Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Eonora::le Baacan Cllee, ikge 3
provlaiona of such statute woul& expire upon th4 expiration of thras ycwrr after ite dete, wlaoe~ 011 and gas had been prodaced 1U pt%yhg C$6+Btiti48 prior t0 thb 4XpirOtiOn Or three year primary tomb
As we have haretdf'qre steted to you, the et- Sect-wf Gaaat.4 Bill Xoo. 53 OS the 46th Le&lsture, Aatt 19m, WW XiOt VOBls~&W&? Or di8UWWd ill fOZ%U<~~ OUX op%nlon Hw. C-QCO, Zor the roeaona oet forth In that ~iAiCUh
hrtar rurther 4oasld4ration 0r a&don 01010, we BOW muffina thrr ~lso~e ant? hold thet in nuoh opinion Chapter 13, Aots 1930 Uat ~irlaturs, Vernoa*o Anndated Statutw , Art&l* @?0!5a ue.8 prop6rly conartrued a8 authorin- Lag the Bond ror I.aaeo of Prleon Leads to lmvw oil a& ga8 le6608 for ptiPrksp:;tsmui or three pears oaly rather thaa for primiry t442rasar fire y4erur
v.ay l4450 proda%* for A rim y4ar prlmry tam and hatetafora sotero8 Into by the Board ornate6 by 3:enat.e Bill ITa. 'I?Q Chapter 13, Acts ldourth Ca,Lled Bumlon &arty- fir& I.a&iislatire (Art.BeOSB), ahall not be aowldbr4d teminated rallurc produce oil cm (;as WtthiA three pkaro from the dets ot such lease, and any auah loaoe Is horaby an6 valldntea ln 80 rar and on& f30tiimt3a in PO fsr a0 trllurs'to produce 011 Or g44 xlthla thr44 yslsrs rr4aa ht.4 thereof iIs 00x+ o~rnad~ aad any such l~oe shall be in tQPQ6 ant3 4ff4vt Sor five ysara Ix0m it6 dste ti otherdse ln &eod ets~ad%w ikAh all- othtw terau end ccnr;ltlone of ouch Xa~neas and %h4 lew a~ glLaebl~'thereto here boco heretofore artd are hereafter a& ad terrl445 out** *4 . . 4 "It 18 ageod that tNa lwi:ia shnll rcrmln in tull fame and &foot Sor a tow or" five (5) yearo, from the date hereof, and R8 loa& thereafter us oil gcs or GaBhh&- hoe6 gm3, or slthar of thcfd, is prodwed irap eaid land in aomerolal puantlt%oo, chb LlW3(98."
It thus appeara that Senate EtU. 55 clear4 has applloation to the oil end &as lease In quaetion, been exsouted prSor to the sffeetlre stid lease hati date of 8wate B xl 8s Mb arkid 16~'0 hnvw 8ZQlW694 sqovfdfid for 83 iiV8 gear priaary tsnn.
The queetion 1s thus presantod as to whether no% &n&lb Ezi3.l 5% Ia oonntitutlonal~ In this sob xlectioa, it 18 asterial to poLrrt out thtt the %mo* on ita ftkae parports ta be for e five yoor primary term a&l that. the delay rentals as prsvlded HOE Ln the laese have bwn palU by ,the lesme and eackgtc6 by the elate iar 8 perlad or ill+8 yearsg hoQm+t, lavs au it exbted on the data of the iwceoutlon of thlin &am et%- thorlzed the Board for Leans of Texas ~lsan Lrrndr to exetmts a lease far a prlawy tea of three ymra 02&y. csasc the Is~~elslttlrm thercaitor oonetltu$onaUy TatirJI 5ml co5firl3 Boata'* act La emxllt an 011 and gas l0aee ior an orl&ially ununtharlzeQ pr % ry t*rm or five yea-87
A ooreful er&tloa of the stithtmltled 0~3 this guestlrrn ha8 bqtelled us to the conolturlti that the Le~lalature has aot sx$wmkod oanstitutloneil ll&te Ln aaEctlA~3sprpteBfllss.
-1t la t34ttlBd aa the law of ttia 9tCte * In feet, la the qalmrsrrel rule - thnt what it *5 Honorable Beeoom Glleer, Pege S
the Legialsture oould hare authorized _._ _- In the firet lnataw36, it 08x3 ratiry, xr at the time of retiilaation, It hats tha initial authority to authorize.* Andor- aOIL COUtr Road Dl6trlot HO. 8 v. Pollard, 116 Tex. 547, 296 S. W. 1062, 1065 and authorities thare cltad.
