Avcg, LLC v. State of Alaska, Department of Natural Resources

Summary

The court affirmed the superior court’s decision upholding DNR’s denials of AVCG’s applications to create overriding royalty interests on state oil and gas leases. It held that DNR applied existing statutory and regulatory standards rather than unlawfully adopting a new regulation, and that its reliance on economic factors and a 20% royalty-burden guideline was permissible because the guideline was derived from prior adjudications and was not a rigid rule. The court also rejected AVCG’s challenges concerning the reasonableness of DNR’s decisions, the need for approval, procedural due process, and takings.