Texaco Inc. v. Industrial Commission
Supreme Court of North Dakota
448 N.W.2d 621 (N.D. 1989)
The North Dakota Oil and Gas Conservation Act (Act) permitted the North Dakota Industrial Commission (Commission) (defendant) to set up spacing units in order to protect against waste and to protect correlative rights. Once a spacing unit was established, only one well could be drilled within each unit. The Commission established a spacing unit that included lands on which both Texaco Inc. (Texaco) (plaintiff) and Harley Thompson owned mineral interests. Subsequently, Texaco drilled a well in the unit. Approximately seven months later, Thompson petitioned the Commission for compulsory pooling of all mineral interests, including his and Texaco’s, within the spacing unit that was previously established. The Commission granted Thompson’s petition and ordered compulsory pooling within the spacing unit retroactive to the date Texaco began drilling operations. Texaco appealed in trial court, arguing that the order should not be retroactive because Thompson had taken no part in the drilling operations. The trial court affirmed the Commission’s order. Texaco appealed.
Rule of Law
Holding and Reasoning (Erickstad, C.J.)
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