Bennion v. ANR Production Co.
Utah Supreme Court
819 P.2d 343 (Utah 1991)
Sam Bennion (plaintiff) held an unleased mineral interest in a Utah drilling unit and, after initially being compelled to pool his interest with the unit, declined to participate in the costs of drilling a second well when the Utah Board of Oil, Gas and Mining approved one. ANR Production Co. (defendant), the well operator, asked the Board to modify its earlier order to include the second well and impose a nonconsent penalty on Bennion, and the Board did so, requiring Bennion to pay 175% of his share of the drilling, completion, and equipment costs before he could receive proceeds from the well. Bennion appealed, arguing the penalty was against the public interest and an unconstitutional taking of his property.
Whether a state regulatory penalty imposed on a mineral interest owner who declines to share drilling costs, requiring him to pay a multiple of his share of those costs before sharing in well revenues, is facially unconstitutional or against the public interest.