OFFICE OF THE A’ITORNEY GENERAL OF TEXAS
AUSTIN
nooorable Olin Culboraon, &mber ,'.
~~1lrom.l Co3iission of Texus
liustin, Texas
.
da consoli~atod
r is it precluded
oing so because of
der of June 5, 1941,
ding the combination
in order to ob-
20, 1941, setting forth
ueetion thereunder. The
ropounded are copied in full
x.
..
oil field containing R certain 200~
tie to whioh was held by one person,
was subdivided by lease into various tracts. 11
seoured a leaoe on 40.33 aores in 1939. g secured
a lease on 20 mras by assignmnt of tho original
loase end subsequently 8 by assignntlent transferr
said lease to & on Cq20, 1941. $
"On June 5, lVi+l, the Comisslon passed an order in
whioh.it inhibited donaolidatlon of treats for the
gonorable Olin Culboraon, page 2
purpose of either drilling ox seourlng oonsidsra-
ties on allowable8 by reason of lnoreased aoreage.
mior to that time the toleranos rule of the Com-
tit~issionprohibiting such was not in erreot, but
there was a toleranos rule.
aOn Eay 28, 194l, A scoured this additional 20 aores
asd asked that it be oonsolldated with hla first traot
or 40.33 aores and that the Commission allow him oon-
sideration for 60.33 aores in setting his allowable.
The two tracts mentioned were and are the only aoreage
owhed by both & and 2 in this purtioular field, ex-
oept for other hnd8 owned by &which are not oon-
tiguous to the traots in question. Both~tracts are
oontlguous.
*QUZSTION
“Under the Comission*a order of June 5, l,941, is
the Oomriissioa pm&led iron granting 4 the author-
ity to oonsolidate these two leases?W
In addition to the raota set out above, we deemed it neons-
erry to obtain rurther larormatlon in order to properly answer
tba question asked ua and 80 we obtained the COmissiOn’s rile
@ovaring the leases involved herein, from whfoh we aOqUir8d the
~olowlng additional iniormation: ;
(1) The baste In question are iooated in the Pittsbure
*f@l& Camp County, Texas.
(21 When the tracts in question were subdivided from the
erlglnal 2000aors tract there were no special field rules in
filstenoe in said area and the ata%ewide spaOin&.rUle in el-
:**t then provided for a lo-acre syaoing pattern, therefore,
LJ 9ueetion is presented here of a subdivision made in deroga-
~a or the Commission’s spaoing rule.
(3) At the time 0r the ooneolidatlon 0r the 40.33-aore
lraQt with the 20-acre traot, the Commiseion*s ricld rules in
@notable Olin Culberson, page 3.
.
$h, pitteburg Bield insofar as they are pertinent to our
bqdry here provided a8 ,~ollowsa
lms 1. Said field end further extensions
thereorha3.1 be divided into traats or forty’
(40) aores each, and saoh~produoing treat shall
be a proration unit. A tolerance or twenty (20)
cores on pxcduolng tract4 0r more than forty (40)
aores shell be allowed when the eize and shape
or the tract warrants and after the tra.ot has been
drilled to its finaldonslty. Por proration pur-
posee the amount of acreage ssaigned eaoh vrell
shall be the aoreage oontained in aaoh proration
unit, whether fraotlonal or not. No unit shall be
in length more than twiae its width, where the size
culd shape of the tract permits.
The daily total field oil allowable as
;+%%$the oonmlssion shall after deductions have
been made ror wells inoapible’of making their allow-
ablss, be distributed among the producing walls in
the field on the followins basis:
“I(e) The daily eoreage allowable for eaoh well
shall be that proportion or fifty tSff$) per cent
ot the dally field allowable whloh the aoreage
assigned to the well bears to the tot@ aoreago
aosigaed to all the wells in the field.,
a(b) The da&y per well allowable for eeoh well
disll be determined by dividing fifty (5%;) per oent
of the total field allowable by the number of pro-
duoing wella in the field. The total daily allow- ’
able for aaoh well shall be the sum ot its aoreage
end PGC well. allowab1es.e
Said speaial field rules further provided that wells should
sot be drilled nearer than 1320 feet to enp other completed or
Wlll:ng well nor 660 feet to any property line or leaae line,
t&la being in effect a forty aore spacing pattern*
Baorable Olin Culberson, page 4
.
