In 1986, the State of Alaska enters into two, 10-year primary term leases with Danco. After numerous full and partial assignments, the plaintiffs in this case own overriding royalty interests in some of the acreage covered by the two leases. On the day prior to the end of the primary term, Allen, one of the overriding royalty interest owners files a petition for statutory unitization under AS 31.05.110 seeking to have the lease become part of an existing and producing unit. The Commission initially denied the statutory unitization petition based on its conclusion that an overriding royalty interest owner lacked standing under 31.05.110. The Commission decision was reversed in Allen v. Alaska Oil & Gas Conservation Commission, 1 P.3d 699, 147 0.&G.R. 9 (Alaska 2000). Upon remand, the Commission again denied the petition, this time finding that the two leases do not contain any portion of the productive strata underlying the extant unit. Plaintiffs then appeal to the trial court and seek a trial de novo. The trial court denies the motion and then, on the merits, affirms the Commission's decision. Held: affirmed. Where the trial court acts as an intermediate appellate court in reviewing an administrative decision, the Supreme Court undertakes an independent review of the trial court's decision and may affirm if there is any basis in the record to support the trial court's decision. Agency findings of law are reviewed under the reasonable basis standard while agency findings of fact are reviewed under the substantial evidence test. A preliminary issue is whether the plaintiffs are entitled to de novo review at the trial court level. AS 31.05.080 appears to grant them a de novo review but the court accepts the Commission's argument that AS 22.10.020(d) which makes de novo review a discretionary power of the trial court impliedly repeals AS 31.05.080. The court also rejects the plaintiffs' claim that since the unit that they sought to merge into was a voluntary unit, then the statutory requirements for voluntary units should be followed. The court finds that since the plaintiffs' petition invoked the statutory unitization provisions, then the appropriate standards are found in those provisions. There is also substantial evidence in the record to support the Commission's decision that the leases sought to be merged into the extant unit were not underlain by the only producing pool or reservoir in that unit.
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