Phillips Petroleum Co. v. Railroad Commission

269 S.W.2d 587, 3 Oil & Gas Rep. 1773, 1954 Tex. App. LEXIS 2671
CourtCourt of Appeals of Texas
DecidedJune 2, 1954
Docket10224
StatusPublished
Cited by2 cases

This text of 269 S.W.2d 587 (Phillips Petroleum Co. v. Railroad Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Phillips Petroleum Co. v. Railroad Commission, 269 S.W.2d 587, 3 Oil & Gas Rep. 1773, 1954 Tex. App. LEXIS 2671 (Tex. Ct. App. 1954).

Opinion

GRAY, Justice.

This a Rule 37 case. Appellants have appealed from a judgment sustaining a permit granted to appellee, Selwyn S. Smith, authorizing production of a well in the Yates Oil Field in Pecos County. The well is located on a .64 acre tract of land, 20.7 feet wide, north and south, and 1320 feet long, east and west. The well was drilled under a permit considered and held invalid by this Court in Shell Oil Co. v. Railroad Commission, 247 S.W.2d 448, error ref. In that case we held the .64 acre tract to be- a voluntary subdivision within the meaning of the applicable spacing rules and cancelled the permit.

Prior to our above holding the well was drilled and produced but after our judgment became final the well was shut down.

*589 Thereafter Selwyn S. Smith applied to the Commission for a permit to produce the -well on the ground that it was necessary to prevent waste. The permit was granted “under the waste prevention powers of the Commission.”

In the prior suit appellants and Ohio Oil Company, who is not a party here, were parties. That cause was tried on a stipulation of the parties made in the trial court which is fully set out in our former opinion .and to which we here refer, however we deem it advisable to here quote portions thereof:

“It is stipulated by and between all of the parties to this cause for the purpose of the trial of this cause only that no issue of whether the permit is justified as a permit to prevent waste is involved in this case; that the permit was not applied for or granted upon the theory that the well is needed to prevent waste and that this cause shall be tried as though the order of the commission recited only that the permit is granted to prevent confiscation of property, * * * ”

The stipulation further provided that the only question to be decided was whether the .64 acre strip of land constituted á voluntary subdivision; that if it was decided it did constitute a voluntary subdivision then the judgmet should be for the plaintiffs and that if it be decided it does not then the judgment should be for the defendants.

We will herein refer to the well in question as the Smith well, to the permit considered in our above opinion as the first permit, and to the permit under consideration here as the second permit.1

On examination of the above mentioned stipulation and the opinion holding the first permit invalid shows that the opinion was limited to the issues of voluntary subdivision and confiscation and that the issue of waste was not considered and was not determined. The judgment rendered was in keeping with the stipulation that if the .64 acre strip was adjudged to be a voluntary subdivision-the judgment should be for the plaintiffs. Here the permit is grounded on the issue of waste which was not involved in, but was expressly excluded -from, the former opinion and judgment for which reason that judgment is not res ad-judicata of the different issue of waste here presented. Buckley v. Atlantic Refining Co., Tex.Civ.App., 146 S.W.2d 1082, error dism. judgm. cor.

The stipulation, supra, the judgment and the opinion cancelling the first permit rendered and decided on the basis of the stipulation does not show an abandonment by appellee Smith of his right to apply for and sustain the second permit since there is nothing to show an intention on his part to abandon such right. Humble Oil & Refining Co. v. Cook, Tex.Civ.App., 215 S.W.2d 383, error ref., n.r.e.

When appellants’ claim of waiver of the issue of waste by appellee Smith is considered in the light of what wás stipulated, what was decided and the judgment rendered in the former opinion it cannot be Said that Smith waived his right. thereto. Appellants were parties to that proceeding and the stipulation. If appellants desired to make an issue of waiver then they assumed the burden of proving it. The record does not sustain such burden. The Praetorians v. Strickland, Tex.Com.App., 66 S.W.2d 686.

Rule 37 authorizes the Commission to issue well permits to prevent confiscation or to prevent waste.. These terms are separate and distinct and'have no reference to each other. 31A, Tex.Jur., Sec. 407, p. 689. And the fact that

“ * . * * a tract of land is a subdivision within the meaning of the rule last mentioned, is no impediment to the granting of a well permit thereon as an exception under Rule, 37 to prevent waste. . In other words, the rule pertaining to subdivisions has no application to well permits granted to prevent waste.”

*590 Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73, 83.

The prior judgment adjudging the first permit invalid because the .64 acre tract constituted a voluntary subdivision and not entitled to a well to prevent confiscation is not contradictory to a judgment sustaining the second permit granted to prevent waste. Appellees are not judicially estopped to now assert that a well on the .64 acre tract is necessary to prevent waste. 26 Tex.Jur., Sec. 449, p. 206.

The evidence shows that prior to the time the Smith well was drilled there had been drilled four wells on tracts of land adjoining and immediately surrounding the .64 acre tract which wells are located from 200 to 460 feet from the Smith well.

Two expert witnesses were called to testify, one by appellants and one by appellees. Thése witnesses differed in their opinions as to whether substantially all of the oil to be produced by the Smith well would be produced by the four surrounding wells and by other wéllá in'the field. Appellants’ witness was'óf ’ the! opinion that .the oil would be recovered by the four surrounding wells and appellees’ witness .was of the opinion that it would not. They seemed to agree that prior to the drilling and completion-of the'Smith well there was nothing unusual about ■ the particular area of the field in which the .64 arce tract is located; that no one had any knowledge of what the formation -would, be. when the well was drilled, what to expect, or whether it would be more or less permeable, and that the drilling and production history . of the four existing wells surrounding the Smith well revealed nothing unusual about the area prior to the drilling of the Smith well.

Appellees’ witness considered the facts revealed by the drilling and the production of the Smith well in connection with other matters and testified that the reservoir from which the Smith well was producing is not in effective communication with the reservoirs of the' other four wells and based his opinion ón various reasons: (1) that the Yates Field is regarded by the Commission to be, and factually is “the most regularly irregular” field in its jurisdiction. See Standard Oil Co. v. Railroad Commission, Tex.Civ.App., 215 S.W.2d 633

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269 S.W.2d 587, 3 Oil & Gas Rep. 1773, 1954 Tex. App. LEXIS 2671, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-petroleum-co-v-railroad-commission-texapp-1954.