Other dsoialona whioh amounoe aml marrim above quoted rule are: Andamon County Road Dlstilot No. 8 v.
POlh?d, 116 Tax. 547, 296 8. W. 1.0628 Tern Green County v. Yoody (sup. at.) 259 8. w. 661; Nolan County v. Stat.- 8Zl Tax. l82, l? 8. 1.
8381 State v. Bradtori, so s. w. (2) 1065; Charlotte Harbor C HOEthSm Ry. Co. vs. Wallea, 260 U. 8. 0, 4a 3up. Ct. 3, 67 L. La. 100; Kanaaa city Southarn Ry. Co. v. Road Y&prays- mant Dlatrlot No. 3, 866 U. 8. 579,.45 8. 0%.
13@, 69 L. Ed. 33%; Aaderaoa County v. Santa Anna, 116 D. S. 356, 6 8. at. U5, 29 L. Ed.
693; Belles ‘I. Brlmfleld, I.20 U. 8. 762, 7 5. Ct. 736, SO L. Ed. 786.
In Anderson Uounty Road Dlatrlot !?o. 8 to. Pollard, aupra, the Suprcma Court of Tome, in dater- minim7 whsthar or not tha LegZalatura’ uoold. oonati- tutlonally ratify and validate an lllagaX bond iaaua, stated:
*The general and eatabllahed rula in, what the Legislature oould here authorized in the fir8t lnatanoe it can ratify, if at the tlma of rrtiiioation it has the initial authority to authoriea.” Citing oeaaa. In this Stata %re thus
All of the authorities in aocord in holding that tha above quota4 JXl;tlhzmlY established as pf rule or dsolalon in Taxiis.
tby,va are other daolslon8 by tha Texes’CotWie whloh wk. exoeptlona to the above 8tatsd ml.6 In osrtaia aituatlona, po auoh situation la preaanted in the matter6 in@.Te~ It remains for ua to determine whethar Or about by you. not auoh tile has applioatlon to the oiroumatanoea under
a
Honorable besaom Glles, Page 6
OxamimtIgtl 80 66 to valtdata 8nd aaka~#aatItutioaal Sannta 811193.
%a belIava no 8er1a8 qUe8tiOn can be ralsad a0 to the 0218kIW~ 0r the ~@i8~ttrrcr'8 ower nad au- on the date or tam exeoutloa 0r tL laa8. in thority tbnt aa? pusstion, to provide, if it had 80 doaired, lease areoutad by tha Beard ior Laue oi %ZB8 Prl8on Lands should ba ror a primmy tam 0r ma yoar8 ratlmr thalp three year8. Ho &UW181OB 18 tOLUld ill the COMti- tution now, ~nor W68 them any prowlSha in the Oon8tl- tutlorr. upon date oi the l xmautioa of th8 lasso whioh would pwhlblt n iho year loa86. to aot under the autbarity The Beard, purporting
oonhrrad by Chapter 13, Aot8 1930, 18aluQ a lanaa rhleh provided ror a fir0 year primary term rat&or thaa, 8 three rear priparf term, and rental* w6re padA th8rwzder r0r a period of ii l years. The Ia(Zi8lrtruu. in lP50, br peas- age 0r hatate 3 llr 5s. ol*arly irrtea6od and 8tteapted to 188&4g a rho per telidata motion of the Bard rather than a three Jeer leaso. E", hirr,umlortha above quota4 autharitla8, we Wllava, tha La6l8lattPM hart W Ipower to do. Bill 6% 8-1r eMS1~ aa ratl?lu somta 69 origiaallj unaatborlaad sot oi a board 80 as to ralldata that
initially hers autborixe& rentals provided ior under the lea80 euautedl by *ho Board hawe bean paid the 108a43e aad CreOept~ by the Stst.8 In the oxaot manner provldad for by the loaaa. Thua, no ,qmatloa arises aa an unoanatltatleaal Qut or disp08al of State 1~4 by the.k6lslature. %e muat, th8raiore, oopoluti thet asnate btll w ia B aoautittl- eMrOi80 Of the ~~i8ht~'cl 0al.M t0 SOaiirrp tiOMl and ratMy an aat 0r the Board r0r Lease Oi .Tezlla Pria~n LamIs in 18aohg tha original 011 and $88.:lears here irtrolted, end that auoh rtatute oparate8 to aOtapd t&o &il%Ur tOl%i oi the lMB0 ti Qka8tiOA Mtti ti&l&$Lt, QrIl 16, 1960.
