    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
