What is your guiding principle when writing agreements?
“The more the words the less the meaning, and how does that profit anyone?” Ecclesiastes 6:11.
or
“The beginning of wisdom is the definition of terms.” Socrates
The Legal Issue
A lease grants “a perpetual, cost-free (except only its portion of production taxes) overriding royalty of five
Co-Author Brooke SizerWhat must a Louisiana lessee do to avoid statutory penalties for non-payment of royalty, and what must a royalty owner do to put the lessee on notice that royalties are not being paid? The answers are, more than the lessee did in Samson Contour Energy E&P, LLC v. Smith and less than
You are negotiating to take a big oil and gas lease. The run sheets show you are dealing with an executive right owner on behalf of himself and his NPRI owner. His proposed terms are odd: a lower-than-market royalty and a higher-than-market bonus. After reflecting, you get it: The terms aren’t odd; they are just
The duty owed by the executive right holder to its non-participating royalty interest holder in Texas, long haunted by the ghost of Clinton Manges, is again examined. From KCM Financial, et al. v. Bradshaw and its precursors …
We Know This:
My mother used to give us good advice. For example: Don’t lie … do your homework. Sabella v. Appalachian Development Corporation agrees with my mother.
Sabella bought minerals in 1997 under 66 acres in Warren County, Pennsylvania, on which the Haners had two producing wells (under a 144-acre lease from the Harveys). They weren’t paying
Co-author Brooke SizerHalloween is approaching, so let’s talk poltergeists – troublesome spirits that haunt a specific location. Where do they come from? In Quality Environmental Processes, Inc. v I.P. Petroleum Company, Inc., it was from a faulty property description that lay dormant for 30 years before beginning its vexations.
The Demon is Spawned
… in the right places.
In French vs. Occidental Permian, Ltd. the Texas Supreme Court held that costs associated with injection of carbon dioxide into a reservoir in a tertiary recovery operation were properly deducted from royalties.
This case reflects court’s awareness of improvements in oil recovery created by new technology, in
You might recall that North Dakota achieved nationwide notoriety when photos of flaring Bakken wells visible from space circulated around the news. According to the U. S. Department of Energy, at times North Dakota has flared 33% of its gas production, compared to the 1% average nationwide.
You will not be surprised
Welcome to part two of the hair-splitting decision in Chesapeake Exploration, L.L.C. v. Hyder. See our prior post about the basic facts.
More Facts
In addition to their cost-free royalty clause for wells on the leased premises, the Hyders also received an overriding royalty interest on wells drilled from pads located
Chesapeake Exploration, L.L.C. v. Hyder is another hair-splitting Texas decision about “cost-free royalties”.
The Facts
The Hyder family executed a lease covering 1,037 acres. Chesapeake drilled 22 wells on the leased premises. The Hyders believed their lease provided for a “cost free” royalty; that is, no post-production deductions. Chesapeake deducted post-production