Larsen v. Oil And Gas Conservation Commission

569 P.2d 87 (1977)

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Nature of the Case

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Facts

On December 21, 1972, Apache filed an application with D seeking to establish eighty-acre drilling units for the production of hydrocarbons from the Minnelusa formation. Without notice to Ps, a hearing on the application was conducted before d on January 9, 1973. On January 18, 1973, D entered an order that established eighty-acre drilling units and provided that wells would be permitted only in the center of the SE1/4 and the center of the NW1/4 of each quarter section. This order was made temporary for a period of ninety days because D found that the need for eighty-acre spacing was not yet conclusive. Although not approved by the United States Geological Survey until May 7, 1973, The parties entered into communitization agreements covering the NE1/4 and the 1/2SE1/4 of Section 24, which were effective February 1, 1973. On April 1, 1973, a producing well was completed in the NW1/4SE1/4. It is this well which is at the center of the present controversy. D called a hearing to review its original order. Ps were not personally notified of the hearing, but they did appear to object to a continuation of the prior order, especially as it related to the horizontal drilling units in the SE1/4 of Section 24. On April 23, 1973, D affirmed its previous order. Pursuant to an application made by Apache, D force-pooled all interests in the 1/2SE1/4 of Section 24. Ps' petition for review of the April 23 order culminated in a judgment, entered by the district court on January 16, 1974, which declared D's orders of January 18 and April 23, 1973, to be void and of no further force or effect, and remanded the matter to D for rehearing, with the direction that all evidence in existence at the time of the new hearing should be considered. D held another hearing on July 16 and 19, 1974, at which time all interested parties presented evidence and argument. On August 13, 1974, D entered findings of fact and conclusions of law, which in effect continued the previously-established drilling and spacing units. Ps again filed a petition for review of D's decision. On June 23, 1975, the district court entered its order summarily affirming the decision. Ps appealed. Ps claim that D acted without authority in creating certain drilling and spacing units. Ps also contend that an order D establishing a drilling and spacing unit, even if valid, does not operate to pool the interests within the unit unless there is a voluntary communitization agreement or a valid compulsory pooling order.