SIX C PROPERTIES, LLC v. Welsh
68 So. 3d 609
| La. Ct. App. | 2011Background
- Radius filed to create a CSNG unit in the East Bayou Castor Field, LaSalle Parish, defining the unit area between depths of 2,650 and 3,825 feet in Radius No. 1 Well.
- Six C Properties, the surface owner, opposed the unit at the November 17, 2009 hearing.
- Commissioner issued Office of Conservation Order No. 1528 on December 7, 2009, authorizing Radius to operate the East Bayou Castor unit with no future spacing requirements but a 330-foot boundary proximity rule.
- Six C filed a petition for judicial review in the Nineteenth Judicial District; the district court upheld Order No. 1528 in July 2010.
- Six C appeals asserting (i) lack of economic feasibility, (ii) improper spacing discretion, and (iii) insufficient limits of the CSNG producing area.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Economy feasibility of the unit | Six C argues the unit is not economically feasible | Radius and the Commissioner relied on Nabavian's projections and related evidence | Feasibility supported by record; court affirmed |
| Spacing between wells | Six C contends the Commissioner should restrict spacing | Barclay recommended no spacing restrictions; aligns with other CSNG units | No abuse of discretion; no spacing restrictions required |
| Limitation of CSNG producing area | Six C claims the record fails to establish unit limits | Barclay testified the area is reasonably underlain by productive seams; evidence sufficient | Evidence sufficient to reasonably establish limits |
| Standard of review | Six C asserts deference to agency findings should not apply to key factual determinations | Agency findings entitled to deference absent manifest error | Review under La. R.S. 30:12 proper; findings not manifestly erroneous |
| Legal basis for CSNG unit issuance | Statutory criteria for 30:5.2 not met | Order met statutory criteria including feasibility and area limits | Order upheld as compliant with 30:5.2(C) and related provisions |
Key Cases Cited
- Hunt Oil Co. v. Batchelor, 644 So.2d 191 (La. 1994) (great weight given to agency findings; arbitrariness standard on review)
- Amoco Production Co. v. Thompson, 516 So.2d 376 (La.App.1st Cir.1987) (credibility and expert testimony reviewed for feasibility findings)
- Simmons v. Pure Oil Co., 124 So.2d 161 (La.App.2d Cir.1960) (arbitrary or capricious review standard for agency actions)
- Cascio v. Twin Cities Development, LLC, 48 So.3d 341 (La.App.2d Cir.2010) (economic feasibility and valuation considerations in resource rights)
- Yuma Petroleum Co. v. Thompson, 731 So.2d 190 (La.1999) (arbitrariness and substantial evidence in agency review)
- Simmons v. Pure Oil Co. (cited in context), 129 So.2d 786 (La. 1961) (affirmation on appeal following trial court findings)