is sarer
                        and more vn?iable in ap;licntionSnd resetion."
                            .wOllwcll shooting is not prectioel      in    :
                        all 011 fial15s;but IS sonfined lar.Selyto
                        wells or nreas that rroduoe from hard, compaot’,‘_                                I
                        close-grainedfxndstoncs and IirceStones.Soft
                        and unconsolidatedrocks, which are typical of           .'
                        the Gulf Coat area end 6ertnin California,
                        fields, do.not respond to shooting; and for
                        that reason shooting is,ra^&er unocnzon.inthose.                                 .;
                        regions...: .'          :                                        .’
             .                       _::,,
                                         _                                             :
_       ,.        : .                                                                       ‘.         ‘:
                                                  'i& $ioduotioa’~ay
                           ’ "Sh0&ixig oil .v~el.ls                     be ” :                     ..’ .)
                        done for one of sevorcl reasons: An apparently                          ..        i,
                        try hole mrryhave b&on drilled, +nd before the: I. '
                       ~011 is abandoned‘someoperators may &et-off,‘a;                               :’ !’
                       oharge of nitro~lyoerln-asa linal &tort to-                :     .‘-      .        r
                       vard.'brin(fiag in~sn~oil,~ell. Also, in Some ;.
    .                  ~11s when dril..Jed  intotight sands and..krd. :._'~
                       llms, the reservoir    rook maybe 0nly partly~ 'e
                      ..saturated with oil; andvery~Zittlc:gas may be :
                       present. Jyroquentlythe .shootingof such for-            :: F,-:C'.  .
                    .'1xutiona .rdaultS  in the completion  of-good   corn-~;;;,.,;..
                      ~~maroiiloil,xel.la. ylowinffwells era given.
                  ,,,,;~:"
                       light 'shots*or .nlt.rcSlyceria,   blasting ~el,lS....i. ..: '~
                                                                              ',.:
                      .ars &ivea light *shot6* of nitroglycerin,blast; . ,': ;'~. "~
                      '-in2g&atin, Or glyoeri.nite,   to clean-out the
                       well and fraoture the sand f'aeo,.thuSprolong-.
                       ing the period of notural-f'low.,X:tnyold pump-. ".'              ',
                       ing wells are Shot.pf3riodloallytostimulate
                       drainqe into the well."                           ;.,
                                                                          _. .',_
                 I& wyadamentels of the .Petraleum.Industrg’,.~y‘~,~Y~,Bagari            I .:
                 .1939,at.pa$e 235, it Sayst                               :
                                                                                              ,,.’
                                                                                                     .
                             Whootfng aooomplishes several~purposes,.: .R.'           '~".
                       speoirioally,it       ,
                            “1. iWx&s~up the EMdStOReS or linestones,
                       oauf3ing~ohennels
                                       to for+
                             "2. Opens passages to fraotura zones or to
                                                                                                 ._   _:
                                                                                                       j
         RcnorableGeorge X. Sheppard, Pace 11

             joint planes In whloh oil,may ooour.
                  "3. rorms a   hr&tr   WJlleOtiAfZ
                                                  area.
                  “4. Creates nore seepage spaoe in the hole.
                 .*S.Createe a vacuum that sucks in the Oil,
             sturting it through channels iAt. the well.*
        xn th oaec of Texas Granite Oil Cospa~y v. Mlliarzs, 199
        xy. 146, 250 S. \1.Clc,,the court ~e~t10~ed "ahcotlngWof
        IU~ oil well as r0u0w:
                  "It is a ratter or OOE!!OA'hAo7.'lcdC;e
                                                      that
             the shooting of an oil oell is done alway at
.. :         a tise.wbeA the,well is at or Ae,ar~ooniplet~on,
        ',-'.'
             -otwhen the'05.1sand has beed .rahohedj‘thepur- .' . .:..,"" ~'
             pose being.to'loosenthe fornation to,the end
             that the f'l~~of 011 znaybe &oreaseg?.W ~~
                   Ye think that it is appareAt that Wperforating*
       ..an oiL.wellIs sltogether dlff%rent.from?shootin@ 89 oil
         uoll.~Z&ether the ~mparfcratiAg*~.lsdmiswlth a *gun per-- ..-
         iorator*or.8 %echaniosl parSorator", it'does not come
         Vii$hiAthe~eaAi~3 Of %he tcS'a"shooting". Other author- '.
         itleethat support this conclusion are as followa: Well-
         stootlnG~with Rcterenoe ~toSecorzary Oil Reoovery",by .,
         Ii,L!.Ryder, Gil 6:Gas Journal (.Pay 6, 1837) 683 "Zell
         'MatmAt after PerforafiAgW,-byB. Bankis, Oil Weekly :'
        .(Yaroh28, 193G) 36,.011 & Gas JourAal (Maroh 31% 1938)
         176;and "Gun Perforator Utilized in ~Scmfordyoedield for
         Conpletlonoi Oll'%~ello~~,by T.P. %&lers, 011 & Gas
         Journal(July 33,,1936).53.     : ,; ,,   i.    *
                  We have @me to aonsiderable~lmgth to show that :
        "perioratlAg* Is noteinoludad in the.term nshooti~W, and
        that it is not uned in connectionwith aald term, because
        we ubdors^&ndthat a COnfUSiOA  of thoec terms gave rise to
        your question. Io th,eoperation of mperforatinG*ever per-
        tomed aa a part of or in oonneotionwith any of the other
        taxableoperationer, to-wit, "the o,ene~ntlAg
                                                   of the oaslAg
        mlt,",*~aoldiziry:the fomatioAs",~or ffsurveyfng or testing
        cf the aaAds"? Pro3 our study we hove CGZB to the oo~olusion
        thatit crdiaarilp Is not,.but there nay be scxe u~ust.ml
        instenceaiA which it is perfomed in oonnectionwlth OAe Of
        saidthree operations:,                                       .
                                                 .~
          &Aorable George fi.~2hepparb.Pa&e 12