You further request our oplnlon a8 to the pro- sent 8tatua of a lea60 *where oil and
qUS&%ti~8 18 diMO#FOd Within th0 Fl' lease,bat thereafter pzwdaotiop eMa iOr E p~iO6 OS *7 Honorable besoom GIlerr, Peprcl 0
90 daya or more b4OWl88 or the 4oll4pee Or easing or for other r4daon8 bqond th4 ooatrol of the opuetor.*
kaoording; to the atrtwnto me4e b tb 1au.e to the Boocrr4, the crl1.l~ oi 8 wall on the i l em in qoer- tioa 148 bqmn on %8roh 6, l@SS, an4 tJontlmie4 until hpzll 10, 1.939, nhen, at II depth o? 881M tit, a nn4 we8 die- oovwob whloh flowed an l etlwte4 Tut ailllor, oublo f-t or gae r day au4 a sukmtantl8l rolumm~of # degroo gFat%ty oil. x wall flowed oontlJiuousl~ ror 0 to 8 hourr aftor in tlm bottom oi th4 well whioh about 40 feet of the 088M ool%apsed. Lb88M &ate4 that ha b8MbdietdJ thW48~F eratloaa to reaontlitiontho wmll,tryIng to roam wm UB4U t e oeslng’~ whloh otiort oontln~ad T for ea~~~tr~ in thi8 er0ti th4 ie8808 rtmtad that miing ~rp?$ti beak to a man4 et a d&h or qgrexinllte~ (woo feet, whloh l and had pvlou81~ been oarad, an4 ~~848 8 ooslg;l@tion in thl8 81%n4 et 8 4epth O? -S Wt. 'fhie Oop- pi0tion 000tur4a QLL 816~ 13, 1939. The WOU, hb en imitiel flow or approxiwtely e4 barrel@ pr horn: Q#A 8 l/P 4hek4 an4 royalty on euah oLl wee paid to end mooopUd by a a4n4mi ~4 cjifi00. T h4 1~8~ ate4 4 that l ftmr UI h e urm 0ll rbbw, the flow wlta Stopped by water mnorO8OhWS 8ti(t thet efforts wem:anOe to stop tha rater ?Mw wlth @emat. Mtor oewnt wee applied, tha au- 88V8rOt4 tlmea but that thm lO88m -8 orUbl8 t4 N8tOF8 we8 reporrormted four the flow o? oti from thlm mand. The lem~e ateted that ho t&M oonolubd to s&detrtiok th4 484lw ia 8n SffWt t0 484UF4 pFodu4tlon from the 8889 f44t lsrrlg that thuuatter tha MOOCUtt4~d at6d*pthOf 888vioOt 4mdU48 fb,o~a%~t; that well warn aerried ln the Vlakebatrg 900 or.800 feet 4owapooraiiralE, b4ginnlJwJonJoly mand;thet 8nm-4 10, 1939, 44~843 the hole to ml- BF 88~ ia ruiaing 4l.l of tha &lB~dFl~~~d @z&meking it irud&bl* to at-
fams~ mtahd that an Zeal wti44 ?rci the Boar4 thet it w&A ho a wethg op JUlr ZO, 1939, at whioh tSw 8tatmm et tha tieme rrQoZd $8 ooneld4re4 and that further dstelopmeat bad been 4~lwe4 arP8itw the outooar of thl8 M~X'$.I&& f%ba* Pent rwh wMd.ng of the ROUd, the Board nqWmt~,b #i 8 1 0QuoO 88 ta th4 gm8tmt 8tatu8 0r thi.8 ~WIU.
