Exxon Corp. v. Railroad Commission

BTA Oil Producers held a well (Wedge 2) drilled near the depleting Montoya Reservoir and wanted to plug it back and recomplete it at a shallower depth, but doing so would place it within 1,200 feet of BTA's other well (Wedge 1), violating the Railroad Commission's (defendant) spacing rule. BTA applied for a spacing exception, showing that no nearby wells were adequately capturing oil at the shallower depth and that drilling an entirely new, compliant well was not economically justified. The Commission granted the exception over Exxon's (plaintiff) objection, finding the exception would prevent waste; the trial court affirmed, and Exxon appealed.