                                                                                   ACCEPTED
                                                                              03-12-00247-CV
                                                                                     3853909
                                                                    THIRD COURT OF APPEALS
                                                                               AUSTIN, TEXAS
                                                                         1/21/2015 8:13:12 PM
                                                                            JEFFREY D. KYLE
                                                                                       CLERK
                    No. 03-12-00247-CV

                 IN THE COURT OF APPEALS                FILED IN
                                                 3rd COURT OF APPEALS
         FOR THE THIRD JUDICIAL DISTRICT OF TEXAS AUSTIN, TEXAS
                        AT AUSTIN                1/21/2015 8:13:12 PM
                                                         JEFFREY D. KYLE
                                                              Clerk


                ROLAND OIL COMPANY
                            Appellant,
                         v.

         RAILROAD COMMISSION OF TEXAS,
                          Appellee.



         Appeal from the 353rd Judicial District Court
                   Travis County, Texas
               Cause No. D-1-GN-08-003472



   APPELLANT ROLAND OIL COMPANY RESPONSE TO
APPELLEE’S MOTIONS FOR REHEARING AND FOR ENBANC
                RECONSIDERATION


                    DARIO BARGAS
                     SBN: 01733600
                  BARGAS LAW FIRM
            1000 HERITAGE CENTER CIRCLE
              ROUND ROCK, TEXAS 78664
                  PHONE: 512-785-5955
                  FAX: 1-866-415-0828
             ATTORNEY FOR APPELLANT




                               !
                       TABLE OF CONTENTS

                                                               PAGE

Table of Contents……………………………………………………………ii

Index of Authorities………………………………………………………...iii

I.     Response to Rehearing Point 1:
       A. By considering the unique facts of this case, along with
       the express language of the Unitization Lease, the Court
       correctly found the operations of Roland Oil Company to
       qualify as “Unit Operations.” ……………………………………...2

II.    Response to Rehearing Point 2:
       B. This Court is not changing precedence regarding
       the Hall case………………………………………………………….2

III.   Response to Rehearing Point 3:
       C. Thirdly, the Court did not error in applying the Substantial
       Evidence Test.………………………………………………………..4

PRAYER…………………………………………………………………….5

Certificate of Compliance…………………………………………………...7

Certificate of Service………………………………………………………...8




                                   ii

                                    !
                      INDEX OF AUTHORITIES

CASES                                                             PAGE

Bargsely v. Pryor Petroleum Corp.,
     196 S.W.3d 823 (Tex. App.—Eastland 2006, pet. Denied)…………..3


Hall v. McWilliams,
      404 S.W.2d 606 (Tex. Civ. App.—Austin 1966, writ ref’d n.r.e.)…...3

Cox v. Stowers,
      786 S.W.2d. 102 (Tex. App—Amarillo 1990, no writ)………………4




                                   iii

                                    !
                           No. 03-12-00247-CV

                        IN THE COURT OF APPEALS
                FOR THE THIRD JUDICIAL DISTRICT OF TEXAS
                               AT AUSTIN



                       ROLAND OIL COMPANY
                                   Appellant,
                                v.

                RAILROAD COMMISSION OF TEXAS,
                                 Appellee.



                Appeal from the 353rd Judicial District Court
                          Travis County, Texas
                      Cause No. D-1-GN-08-003472



    APPELLANT ROLAND OIL COMPANY RESPONSE TO
 APPELLEE’S MOTIONS FOR REHEARING AND FOR ENBANC
                 RECONSIDERATION




TO THE HONORABLE COURT OF APPEALS:

      NOW COMES Roland Oil Company, Appellant, by and through

undersigned counsel, and respectfully requests that this Court deny

Appellee’s motion for rehearing and en banc reconsideration.




                                      !
   A. By considering the unique facts of this case, along with the express

      language of the Unitization Lease, the Court correctly found the

      operations of Roland Oil Company to qualify as “Unit

      Operations.”

      This Court ruled that Appellant’s actions to satisfy the Commission’s

regulations are essential in operating the lease and producing regarding

active wells. (Roland Oil Co. v. R.R. Comm’n of Texas, No. 03-12-00247-

CV, at 13 (Tex. App.—Austin Aug. 29, 2014) (mem. Op.).

      The Commission has incorrectly interpreted this Court’s decision with

respect to Unit Operations. As stated above, the heart of producing oil and

gas is compliance with the Commission’s regulations. Simply put,

Appellant cannot produce the lease in question without testing the inactive

wells because of the Commission’s regulations of plugging. (Roland Oil Co.

v. R.R. Comm’n of Texas, No. 03-12-00247-CV, at 13 (Tex. App.—Austin

Aug. 29, 2014) (mem. Op.). Thus, this Court did not negate the full concept

of Unit Operations.



  B. Secondly, This Court is not changing precedence regarding the

      Hall case.

      Appellee has indicated in their Motion for Rehearing that Appellants


                                       2
                                       !
actions did not constitute operations based on well-established oil and gas

law. However, in Bargsely v. Pryor Petroleum Corp., 196 S.W.3d 823 (Tex.