The Commission having found in &Seat by the promulga-
tion OS its l&-acre spacing rule embodied in its Sield rules
POr the Pittsburg Field entered and effective September 16,
1940, that generally specking wells drilled on a apaoing
pttern of one well to 40 acres will more efiioiently reoovar
the oil in thefield have in eifeot also found by implloation
that wells drilled on a larger or smaller pattern will in
general oauss physical waste. .,
In my instames the Commfsslon is oonfronted with the
duty OS determining nthich OS two or more meth,ods .oS production
1s least wasteful, one OS which must be peraltted in order to
protect vested rights or for some other valid legal reason.
. 1 tho least wasteSul is chosen then the Comiasion~s order
in question nust be upheld aa a conservation measure. .Rail-
road Commiaaion Y. Earl Fain. et al, 161 5. W. (26) 4987
It seems to us thst we have just such a situation here.
The l+0.33-acre tract was subdivided fro3 the original 200-aore
traot on Deoember 17, 1939. The 20-acre tract was subdivided
’ Prom the original 200-acre traot June 23, 1938. At the time
@id tracts wers so subdivided, the Commission’s applicable
epaoing pattern ram that provided in its statewide rules being.
one well to 10 aorea as on the dates set out above no apeoial
rules had been promulgated in the Pitteburg Yield, henoe, as
a matter OS law, said traots were entitled to separate derelop-
ment and to at least one well each. Hub&e Gil and petinlng
Company v. Aeilrocd Commission, 94 S. V. (2d) l$W; Dailey-
v'. iiailroed Commission. 133 tie W. (2d) 212. I..
Vnder‘the above faots it seems olear’lkus that the ouea-
tlon or tibether or not less waste will be oaussd by allow&g ~the
combined tracts of ,60.33-aores formed by consolidating the 40.33-
aare traot with the 20-aore tract, a toleranoe of 20 aorea as
Wovided for in its field rules @romulgated September 16, 1940,
than would be aaueed b:{ allowing~a well to be drilled on eaoh
OP said treats would be one that addressea itseli to the sound
discretion of the Commission.
@gorable Olin Ctiberson, page 5. ,
On tune 5, 1941, the Commission entered an order whiah
eQ,,ng other things provided that no oombinntion of leases
Vlll be oonsldered in determining whether or not toleranoe
vill be panted a Given well but we Bee ilo reason why the
QdQr of June 5, 1941, enacted subsequent to the oonsolldatlon
ef the tract8 In question should deter the Commission from grant-
lnb auah tolcranoe allowance to tracts oombined before euoh,order
ms ratered.
iVe pause here to distin@sh the, faote her&a from those
adsting in the Gillespie case (F. A. GlllestAe and sons Oompany
V. Rallroed Oommis~l~n, 161 8. \‘1. \2d) 139). In that ease the
&w,rt of Civil fippoal~ held that where an operator owned a number
Qf fj-aore tracts entitled to aepnrate,developrnent in a field where
t&Q rules provided for lo-aore spaoing with a maximum of 150acre
tolaranoe on the last unit drilled on a partloular lease, ,oom-
blned said 5-aore traotn into units of 15 acres each by’oonsolida-
ring three of the .5-sore unite, when said operator could just a8
eerily have oomblned tho traote into lo-aore unlte by oonaolida-
tlng two 5-acre tracts thot suoh operator wae not entitled to a
tolrranoe allowable when other operatora who had OOnbin8d their
5-Qore tracts into lObacre units to conform to the Conmission’
ipplloable epaoing rule olaimed discrimination and drainage be-
taau~ or the larger allowable given the 150aore oombined traots.
In that oaae the operator voluntarily oreated a spaoing
ttQEP oontrary to the Commieeion~s rule when if would have
FQQnfu8t a8 easy to pool the traots in oonformity with the
Qxirtin8 apaoing rule@. ,
I&the present ease the size of the t&to involved pre-
*lPdQa the operator rrom oombining them into a unit oonforming
tQ the Commission*s present spaolng pat$ern in the Pittsburg
IiQld.
From the above, it Is a4 parent that our answer to your
qUQation is that the Oommiaalon*e order of’ June 5#, 1941, does
ll”t PrQVQnt the Oommiseion from firanting n toleranoe allowable
in question. -
~, Your8 very truly