Compulsory Pooling and Unitization: Unleased Mineral Owner

摘要

Golden is the owner of a mineral interest where Luff wants to drill a well. She refuses to lease her interest and Luff petitions the South Dakota Board of Minerals and the Environment to statutorily pool her interest into a 960-acre unit Luff actually begins drilling before the Board acts on the petition. The only party testifying at the Board hearing is a landman working for Luff. The Board issues the order which contains a 100% risk compensation provision but does not contain a provision as to Golden's election to participate or not participate in the costs of drilling the well. Golden appeals the Board decision to the trial court which affirms the Board's action. Held: reversed. Under me South Dakota statutory pooling provision (S.D. Codified Laws § 45-9-32), the Board must prescribe the time and manner in which all owners within the spacing unit may elect to participate in the well drilling operations. Golden contends that the statute requires an election option which was not afforded to her. The court agrees that the statutory language is unambiguous through its use of the word "shall." Luff argues that prior dealings with Golden evinced an intent for her to go non-consent with the proposed well. The statute, however, requires that the pooling order must contain an election option. Therefore, the Board decision is reversed and remanded to the Board so that an election option to participate is included in the order.