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Lessor is Not Entitled to Royalty on Hedging Profits

By Charles Sartain on May 21, 2013
Posted in Lease Disputes

A Louisiana lessee does not owe its lessor royalties based on hedging profits, said a federal district court in Cimarex Energy Co. v. Chastant. Cimarex, the lessee, hedged its gas contracts and didn’t pay its lessor, Chastant, earnings from the hedge.

As the court described it, hedging involves buying and selling financial positions as…

About Charles Sartain

I have been helping clients of all types resolve their commercial disputes for most of my 35 years as a lawyer. Of the many industries in which I have worked, the energy business is the most fascinating…More

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