Anadarko Petroleum Corp. v. State Oil & Gas Bd. of Miss., et al.


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Docket Number: 2011-SA-00773-SCT
Linked Case(s): 2011-SA-00773-SCT

Supreme Court: Opinion Link
Opinion Date: 08-02-2012
Opinion Author: Waller, C.J.
Holding: Vacated and Remanded

Additional Case Information: Topic: Oil and gas - Propriety of costs - Substantial evidence - Findings by agency
Judge(s) Concurring: Carlson and Dickinson, P.JJ., Randolph, Lamar, Kitchens, Chandler, Pierce and King, JJ.
Procedural History: Admin or Agency Judgment
Nature of the Case: CIVIL - STATE BOARDS AND AGENCIES

Trial Court: Date of Trial Judgment: 05-10-2011
Appealed from: Hinds County Chancery Court
Judge: William H. Singletary
Disposition: Affirmed the Board's order.
Case Number: G-2010-823S/2

  Party Name: Attorney Name:  
Appellant: Anadarko Petroleum Corporation




J. JEFFREY TROTTER JEFFERSON D. STEWART



 

Appellee: State Oil & Gas Board of Mississippi and Kelly Oil Company HOWARD O. LEACH E. O. SPENCER, III  

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Topic: Oil and gas - Propriety of costs - Substantial evidence - Findings by agency

Summary of the Facts: Anadarko Petroleum Corporation petitioned the Mississippi State Oil and Gas Board to determine the propriety of costs that Kelly Oil Company was attempting to charge to Anadarko as a nonconsenting owner in a force-integrated drilling unit. The Board determined that all costs Kelly Oil was attempting to charge were properly chargeable. The Hinds County Chancery Court affirmed the Board’s order, and Anadarko appeals.

Summary of Opinion Analysis: In order to determine whether an agency’s action was supported by substantial evidence or was arbitrary or capricious, the appellate court must be able to understand why the agency ruled as it did. If an agency does not disclose the reason upon which its decision is based, the courts will be usurped of their power of review. Anadarko disputed seventeen different categories of costs for various reasons. Throughout the hearing, substantial conflicting testimony was given regarding the reasonableness and necessity of these disputed costs. The Board’s order addresses in detail only one of these costs – a 2003 “workover” that Anadarko disputed, in part because it did not own any drilling rights at the time the cost was incurred. As to the remaining costs, the Board’s order provides no findings or reasons why it determined that these costs were actual, reasonable, and necessary. Thus, the Board’s order is vacated and the case remanded to the Board for further proceedings.


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