App.—Eastland 2006, pet. denied.), the court indicated that activities under

certain circumstances might be considered “operations”. This leaves the

question open as to what circumstances these activities will be deemed

“operations.”

      Appellees contend that this Court is not following precedent, relying

on the previous ruling in Hall v. McWilliams. However, the case at issue is

different than Hall because the facts in Hall indicated that the actions done

by the operator was minimal, i.e, starting the motor on well once a week and

pumping the well for about five minutes to pass fluid. 404 S.W. 2d at 609.

In this case at hand, Appellant was out on the oil site every day, performed

flow-line and electrical repairs on the Lease’s active wells (“its just a matter

of continuous operations”), and monitored the flow lines and tank batteries.

(Roland Oil Co. v. R.R. Comm’n of Texas, No. 03-12-00247-CV, at 12 (Tex.

App.—Austin Aug. 29, 2014) (mem. Op.). The actions of Appellant clearly

show more than minimal work as opposed to the Hall case. Further, in this

case, this court correctly asserted that there was evidence that Appellant’s

work and maintenance was extended to the whole lease during the gap in

                                      3
                                          !
production. Id Therefore, making this case distinct from the Hall case. In

the Hall case, the operations performed were done solely to the inactive

wells for the purpose of keeping the pump from sticking. Cox v. Stowers,

786 S.W.2d 102 at 2 (Tex. App.—Amarillo 1990, no writ).



   C. Thirdly, the Court did not error in applying the Substantial

   Evidence Test.

      Here, Appellee claims the Court erred in applying the Substantial

Evidence test by improperly weighing the evidence against the

Commissioner’s findings. However, a quick overview of the court’s opinion

in this case shows why the Court did not deviate from the correct standard of

review.

      In the two step Substantial Evidence analysis, the court must make

two inquiries: (1) whether the agency made findings of underlying facts that

logically support the ultimate facts and legal conclusions establishing the

legal authority for the agency’s decision or action and, in turn, (2) whether

the findings of underlying fact are reasonably supported by the evidence.

Roland Oil Co. v. R.R. Comm’n of Texas, No. 03-12-00247-CV, at 7 (Tex.

App.—Austin Aug. 29, 2014) (mem. Op.) In this analysis, although the


                                       4
                                       !
Court may not “substitute” its judgment for that of the state agency on the

weight of the evidence or questions of fact, it may, concerning the first

inquiry, review “embedded questions of law” de novo.” Id. Thus, allowing

the court to review agency questions of law without a presumption of

validity under the substantial evidence test, as it did in this case.

      As for the second inquiry, the Court, in its review of the findings by

the Commission, found that no evidence was presented by Appellee to show

Appellant’s performance during the “gap” in production was solely

performed on the inactive wells. Roland Oil Co. v. R.R. Comm’n of Texas,

No. 03-12-00247-CV, at 13 (Tex. App.—Austin Aug. 29, 2014) (mem. Op.).

Coincidently, the Commission based its decision on the reliance of its own

finding that Appellant solely performed Unit Operations on inactive wells.

Here, the Court reasoned under the second inquiry, that because no evidence

supported the Commission’s finding, the evidence couldn’t reasonably

support the finding.

                                       PRAYER

   In conclusion, this Court found the operations of Roland Oil Company to

qualify as “Unit Operations” after considering the unique facts of this case,

along with the express language of the Unitization Lease. The Court did not



                                             5
                                         !
err in its application of the Substantial Evidence test, and so Appellant

requests that the Court deny Appellee’s motion.



                                                      Respectfully Submitted,

                                                        /s/Dario Bargas
                                                        Dario Bargas
                                                        SBN: 01733600
                                                        Attorney for Appellant




                                           6
                                       !
                         Certificate of Compliance

Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I certify that this

computer-generated document, excluding the contents listed in Texas Rule

of Appellate Procedure 9.4(i)(1), contains approximately 850 words and

therefore complies with the word count limits set forth in Texas Rule of

Appellate Procedure 9.4(i)(2)(D). I relied on the word count of the

computer program used to prepare the document.



                                                    /s/ Dario Bargas
                                                    Dario Bargas




                                           7
                                       !
                           Certificate of Service

      On January 21, 2015, a true and correct copy of the foregoing

Appellant Roland Oil Company Response to Appellee’s Motion for

Rehearing and for En Banc Reconsideration was served on the following

counsel electronically through electronic filing service provider by email:


Anthony W. Benedict
Assistant Attorney General
SBN: 02129100
anthony.benedict@texasattorneygeneral.gov


Elizabeth R.B. Sterling
SBN: 19171100
elizabeth.sterling@texasattorneygeneral.gov


Priscilla M. Hubenak
Assistant Attorney General
SBN: 10144690
pricilla.hubenak@texasattorneygeneral.gov

Linda B. Secord
SBN: 17973400
linda.secord@texasattorneygeneral.gov

Steven Lord
SBN: 24074618
Assistant Attorney General
steven.lord@texasattorneygeneral.gov

                                                    /s/ Dario Bargas
                                                    Dario Bargas
!



                                       !8
