Texas Attorney General Opinion: WW-431 Page: 6 of 9
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Hon. Frank R. Nye, Jr., page 6, Opinion No. WW-431
itself, constitute a double assessment and would be uncon-
stitutional under Article VIII, Section 1 of the Texas
Constitution. It is therefore apparent that the gas as
real property was or should have been fully assessed before
it was severed and processed as persanalty in Sun's process-
ing plant. Reverting to the contract between Sun, the proc-
essor, and the lessee, producer, it is noted that several
functions are necessarily performed by the processor from the
time the gas is delivered to its gathering lines to the time
the residue gas is delivered to interstate pipe lines. Under
certain circumstances the contract may be cancelled. For
example, if the water or sulphur content is too high or the
liquid hydrocarbon content is too low, the processor may
cancel the contract. The contract runs from year to year
only, terminable at the will of either party. Also, the
processor is not obligated to take all of the gas for proc-
essing. It may take casinghead gas from other wells other
than the producer's wells, or if its capacity is insufficient
it may take gas ratably. Conversely, the lessee is not ob-
ligated to deliver the full amount of the gas contracted
for, if it would injure the efficiency of lessee's well or
wells. These facts do not, in our view, partake of a vested
title to gas as realty in place, for either party may termi-
nate such alleged title at will. Where Sun, the processor,
takes delivery of the gas is likewise important. Under the
contract Sun takes delivery into its gathering lines at the
junction point near the well and transports it under low
pressure to its processing plant. The contract further
provides a junction charge for transporting the gas. The
gas must be compressed to from 800 to 1,000 pounds of pres-
sure psi in order to enter Sun's transmission line. A
charge is made for this service. Instead of lessee paying
Sun, the processor, in cash for all the services which are
necessary to make the gas merchantable and profitable, these
service:-charges are paid in kind out of the plant products
extracted, and this is what is designated as "plant operator's
portion."
The only title that passes to Sun is the title to "plant
operator's portion", and this we think is personalty and not
realty. The fact that the contract provides that Sun is
compensated for the services performed by a portion of the
products produced from the gas, rather than in money does
not constitute Sun the holder of any right or privilege in
the leasehold estate of the lessees with whom they have con-
tracted. Under the following cases, Stephens v. Stephens,
292 S.W. 290, Writ Dism.; Choice v. Texas Company 2 F. Supp.
160; Chafin v. Hall, 210 SW.(2) 2t89, rev. on other grounds
276 S.W. (2) 77, it is held that when oil or gas are removed
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Texas. Attorney-General's Office. Texas Attorney General Opinion: WW-431, text, May 21, 1958; (https://texashistory.unt.edu/ark:/67531/metapth267043/m1/6/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.