             OFFICE     OF THE   ATTORNEY       GENERAL   OF TEXAS
                                    AUSTIN
 GROVERSELLERS
 Al-rORNLY
        GINERAL                                               hl



Non. 01111 Culbarson, Ohalrram
Railroad Coxnlaoion 0r Tams
kuatln, Toxaa

1)4ar $1~                         O&dnlon No. O-7046

                     ..~_-
                ,,     ‘\
            ,,/:




                                               suah sroaptlonr in
                                        rant      only ona we&l to




    ~411 ohall b4 lQcret4d.                               /


    Hauklna town8lt4.
    applloanto ooto
    or   th0   0m4r     or
Hon. GlIn Oulberson - ?sgs 2




      arter  dlsoorsry. llwir8siainlngtwo lots w4re 14assd
      to oth4r parties, also 8rt8r  a4  Ol4oor4ry. All
      lots am adJoinin& sad oontiguous.
              wn4    or th4   appiiasnt*8   188848   rro81   th8   origi-
      ml omer or ths rour eubtllvldad lot8 Is prior in
      point ot time to th4 14ese on th4 oth4r two lots.
      Thlr eppllsant oontends that ths les80x-sand.
      orl@.nal owmrs oi th4 rour lots havs s right to
      at least one well on said rbur lots (The Ossmlsslon
      Is agreeable  to thla oontantlon but he8 hersto-
      tore retused sppliostlonstar oae no11 011essh or
      the two subdlrlbedlots); thst their   144se, being
      prior in point o? the   to tk4 leas4 on the other
      two lots, they (the applioants) are entItle to a
      prior right to a permit as ocmpared with those
      holding a subrepuentlease on the other two lots.
           '1 wish to ysln rapeat that the Oosuslsslon
      has held that oaly one well saribe drlllsd on
      these iour lots, and we have not berm oonsiderfa#
      the louatlon or ths well anywhere other than as
      shore-mentions&.

           *At ths NQINIS~ oi applf4ants,the tOllowing
      law question is propouadedr
          wC,%LGTIGNz rdlhere8 tM4t    of land is segrb-
     gat4d In areas *hi&# oannot be drilled exoept under
     exoaption to Rule 37, 4008 the holdar ot th4 rirat
     lease granted (oonslderatioxi   of waste exaeptad)
     hsrs a prhr  right to a perthit   uvef th8 holder or
     a uubsepusnt      lease?*

             The desorlbsd iaot situstlon 18 an ultLgat4 resbilt
or the applisation      of Rule 37 and Its allowsble oxosptloasto
the Hawkins Fielilor East !B~xa8. 3~4 ownerof the four lets Is
entitled to but one w4ll. He oannot expand this right by &
voluntsry rubdivisionu&d thereby ozwita a rl6ht in hiaseli,
of in a~ lessee, to an adbitlenal wall. Bun Oil 0smpan.yVs.
Railroad Commlsslon,68 9. a. (24) 609. Nevertheless,the
o wner -lesso r h a d le4n rit to qndt    an‘011 *ad gas lrase to two
or the lots to one lessee,      and.   at a lst4r dsta, an lddltlo a a l
Hon. Olin Oulknoa   - Page 3



lease on the other two lots to another lessee and without any
exDMS* OOnV%yMoo Or his right to thr on4 wall to either lessee.
% assume that the 011 and gas leasae to th4 two lesseea ~ployed
the same and standard form with respeot to QrIlllng rights.
          Extenslre researoh Indloatesthat the preolse question
at hsnd.ia one or rlrat impression. Is the sane of Railroad
Ods*ioR,    et al, *a. MillFr, 165 9, W. (26) 504, the court
8p~oifioallYreS~:m~d the question of the.legal erred or the
two oIr4umstano4s: (1) a small trsot whloh osn be dorrloped
only under exseptlon to Rule 37 to proteot rested rights, and
85 SUSh entitled to but on4 well; and (2) the hota of a prior
and OS a subsequentlease on subdltIslonsof the tra4t without
an express oonvaysnoeby the owner-lessorot the right to the on4
lllswable well.

          W4 are of the opinion that the legal etrest of the
first lease in relation to the seoon&, in the respeots about
whloh you lnqulr4&-wheth4r desmibed aa an Implied conveysmoe
of the lesaor*s right to drill th4 one null, or the granting
to the first lessee or a prorerentlal right to drill suoh well,
or otherwIse--1sto gir4 to ths first lessee a prior right to a
permit to drill as against the holder of the sub8equentlease.
Th4 pronounowmnt or the Court ti Edgar, et al, vs. Stanollnd
011 & Gas Gompsny, 4t al, 90 8. W. (26) 656, writ refused, that
a subsequentlessee "4ould insure no greater rlghd under the
law than that vest4d in his lesaors~ Is persuaslYe by analogy..
          It Is believed that frarpany approach to thb question,
the first lsS444 la in the stronger legal and oqultableposition.
For example, under the applloatlon of'th4 imputed notioe dootr$se
(see 31 Tex. SW. pp. 363, 3641 Bsloher Land Mtg. 00. vs. 01-k.
238 s. W. 685)--iand 'ehsfaotcand 4lrWWt4nO~are      smple, in
0~ opinion, for its a plioatlon--theseoond lessee is ohar ed
with notio4 of the raot or the first lease, together with de
sorollary ra4t that the lessor had pr4TIously dirested himuslf
of auoh‘rightsas wm     granted In the 011 and gas less4, On4 of
whloh Gas the right to drill.
           Therefore, under the faata stated in your Iauufr~,
,md expr4sslylimited to fmoh raots. Your we8tion I* snrmr4d
 In the afflrmatire.
         we express no opinion upon t&e question of th4 right*
or we moon& leasee in event or dralnaao or hi* leasrhold by
Ron. Olin Culborean - Page 4



the first well (sea Magnolia Pet. Co.~rs. Blankenshlp,et al,
85 Fe+. (2Q) 5531, or upon any questiona whioh might subsa-
quently aria4 oonosrnln(r.
                         additionalwell8.
                                    Yours very truly
                               ATTORNZYOgagRALOFTEXAS


                               BY
                                               Asslstanf
