TRAVIS COUNTY DISTRICT COURT HOLDS RRC LACKS AUTHORITY TO ISSUE PERMITS FOR ALLOCATION WELLS
In April of 2021, the Opielas filed suit for judicial review of a permit issued by the Railroad Commission of Texas (“RRC”) in connection with an allocation well (the Audioslave A 102H Well) drilled by Magnolia Oil & Gas Operating LLC across lands in Karnes County. Yesterday, a Travis County district court held that the RRC did not comply with the requirements of the Administrative Procedure Act when it adopted rules for allocation and Production Sharing Agreement wells and thus erroneously applied such rules by issuing a permit for the Audioslave A 102H well. Until yesterday, no court had ruled on whether the RRC actually has authority to issue permits for allocation wells. The case is Opiela v. Railroad Commission of Texas, No. D-1-GN-20-000099, and the order can be viewed here.
It is also worth noting that the Opielas’ have filed suit against Magnolia in the Karnes County district court asserting that Magnolia has no right to drill the Audioslave A102H Well under the terms of the Opiela lease. The parties are currently awaiting the court’s ruling on their motions for summary judgment, and we will provide updates on this case as they become available.