Interesting to Texas Royalty owners and Oil/Gas Producers.

I might need some of your knowledge on what this means.

To the relief of oil and gas producers, the Texas Supreme Court ruled on March 1, 2019, in Burlington Resources Oil & Gas Company, L.P. v. Texas Crude Energy, LLC  (No. 17-0266), that post-production costs were rightfully deducted when calculating overriding royalty payments based on the "amount realized" from the sale when the royalty interest is to be delivered "into the pipelines, tanks, or other receptacles with which the wells may be connected."  This ruling reversed the judgment of the court of appeals that found that "[e]ven assuming that, under the granting clause, the [royalty] is generally to be delivered 'at the well,' the parties are still free to allocate post-production costs as they see fit."  The Court noted that the court of appeals misunderstood its decision in Chesapeake Exploration, L.L.C. v. Hyder, 483 S.W.3d 870 (Tex. 2016), and that it "never construed a contractual 'amount realized' valuation method to trump a contractual 'at the well' valuation point."

Views: 211

Reply to This

Replies to This Discussion

Here is the decision.



Not a member? Get our email.

Latest Activity

© 2019   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service