Opinion ID: 2551819
Heading Depth: 3
Heading Rank: 2

Heading: Allen Was an Interested Person and Had Standing to Petition for Unitization.

Text: Under AS 31.05.060, the Alaska Oil and Gas Conservation Commission has the power to act upon its own motion, or upon the petition of an interested person. This provision requires that [o]n the filing of a petition concerning a matter within the jurisdiction of the commission under this chapter, the commission shall promptly fix a date for a hearing, and shall cause notice of the hearing to be given. Alaska Statute 31.05.110(a) expressly gives the commission jurisdiction over petitions for unitization, providing that when persons owning interests of affected tracts of land fail to agree on unitization, the commission, upon proper petition, after notice and hearing, has jurisdiction, power and authority, and it is its duty to make and enforce orders and do the things necessary or proper to carry out the purposes of this section [governing unitization]. Citing these provisions, Allen maintains that as an overriding royalty interest holder, he was an interested person with standing to petition for compulsory unitization. He contends that because his leases were in effect when he filed his petition, it was a proper petition under AS 31.05.110(a), and the committee had a duty, under AS 31.05.060, to promptly fix a date for a hearing on the merits of his petition. Allen insists that the commission erred in determining that his leases expired after he filed the petition and that their expiration deprived him of standing to pursue compulsory unitization. The commission concedes that an overriding royalty holder has standing to petition for unitization under AS 31.05.110 and that Allen was therefore an interested person under AS 31.05.060 at the time he filed his petition. Although Allen seems confused about the Commission's position, the Commission does not dispute that an overriding royalty interest is a sufficient property interest to render someone an `interested person.'  Indeed, the commission emphasizes that [t]he Commission's decision from which Allen appeal[s] assumed that an overriding royalty owner has standing. Nor does the commission question that Allen's leases would have been automatically extended by a unitization order entered before the leases expired. Under AS 38.05.180(m), [a]n oil and gas lease shall be automatically extended if and for so long thereafter as oil or gas is produced in paying quantities. [6] And under AS 31.05.110(m), [w]ells drilled or operated on any part of [a] unit area no matter where located shall for all purposes be regarded as wells drilled on each separately owned tract within the unit area. Since the drilling unit with which Allen sought unitization was already under production, a unitization order predating the expiration date of Allen's leases would have resulted in an extension. Under these circumstances, and given the commission's concession that an overriding royalty interest holder has sufficient interest to petition for forced unitization, we conclude that at the time of its filing Allen's petition for unitization was a proper petition under AS 31.05.110(a) and raised a matter within the jurisdiction of the commission under AS 31.05.060. [7]