                    Om ansasrto your third question is-that the
          tex in question does not apply to the ordinary use of a
          9ieohanioalperforator",but It would apply if a vxeohan-
          ical p.erSoratoPw3reueed in connectionwith one of the
          four taxable operations.
                   38 will now teke'up your fourth inc,uiry,Miioh
          concernsncldiZiA&. IA w~lOZOAtS   Of the %Jt~O~SlliB  b-
          awry*,  edited by B. OoGolyor,  1940, p,qe  225,   it ~says:
                      n,:oldizatioA, in the oil iAd.ustry,  is
                the proocss OS introduoina aoid Into the pore ':          (;,.
                space of An aoid-solubleproduoina fomatlon
                for the purpose of enlargln6 the pm8      by dls- y .... ‘.~.:
                                                                            ’ ‘~ :
..   ..    “..
                ~olvi,~ surroun~r@ $omatlOn and thsr?eby .i.n- ; ~:-:‘t\.’ ,::‘::: :.~
                oreasln5 the pez%mabilltpof the *pay* around ~',' ~_,.           .+:
                the well bore. This n&hod ot enhanoing the               ,_ .'
                produoiA&ability of certain oil-@educing
                strata'appliesprfnulpally to the aoid~soluble
                xoservolrrooks, suoh as limstono and dolomite,                    ._,:
                but:oooaeionallyitlo used in.eaad formation.                  .._;
                to dissolve aemnting materials. . iv.
                                                               I.
                     Re believe   the sax6 reasoA8 .ayply~inenmerfng .
          this questioA that apply .%a answering-ybur Sirat,ijuesti,qn,*~.~  ..,
                                                                               ,.<.,,,
          v;SiohOOAOtWA& ,Oanient,    As harotoSo?e pointed oqt',there?
          Is a differenceb&we&A Surofahing a mtsrlel ad Surnlsh-...~‘~~~~~~“‘.
          1~6 a serviae. %e SurAishiAgoS the acid'is the ru33e.h-            : :.    '.
          In& 0s a.materlal. Yhe.tax Is on1y.011the servicing OS
          oll'andga8 v@ls, 'and It OaAnot be oaloulatod on the re-            *'
          ceiptsderived Sron:Suxnishlnfmaterials. Cur answer to
          ycur fourth question lo the-at  alparty who aoldlzes a well
          for another, end'Surnldes the,acid, 18 entitled~todeduot             ~~.1;
          the cost  of said'aoid Srom his~&roee reoeipts beSore 0~:         ...,
          putlq the tax.
                    Ze will now take up your fifth i.n@&y, whioh   "
          conoernscluaniag out (~11old well. A8 we have stated so
          Amy times b&ore in this opinion, the tax iA question ap- :.
          plieoonly when the servioo Is porforme$tin eoAAeotioAwith
          one or the Sour 011 and &as well operations speolfioally
          namedaa taxable ~4x1the statute. "Shootfng" is ona of
          tIma operations,end Waaldizingw is another, an8 therefore
          tha receiptsfrom nshootlAgWInd *aoidizin@ are taxable.
1. '.   .,

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