SANTA FE, N.M.—A state district judge has ruled against a commercial venture that sought to drill more than three dozen water wells in western New Mexico.

In a ruling issued Friday, the court found the state engineer was justified in rejecting the request by Augustin Plains Ranch to drill the wells.

State water officials had argued that the application was too vague and the effects of granting it could not be reasonably evaluated.

The company had asked to pump more than 17 billion gallons a year from beneath the plains for up to 300 years to supplement supplies in the Rio Grande Valley.

Critics, including residents of the area, described the proposal as a modern-day water grab.

It was not immediately clear whether Augustin Plains Ranch would appeal Friday's district court decision.