GROVER SELLERS




   honorable Olin Culberson, Chairman
   Railroad Commission of Texas
   Austin, Texas

    Dear Sirr                           Opinion No. O-6603
                                        Ret lkuld an injunotion prohib-
                                             iting the drilling or pro-
                                             ducing from a certain well
                                             prevent the Railroad ConwAs-
                                             sion from granting an exoep-
                                             tion to Rule 37, allowing
                                             such drilling because of a
                                             change in conditions?

          Your letter of September 5, 1945, requests the opinion of this De-
   partment as to whether or not, under the facts stated, the Commission
   would be in contempt of court in asswning jurisdiction and hearing an ap-
   plication for an exceptionti Rule 37 based upon ohangad oonditions when
   the permit to drill at the identioal location had been cancelled and
   annulled by the Courts and the applicant permanently enjoined from pro-
   duoing suah well.

           From your letter and information oontained in our file No. A. G.
    3740, we determine the following faotsr

             On June 16, 1943, judgment was entered in the 126th
          District Court oancelling and annulling the order entered
          bythe Commission in Rule 37, &se No. 24,062, dated
          August 28, 1940, granting &us   B. Spear permit to drill
          well No. 2 on his Hubbard Botor 0.95 acre tract in Gregg
          County and permanently enjoining Spear from drilling or
          producing euch well.

             Prior to 1935, Spear drilled Well No. 1 on the same
          tract at'a location approximately 75 feet north of the
          proposed Well No. 2. Spear now desires to plug and aban-
          don Well Elo.1 (due to faulty equipment, aooording to in-
          formation furnished this office by Spear) and oontemporane-
          ously with the application to plug Tlo.1 desires:a permit
          to reopen and produce No. 2.

           The Connnissionhad allowed the drilling of Well No. lmany years
    prior to the application for and the drilling of Well No. 2. For the
    purpose of this‘opinion RU presume that permit for Well k. 1 was a valid
Hon. Olin Culberson, Page 2   (O-6603)



permit as no appeal is evidenced by the facts stated or in the file
in this case. We further presume that Spear was entitled to one well
as a matter of law to protect vested riahts. the location of such to
be determined by the C-&mission to prev&t &te    and confiscation, as
there is no indication that the traot of land was illegally subdivided.

       The concluding paragraph of the judgment above referred to reads
as follows,

          "This judgment is without prejudioe to any right
       of the Defendant, Angus B. Spear, to apply for a new
       permit to operate said Well No. 2 and without preju-
       dice to aqy right of the Railroad Commission tog-ant
       a new permit to operate said well Xo. 2 when and if
       ever oonditions have so materially ohanged as to au-
       thorize the granting of an exoeption to Rule 37 in
       this location."                 _
       We do not dean it neoessary here to discuss fullythe authority
and jurisdioti.onof the Railroad Commission relating to the production
of oil, but think it till suffioe to oite the aase, of Railroad Caamis-
aion VS. l@ncksr, 168 S.,W. (2d) 625 in which Mr. Justioe Sharp saidi

           “The statutes authoriee the Railroad Commission to
       handle the details relating to the production of oil
       and gas in the State. Article 6004, et seq., Vernon's
       Annotated Civil Statutes. The Railroad Conmission has
       exolusive original jurisdiction to determine the mat-
       ter of changed oonditions in granting permits to drill
       wells, subject to the right of appeal to the courts.
       agnolia Petroleum Co. V. Ren Prooess Production Co.,
       129 Tex. 617, 104 S.W. 2d 1106; Gulf Land Co. V.
       Atlintio Refining Co., 134 Tax. 59, 131 S.W. 2d 73;
       Brown v..Rumble Oil & Refining Co., 126 Sex. 296, 63 5.
       II. 2d 935, 99 b. L. R. 1107r The Railroad Conssission
       is given the power to determine prilaarilyall faat is-
       suss, that is, all issues that are not established as
       a matter of law: and to permit the aourts to pass upon
       a question not passed on by the Commission would violate
       such power. Gulf Land Co. V. Atlantic Refining Co.,
       dupra; Brown V. Humble Oil & Refining Co., suprah"

       And further in the Henoker case, the Supreme Court said:

          "Until the Railroad Commission has exercised
       ths:powers conferred on it by law over oprtain
       matters, its jurisdiation over such matters should
       notbe denied.*
Hon. Olin Culberson, Page 3   (O-6603)



       Cited in the opinion in the Wenoker case, supra, are authori-
ties which leave no doubt as to the exclusive original jurisdiction
of the Commission to determine the matter of ohanged conditions and
the courts~will not usurp such function.

       Inthe instant situation the Commission is called upon to find
that the plugging of the No. l'wll will oreate such a change of aon-
dition on the lease as to warrant the granting of a new permit at the
No. 2 location. The above quoted section of judpent aoknqwledges the
"right of the Conmnissionto grant a new permit to operate said 'IkallNo.
2 when and if .ever conditions have so materially ohenged as to authorize
the granting of an exowption to Rule 37 in this location."

       Under the stated faots the plugging of No. 1 Rotor will result
in the lease having no produoing well thereon.   This, in our opinion,
brings about a condition of ahange as contemplated by the interpreta-
tion placed on the statutes by the appellate courts. Whether the No.
2 Well will be identified in that manner or will be referred to as No.
1, or any other number, is immaterial as the fact remains it mill lit-
erally be the only producing well on the lease. In the Uenoker case,
supra, Justice Sharp discusses fully the effeot of numbering wells on
the same lease. It follows that the Consaissionhas jurisdiction to
hear such application and if it finds that the location of the now
existing No. 2 Well is one that will prevent confiscation andwaste
and a permit be granted, such a&ion will not, in our opinion, be in
oontempt of the Judgement of June 16, 1943.

                                            Yours very truly,

                                         #.TTORNEYGENEXAL OF TEXAS

                                         &’
                                            a/ Harris Toler
                                               Harris Toler
                                                  Assistant
APPRCVED SEP 12 1945
S/Grover Sellers
ATlORNEYGERBRLL OPTBXAS



Approved Opinion Committee
By WVG Chairman
