                  TEEATTORNEY      GENERAL
                          OF TEXAS
                                       Auwrmu      ~~.TExAe
PRICE    DANIEL
ATTORNEYGENERAL




            Hon. Wll1ia.m J, JWray, Jr., Chairnmn
            Railroad Commi6sion of Team
            hatin 11, TeJras
                                         Opinion No. V-836
                                         Rot    whore a traot of 65.65
                                                aoipw3IS segregated out
                                                of a 148.71 ao~e tract,
                                                 tawt the Comnisricin 00x1~
                                                 rldor the orlglnol tmot
                                                 to deterufae l&ether tit0
                                                 r*grP*gakd traot ir etl-
                                                 t2md &Qanothu. wall 18
                                                ‘aa exorption to Rule 37r


                        You huve reque6teU mu? oplnlou with rmprrat to
            the taeuaaae of a pemit a8 an exoeptlon to ?h~J,e 37* on
            the Luir of ee~tuia facts subaWmd in frour requart.
            la, brwlty,   ue 8ummlse the toots 6a iol2ew81
                       li. P, Pouell  hat made appl.ioatlvn  to
                  the hll6Ilf66b#l ?OF 8 6jWOilhl *FIllit t0 drill
                  a fifth
                        wel.2;
                            u a ulxoeption         to l@ale 37 on
                  his    65.65aare knot sh%oh ao&airu 2388 pro-
                  duatiw aore& Tirr D@IWBIII~LOU    do66 Mb pant,
                  a8 an uroeptioa to the rpaalag mile, a asoond
                  OF udditieiial~,~~11   ii Ineluding the m
                  a4 ~11     #H well &n&y on the product puclra-
                                                               #
                  aare6 will be 2u8m than five aorea Sop each
                               onde~ this foamala of the am-
                  $s%‘i               fiStl8 ml2     or2 the    23,04    gmxlwt$ve
                  aem         could not b6 ~;rraead,             It 16
  I ‘i            th8    ap lioant,        heuewr,       thrt    the       “Fa 2
                                                                        Pane       tZet
                  of    65. aozw ir 6 6thdivLion of a lrrg+r
                              8   5
                  148.71 6~6    tmdt; and &we there em aftlJ
                  rldmn wells on &he entlrr 148.71 acr8 &Wick,
                  ho ir entitled to anothm w&l on the 65.65
                  acvo Waot under tbs doatrine                    o? the 0ontw-y
kioa. William J, Rurray, Jr. -,Page 2 (v-836)                              .~


       care? ~4km 65.65 lore traot woe degrepted
       tram the 148.71 awe traot 6yb66qU6nt to
       th6 prowlptian   of’ the or$g1n61 sploi
       rule,   and rliqr   the dL$mvery of’ pm&toY lon.                .



           The qwrtion presented Is whetbrr, under the
above faote, the Cwwtaaion 10 required to $rmt a
alt luthorleing the drilUn& of the fifth well on t R”
                                                    e’
Pour11 65.65 aare tract under u1e fhetrlfm  0E tM
m,      oaae,            .* ’


            On,Hag 29, 1934, the Railroad Conualrel~n en-
,.tared the folfowlry order:2
               “R   uo~aatmmsn     the RaIlFord Cor-
       miarion oi !!a66,    thaT   Zn applying Rule 37

                                                                            -.

1
                                olia ?etraloum Cg. ,130
                                9371 h 1Ql     that where
                                 the’suidiv%ed   portion           .
    I# entitled to a            1 well in orae ta pro-’
    toot the vested rights o$.th?.ouners ~o.~eoorer their
    fair share of oil, a permit to drill’ a well, on the W-
     regated tract may be sustained..   For.@ d&3cusslon @f
    &he “Century Doctrine”, see 17 T,.L.Xt. 382 (note 1939);       .
2
                                                               .
       ...   -*




                   Hon.,william   J. Murray, Jr.    - Page 3 (v-836)


                          (spacing Rule) of statewide application
                         and in applying every special rule with
                         relation    to spacing in every field in this
                         State no subdivision    of property made sub-
                         sequent to the adoption of the original
                         spacing rule will be considered in deter-
                         mining    whether or not any property Is being
                         confiscated    within the terms of such spat-
                         lng rule, and no subdivision     of property
                         will be regarded in applying such spacing
                         rule or in determining the matter of a@ka-
                         fiscatlon    If such subdivision  took place         .
                         subsequent to the promulgation and adop-
                         tion of the original    spacing rule.”
                               Under the “Rule of Ray 29” no subdlvlslon    of
                   property made subsequent to the adoption of the original
                   spacing rule will be considered in determining whether
                   or not any property    Is being confiscated  within the terms
                   of such spacing rule, and the Commission cannot grant a
                   special   permit for a well on a voluntary subdivided tract
                   on the basis of confiscation.      Gulf Land Co. v. Atlantic
                                    134 Tex. 59, 131 S W 2Q 73 (1939) . This
                                    is subject to the ;oEtrlne    of the Centur;y
                   case, and a siecial    permit issued by the Commission en a
                   voluntarily   subdivided ;tract may be upheld If the original
                   tract,  a8 it was ‘before the subdivlslon,   is entitled  to
                   another well,to   protect the landowner from drainage.
                                All of the caees applying the rule of the Centu
                     case appaar to’be based on a finding of.voluntary       aud
                    slon within the meaning of the Rule.        Although we have been
                    unable to find a definite      expression  by the courts that the
                    doatrlne of the Centure case Is applicable        only where there
                    10 a voluntary subdivision,      we believe such 1s true, be-
                    cause if the tract is not a voluntary subdlvlslon.wI.thln         the
                     “Rule of May 29, ” the Commission could, upon a proper flnd-
                    lng, grant a permit for.a well on the segregated tract un-
                    der the~conflscatlon     exception to Rule 37,     The question
                    arlaea ‘only when’the Commission cannot grant the exception
                    because of,the   ap llcation    of the ‘Rule of Ray 29.”     31A
                    T’ex; :Jur. 689, II $07.
                  ,.’
. .’                            It is therefore    material to determine If the
                    segregation   of the 65'.65 acre Powell tract from the 148.71
                    acre Caddie Fisher tract is a voluntary subdivision        within
                    the “Rule of Ray 29. ” Under the submitted facts,        the POWeLl
Hon. William   J. Murray, Jr,       - Page 4 (v-836)


