Roland Oil Company v. Railroad Commission of Texas
03-12-00247-CV
| Tex. App. | Jan 21, 2015Background
- Roland Oil Company appeals a Court of Appeals decision in No. 03-12-00247-CV arising from the Railroad Commission of Texas enforcement.
- The case involves whether Roland’s activities on an oil lease qualify as “Unit Operations” under the Unitization Lease and Commission regulations.
- The underlying dispute centers on Roland’s actions during a production “gap,” including testing inactive wells and maintaining flow lines, during which the Commission said operations related only to inactive wells.
- The Third Court of Appeals (Austin) held Roland’s actions could qualify as Unit Operations, relying on the lease language and unique facts.
- Appellee moved for rehearing and en banc reconsideration; Roland submitted this response urging the court to deny the motions.
- The court applied a two-step Substantial Evidence test to review the agency’s findings and rejected the Commission’s reliance on findings that Roland’s work was limited to inactive wells.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Roland’s activities meet Unit Operations under the lease and regulations. | Roland asserts its actions satisfy Unit Operations. | Railroad Commission argues activities were not Unit Operations. | Roland’s actions qualify as Unit Operations. |
| Whether the Court should align with Hall or other precedents regarding operations. | Precedent supports broader operations than Hall. | Hall remains controlling on minimal activity. | Court did not abandon or misapply precedents; distinguished Hall based on facts. |
| Whether the Court correctly applied the Substantial Evidence Test. | Court properly reviews underlying facts de novo for legal conclusions. | Court misapplied substantial evidence regarding production gap. | Court did not err in applying the Substantial Evidence Test. |
Key Cases Cited
- Bargsley v. Pryor Petroleum Corp., 196 S.W.3d 823 (Tex. App.—Eastland 2006) (affirmative evidence for operations under certain circumstances)
- Hall v. McWilliams, 404 S.W.2d 606 (Tex. Civ. App.—Austin 1966) (Hall involved minimal activity and pump operation to prevent sticking)
- Cox v. Stowers, 786 S.W.2d 102 (Tex. App.—Amarillo 1990) (illustrates distinction from Hall in minimal operations)