In eondde~ t&4 qwatian *i to wh4tihr 01: not ?ih4 1~38~ in qUft8afeQt &48 taekb ip th0 x&&t Of the 8teStePaZit8 eet rorth above, We mud fir& tbtete it l* thet
not within cur pravlnoe to deolde ðer or not such stetr.zxmt.6 rcc rdiqc the alelaW d.isoovtrp of 011 and the In drllllne and atteaqtlog aubrcqusnt 01uimA 6:li@a1cs ciec*elop the lease in ~tles~~on, mtatb tbb aorraet r84L8 48 they eOtUslly CO::Urled. IXl OUT OF:lniOn the E~oald for &ase cif '&rsil kriacn Lands 1s tba proper au- tbwlty to make B primary determination m to tbe'aotuel r84tS .b:ch eriat with rererenae t6 tb* tine or bi84OVbry Or oil Or @.a%, sad ths dill&em5 thereafter 4Xer4i84d by PUZPOSSS th4 ia 0ttbi6ptiap 148Se4 that Or thi5 OtidCYJ COlJ, wb a88~4~4 tic prOdUo% the ~?a%. [4] oorr44t th8 *Or mtet4raint of the r44t8 h48 bean a*ba by the 14884t. Muklrrg 4u4h 488U.EptiOn, it BpgenHl that tb4 i48846, Witbln the rim year piwary t4rz 0r the 104se, di8OOV4XV3d and pro- duO4d oil and e48 Ln &'cyl~. quantitleai thet rOUorlp0 6 Or 8 hoUZ-8 Or 8UOh produotlan, the Oib8iIl& in the ho& 4Olls~SOd~ tb8t thb hOl4 W&8 plU&&ed iOr B dimt.aBM ot epprorlar,t;sly 447 feet and ths ~~11 w41 then 44aplet44, On %8y le, 1%?#9, UQ a PrOdUOCr Or Oil and ga8 ia pying quantltles~et e dspth or 8300 rout; w4ts:- aam484hwnt aade it impomaible to aontinue this 15tter production for pore than 18 houra, the hole bein ruined by u~npraaedented riOOd8r
~mrualn~; t&et 011 WC) dieoovored ad aodwed In papln4 quantities on April lb, 1999, War the term8 or thb 14884, 1e8444 beoemo Ontitled t0 hold muah 14448 r0r am lone theraatt4r a8 oil and/or gre wua p06u44a in '&he qu48tlon EQu0 pre0ontsd 18 as to pap- qucantltl44. the brr40t 4r 4 tbmporery oesaatlon 4r produotlon 04~844 by oollaped 0581ne, iioOd8 and Othbr laatt4r8 be)and the QOu- tr0i 0r th4 mi~bb.
The law in Tsxss 18 app6raatlX -11 Settled to 4rf44t that. S t4mporary csseetloa or ;rrodwtlon 44use4 olrotmstsncerr oYer xhioh 'l48544 beta no aontrol do48 the 14644 ii the 148844 In (3ood wt temlnute f0rrbit relth u84m neaonable dl.ll~enoe to r48UMJ yro6uOtiOci. Thb Furration under 4cmeideretlon me de4ld46 i.n ?;~4fb@r4ugh V. Hew Domain Oil &, Gas Comply, Ecl6 6. '8. 391 (Writ die- ml88ad) w&era th0 court 86114: . . The qusatfoa pr4abnte4 i8: Did th4 ".
tempormy 4~8sntloa 0r pro4wCfan in paying of both lgas arad ail, us44r tlla r04t8 qaentlty dlaclOe%d by tBe r44Qfd, t4IWkiuata t&4 phinrl-Ix leeue? Tba raotc. dfs41484d bf thm reooa-4 4~4 orforte mede by app4114er, ia @wG tdth, *9 Eorroreble Bascom Gilsa, P%ge 0
to reaume qa:as production, and the expsndi$ur~ af large ammats of money In their sf~ort to roaw gas pro&atioa Smmediataly after the oanlae aollapasd, and oontlauad suah offort uatll tha 011 well wee brought la on July 24 and then ~rownecY their effort It B&I produotion #tartlog another well and cant t nulq work thereon until gsia was produoed In the aeaoad wall. . ." " .iw have oonoiuaidea untbr *bat,
the t&6*6Pd pr0~1~i~6 or th6 tiOrei i0400 68 r0oad la tha reooril wbara oil waa probwba ln payllh& quaatfbi6s within the riv+p3m pericd, ana the aims6 0ourafAon 0r pro- au0tm we8 themafter rreoasearflp unfon~a and UnaVOfdebla, ana *hare tha leesee IA sad raith w4a reasoaable aLz*n00 to remme produotloa, out169 0r 1lran09, ana aid, +ithio. ana at grwi a masorzaable tfme, in +lmv of the oaaaltfaru df~Oloaed b9 the reoord, X-06tWiO proauotiom, a rorraiture rot teffiporary amsatloa d pmuuetlon without raplt 0r leawer rrhoula not be allowed a6 a matter 0r law. Suoh w6 belier0 to be a nesoaable oomtruatlon of the laese. . .* Xi-i Text+% faollio Coal & all Co. 18. Bratton,