tract was segregated subsequent to the date of the
original    spacing rule, and after the discovery    of the
production.      Also, at the time of the subdivlaion   the
regular spacing pattern for the East Texan Field was
660’-330’.
          The term “subd1v1e1on” as used in the “Rule
of May 29” was construed by the Supreme Court in Gulf
Land Co, v. Atlantic  Refining COY, supra, as follows
            n     . The Rule of May 29th, supra,
     uses tks’term      lsubdivlsionl   in defining
     traote of land that have no protection
     from confiscation.        The Commission has not
     seen fit to define ‘such term and ordinarily
     it would not require, a deflnit$og,:)because
     any tract of land segregated from a larger
     tract would constitute        a subdivision.     It
     is obviour that the term Isubdlvlslont           81)
     used In the order or rule under discussion,
     has no such general meaning.          If such a mean-
     ing should be given the, term, a partition            0~ ‘. ‘Y”* ‘..I:.
     division   of a 1,000 acre tract of land into two
     500 acre tracts would constitute          a subdivision
     of the land under the rule.         Manifestly,     ‘such a
     construction     of the rule would be absurd,,ba-
     cause the two 500-acre tracts would come under
     its law against subdivision,        while tracts of
     much smaller area which do not constitute             sub-
     divisions    after the effective      date of Rule 37
     would not.      As we construe the rule pertaining
     to reubdlvlsionl      subsequent to the effective
     date of Rule 37, It means that where a tract
     of land ir of such size and shape that It is
     nectirsary to obtain a permit aa a special
     exception    to the spacing provision        of Rule 37
     before a well can be drilled        thereon, such a
     tract will be regarded as a subdivision           within
     the meaning of the Rule of May29th, supra, if
     it was subdivided out of a larger tract after
     Rule 37 became effective,         Humble Oil & Re-
     fining Co. v, Railroad Commission (Tex, Civ.
     APP., writ ref.),      94 S,W.2d 1197; Falvey v.
     Simms 011 Co. (Tex, Clv. App~,), 92 S.W.28 292.”
._   .--




           Ron. William   J. Murray - Page 5 (V-836)


                      The Powell tract of 65.65 acres is generally
           in a rectangular  shape with an average width of 1389’
           and an average length of 1900’ and Is of sufficient
           size and shape that a well codd have been drilled
           thereon without the necessity    of a special  exception
           to the spacing provisions    of Rule 37. The 65.65
           acre tract would, therefore,    not be a voluntary sub-
           division  within the “Rule of May 29th”, and the doc-
           trine of the Centure case doe8 not apply;
                     As to the’particular facts of this case, how-
           ever, two arguments might be urged to remove this case
           from the above rule:
                       1. That the 65.65 acre tract is an edge lease
           along the eastern side of the East Texas Field and the
           four previous wells now on the tract were all drilled
           as exceptions   to the spacing rule; therefore,     under the
           Gul Land case definition,       the 65.65 acre tract 1s a
           &           subdivision    since the special permits grant-
           ed on the first    four iells   are presumed to be necessary.
                      In answer to this, we believe that the four
           prior wells were drilled  as exceptions  to Rule 37 In
           order that such wells could be drilled   81) near known
           production as possible,  and not because of the size OS
           rhape of the segregated tract.
                      2. That the C&f Lanf2;t;;     f;ft;iti;;e;;   ~~~~~j,
           oable only to productive    acres
           and if the productive   acres are of such a size m 8hape
           that a special exception to the spacing provisions      la re-
           quired before a well could be drilled    thereon, the traot
           is a voluntary subdivision    within the “Rule oi’ i?ay 29th.”
                       The above argument Is not applicable   to the
           facts of this case, and we render no opinion thereto,
           since the record reveals no facts which would lead us
           to believe   that considering  the Powell tract as a 23.04
           acre tract,   that It Is “a tract of land , , , of euch
           size and shape that it Is necessary to obtain a permit
           aa a special   exception to the spacing re#ulatlon   of Rule
           37 before a well can be drilled    thereon.
                                                    .-.           __




Ron. William   J. Murray - Page 6. (V-836)




                       i2Jmaix
                     Under the facts stated, a            5            .’


         65.65 acre tract is not a voluntary
         eubdlvision  within the Commleslenis
         Rule of May 29, 1934, and the Corn-
         miaaion need not look to the original      .’        ,

         148.71 aorea, aa It waa prior to ae-
         gregation,  in determining whether ano-
         ther well should be granted on the 65.65
         acrea aa an exception to,Rule 37.
                             Yours very truly
                        ATTORREY
                               ‘ORR



                        BY
JEWrbt



                        APPROVED

                      &u.2d’
                              0ENERAL
                       ATTORNEY
