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Bennion v. ANR Production Co.

819 P.2d 343 (Utah 1991)

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Bennion v. ANR Production Co.

Utah Supreme Court

819 P.2d 343 (Utah 1991)

Facts

Sam Bennion (plaintiff) owned an unleased mineral interest in a parcel of land in Utah. In 1971, the Utah State Board of Oil, Gas and Mining (Board) established mineral drilling units, one of which included Bennion’s property. In 1973, all of the working interest owners in the unit, with the exception of Bennion, voluntarily pooled their interests. In 1975, Bennion petitioned the Board to compel the pooling of his interests with the rest of the unit. In 1981, the Board granted Bennion’s petition (1981 Order). In 1985, the Board permitted a second well in the unit. Bennion was offered the chance to participate in the drilling of the second well, but he declined. ANR Production Co. (ANR) (defendant), the operator of the wells, petitioned the Board to modify the 1981 Order, which at the time only applied to the first well. In 1990, the Board issued an order modifying the 1981 Order by incorporating the second well into the pool and imposing a nonconsent penalty on Bennion. Specifically, the order required Bennion to pay his share of 175% of the drilling, completion, and equipment costs for the second well. Bennion appealed the Board order to the Supreme Court of Utah, arguing that the nonconsent penalty was against the public interest and an unconstitutional taking.

Rule of Law

Issue

Holding and Reasoning (Durham, J.)

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