eao 52. tc. 688, the Coart, in spmnking 0r a teqWr*ly ae*rsttia or prodaotion or oil, ssys~
aiitng a,i800nroa it in suoh qwati- tiaa, and with raecloaabl8 proapooto oi rur- ther tmaoeasrul dereloparsrrt, the lam3et4, ia ra%rmas and jor:tioo, wm satitled. 00-a te a resaonable len@& ot tm* wlthik wh%eh to oontlaue the acevalcrpamt work in arrberto reap aam rrrward ror the lsbor aad exp6nass ia0urrOa, whbh w0dla also be attanbea ritb prorit to plaintfrr. m m0h w0 b~~leve tcb b8 a roramm8bla ooamtruotloa of the tan118 The &W&m* euthorltlim, or tha leese. aitad by appellant, a~@cord with these V%O%FS, snd e02w or th8i+ fit ma, fnvolvea tha *10 Honorable Basoom Oiler, Pega 10
oonstruotlon of leases or 6imllar tenarr to those of the leaea in oontroreray In t,ha present suit; Eaatera Oil Co. v Ooulehan, 63 W. Va. 531, 64 S. H. 836; So&h POM. Oil Co. t. 91106 ram) 71 W. Va. 438, 76 s. E. 961, 43 L. R. A. (I. S. P 848i Ohio Fuel 011 Co. 0. Graealsef, 84 w. vr. 67, 99 e. . 874; Roeab v . funatloa 011 k Can 0th (Okla. Sup.) 179 Pea. 990." Ia Wlroon%ia-Tex%% ill Go. v%. Clutter, &x38 9. w.
981, the ckmaiasi~ 0r Appeal8 or TO=% %%iar “The law 1% wall uttlea a temparmr~ thet or drtslopmeata or oprstloa under en oersatlon
011 an& gas leas* doe6 not, a* a matter 0r law, oonstltuto an abandomaaa8. Flaher V. Creroaat 011 Co. (Tex. Civ, AQQ.) 178 8. W. 906; Ball v'. MoClraky (Tsx. Cit. A~Q. )ES8 5. W. lOOIt Marnett Oil & 088 Co. *. Munaey et al (Tax. CLv. A 0.) 833 8. W. 847; feaobs v. Robinson et al v Tex. Clr. App.) Ml S. W. etlf mna~y at al v. Yarn& 011 E Oaa Co., 113 Tex. Rl.&, 284 8. w* 3ll.a The ahore olted authorltle6 together with other8
whlah mod not be alted In thla oplnloa, rstabliah thm rule In Toxaa that an oil and gas lease ror l aerinlte prlmery term and *aa long therealter au oil and gaa ia produo4a iqpayfng quantltf*rW., is not ipso raoto term& natea bf a teaporarp oe%aatlan 0r proauotion 0006rrl6g through oirounutanoer or r6a%ona be,yoad the oontrol of the leseea art&r oil gas ixt payi- quantitiar, ia dla- ooversd aa proauoed aumg prlnmry tera or th% lease, provided the iest3ee thercsrrter Lo good r418b we6 reasormble allf.~noe to re-ertabllrh prOau0tIo6, anb auooeeda In re-e%tabl$.rhing proauQtlQn within a r*a%on%ble time.
Acoordlngly, you am edrirsa th%t, in our eplnloa, oil ati @aa lease reremea to In your raqueet aid not terminate by virtue 0r aalb aeseaelon 0r praduotion mm said lasso, pr0vIa0a, howwer,.that auah orasatloa 0r proauotlon ir temporary ana was oaunea ror08r or dr- wmatanoea beyond the 0oabroL oi the lwaee, and prsdad *11 Iionoreble Basoom (llle4, Pago 11
the lessee, in good ralth, mea reesoneblo diligOnOe to ro-srtebllah produotlon frc#n said laaae, and within a r%a%on%ble time thersartor doe8 rs-establlmh probuotlon.
The exlatmoo all or these raota, togrthm with the question of whether or not oil or gas la faot was proauaed Irom the land In question prior the explratlon or rive-year primary tmu, are mafUr whldh maat be aetamiad the Board r0r Lea80 or Taxes Prlaoa Lend8 from thir oridenoe presented to tbm Ma rm4 their knowledge or the raota.
Yours iory truly AlWRBETO~RALlWTEXB