                                 +Iarch      18, 1957.
                                          .,,                    ,.


Honorable .Richard Slack,        Chairman            Opinion   No; WW-67
Oil and Gas Committee
House of Representatives~                            ,,Re: To what extent and in what
Austin,’ Texas                                             way does Section 7 of H.B.
                                                           496 change.Article   6066c,
                                                  ‘I
Dear   Mr.    Slack:                                       Revised  Civil Statutes ?

              In reply   to your letter   of March       5, 1957, which we quote in
part   as follows:

             YWill you please ascertain  to what extent and in
        what wag Section 7 of the proposed bill changes Article
        6066c, RWiS~d Civil Statu@%3.“.

we offer     the following   opinion:

            Article  6066c, V.C.S., provides that the Railroad Commission
may approve agreements        for the construction    and operation of cooperative
facilities necessary    for the conservation    and utilization of gas, including
facilities for extracting   and separating   hydrocarbons      from natural gas, or
casinghead   gas.   This statute declared    that, such, cooperative   agreements
are intended as a reasonable      exception to the Anti-Trust      Acts.1

             The Railroa~d Commission      can approve agreements          for the
construction   and operation of cooperative      facilities    for the extraction  of
liquid hydrocarbons      from gas and the separation        of such liquid hydrocar-
bons into butanes, propanes,      ethanes, distillate,    condensate and natural
gasoline without any additional processing        of any of them, and Article
6066~ specifically     provides that no approval shall be given to agreements
providing for cooperative      marketing  or +efiningN2        of crude petroleum,
condensate,   distillate   or gas or any by-products       thereof.


1Title 126, Revised Civil Statutes, 1925, as amended;                 Chapter   3, Title   19,
 Penal Code of Texas, 1925, as amended.      ”
2Article  6066~ provides   in part “the extraction of liquid hydrocarbons    from
 gas and the separation    of such liquid hydrocarbons    into butanes, propanes,
 ethanes, distillate, condensate and natural gasoline without any additional
 processing   of any of them shall not be considered    to be refining.*
Honorable      Richard   Slack,    Page   2 (WW-67)




               Section   7 of H.B.   496 is quoted as follows:

                “Sec. 7. Agreements       made in the interest of conservation
          of oil or gas, or both, or for the prevention      of waste, between
          and among owners or operators,          or both, owning separate hold-
          ings in the same field or pool, or in any area that appears from
          geologic or other date to be underlaid by a common accumula-
          tion of oil or,.ges,, or both, and agreements     between and among
          such owners or operators,        or both, and royalty, owners therein,
          for ,the purpose of bringing about the development        and operation
          of the field, pool or area, or any part thereof, as a unit, and for
          establishing   ,and carrying    out a plan for the cooperative    develop-
          ment and operation      thereof, when such agreements       are approved
          by the Commission.       are hereby authorized    and shall not be held
          or construed to violate any of the statutes of this State relating
          to trusts, monopolies,      or contracts and combinations      in restraint
          of trade.”

             The effect of the enactment of Section 7 of.H.B. 496 would be to
grant to agreements     made and approved pursuant~ to H.B.. 496. immunity from
the Anti-Trust   laws of Texas.

              In our opinion      nothing in Section       7 of H.B.   496 repeals    or affects
Article    6066c..

                                     SUMMARY

               In. our opinion nothing in Section,7          of H.B.   496 repeals
               or affects Article  6066~.

                                                      Very   truly yours,




                                                  ,WILL- WILSON
HB:tiw                                             Attorney General

APPROVED:,
                                                      BY     -
OPINION      GOMMIT,TEE                                    Houghton    Brownlee,     Jr.
H. Grady     Chandler, ahairman                            Assistant
