Carson v. Railroad Commission

669 S.W.2d 315 (1984)

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Carson v. Railroad Commission

Supreme Court of Texas
669 S.W.2d 315 (1984)

SC

Facts

John Lee Carson (plaintiff) owned a royalty interest in several adjacent tracts of land subject to oil and gas leases. The tracts were subject to a proration unit established by the Texas Railroad Commission (Commission) (defendant). The lease on Carson’s tract did not grant authority to pool, but some of the leases on the other tracts in the proration unit did permit pooling. BTA Oil Producers (BTA), a lessee, drilled a well on Carson’s tract and began producing in paying quantities two months thereafter. Two months later, BTA submitted a proposal to all of the royalty owners in the proration unit, proposing to pool the tracts and split the oil production on an acreage basis. Because the well was on Carson’s tract, Carson’s interest in the well’s production stood to be reduced by approximately two-thirds under BTA’s offer. Carson attempted to negotiate with BTA, but BTA refused. Carson refused to accept BTA’s offer, and was the only royalty owner in the proration unit to do so. BTA filed an application with the Commission to compel pooling of the tracts. The Commission granted BTA’s application and forced pooling of the tracts. Carson brought suit, seeking to have the Commission’s order vacated. The trial court upheld the Commission’s order. The court of appeals affirmed. Carson appealed.

Rule of Law

Issue

Holding and Reasoning (Wallace, J.)

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