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."
Here is the decision.
I don't know. It just feels like I sold you my cattle, then you get to charge me for having to butcher it to sell the beef.
Good luck getting your gas to market without a pipeline, processing plant, etc.
And had I said "No, I don't like that deal" they would've still taken it out of the ground underneath me. I'm just curious as to why I pay for all that when they take it from me, and then I have to pay for it again when I use it.
I agree it can be frustrating. I have a lease with CHK so I get it. I am also a geologist in the E & P world.
Saw this the other day.