Garaas v. Ndic

Summary

The court held that NDIC had statutory authority to allocate oil and gas production among spacing units, but it did not regularly pursue that authority when it approved an allocation from an overlapping spacing unit to an underlying base unit without modifying the existing spacing and pooling orders. Because the allocation effectively enlarged the spacing unit without an application, notice, and an opportunity for affected owners to participate, the court reversed the district court and vacated NDIC Order No. 33453. The court denied attorney's fees because the record did not establish that NDIC acted without substantial justification.