J.R. Hurd; Sara Smith Hurd; Patricia Hurd McGregor; Victoria Hurd Goebel; David W. Killam; Adrian Kathleen Killam; Tracy Leigh Killam-Dileo; Hurd Enterprises, Ltd.; And Killam Oil, Co., Ltd. v. Arkansas Oil & Gas Commission; Lawrence Bengal, in His Official Capacity as Director of the Arkansas Oil & Gas Commission; W. Frank Morledge, Mike Davis, Lee Dawkins, Jerry Langley, Jim Phillips, Chris Weiser, Timothy Smith, Charles Wohlford, and Thomas McWilliams, in Their Official Capacities as Commissioners of the Arkansas Oil & Gas Commission; And SWN Production (Arkansas), LLC, 2020 Ark. 210

SWN sought integration orders (March 2017) to drill cross-unit Moorefield Shale wells in two units containing mineral interests owned by the Hurd and Killam families; SWN offered nonfamily owners either $100/acre + 1/8 royalty or $0 + 1/7 royalty.
After SWN filed, the Hurds and Killams leased their interests to affiliated companies (Hurd Enterprises, Killam Oil) specifying a 25% royalty, then elected "non-consent" under the integration orders.
SWN filed supplemental applications asking the Arkansas Oil & Gas Commission (AOGC) to find the 25% royalty unreasonable for non‑consenting leaseholders and to set a lower royalty; AOGC held hearings and amended the orders to cap leasehold royalties at one‑seventh during the recoupment period.
The Hurds and Killams petitioned for review under the Arkansas APA; the circuit court ultimately affirmed AOGC’s amended orders after this Court had earlier rejected sovereign‑immunity dismissal and remanded for merits review.
The Supreme Court (majority) affirmed AOGC, holding AOGC had statutory authority (express and implied) to issue integration orders on "just and reasonable" terms and to reduce excessive lease royalties; two justices dissented.

Issue	Plaintiff's Argument	Defendant's Argument	Held
AOGC authority to reduce lease royalties in integration orders	AOGC lacks statutory authority; substituting agency judgment for private lease terms is ultra vires and an unconstitutional taking	Statutes empower AOGC to issue integration orders on "just and reasonable" terms and implied authority permits adjusting royalties to prevent unnecessary expense/drainage	AOGC has authority under Ark. Code Ann. §§15‑71‑110 and 15‑72‑304; reduction to one‑seventh upheld
Standard of review for agency statutory interpretation	Deference to agency interpretation conflicts with separation of powers	Agency interpretation is a useful guide where statutory ambiguity exists	Court reviews statutory questions de novo but may consult agency interpretation when statute is ambiguous (citing Myers)
Arbitrary/capricious challenge to AOGC orders	Orders are arbitrary, unsupported by record, and improperly single out non‑arm’s‑length leases	AOGC made factual findings; appellants did not contest those findings on appeal	Court held orders were not arbitrary or capricious and affirmed (appellants conceded no challenge to AOGC’s factual determinations)

Myers v. Yamato Kogyo Co., Ltd., 2020 Ark. 135 (clarifies de novo review of agency statutory interpretation, but permits agency interpretation as guidance when ambiguous)
Ark. Oil & Gas Comm’n v. Hurd, 2018 Ark. 397 (addressed sovereign immunity question and remanded for merits)
Dobson v. Arkansas Oil & Gas Commission, 218 Ark. 160 (1950) (agency may not exercise powers not found in statute)
Gawenis v. Arkansas Oil & Gas Commission, 2015 Ark. 238 (explains effect and purpose of integration orders)
Great Lakes Chem. Corp. v. Bruner, 368 Ark. 74 (2006) (appellate review is directed to agency decision)
Walker v. Ark. State Bd. of Educ., 2010 Ark. 277 (agencies possess powers conferred by statute or necessarily implied from statute)