Are unpaid royalty payments for oil-and-gas leases subject to simple or compound interest? Simple, the Texas Supreme Court said in Samson Exploration, LLC v. Bordages on June 7, 2024....more
In Ammonite Oil & Gas Corp. v. R.R. Comm’n of Tex., the Texas Supreme Court held that the Railroad Commission (the “RRC”) did not abuse its discretion in denying a “muscle in” application under the Texas Mineral Interest...more
It’s not exactly Deuteronomy 23:19, but the Supreme Court of Texas has an opinion about interest. They don’t like it if it’s compounded. Samson Exploration LLC v. Bordages addressed interest to be charged on unpaid royalties...more
This article focuses on the state of Texas law regarding wellbore rights and various related issues raised by transactions involving such rights (and other similar lease severance issues) and provides some practical tips to...more
Montgomery Trustee v. ES3 Minerals and Echo Minerals is another Texas fixed or floating royalty case. Before diving into the details, perhaps it’s best to describe the pattern the courts seem to fall into to resolve these...more
On June 4, 2024, the United States Court of Appeals for the Fifth Circuit affirmed the dismissal of an "at the well" royalty holder's class action lawsuit after the Texas Supreme Court held that Hilcorp Energy Co. properly...more
In its May 22, 2024 non-precedential memorandum decision in Frye v. Penn View Exploration, Inc., 919 WDA 2023 (Pa. Super. Ct. May 22, 2024), the Pennsylvania Superior Court found that an oil and gas lease’s shut-in royalty...more
The Texas Supreme Court has clarified Texas law concerning how to calculate interest that is being paid pursuant to an agreement or statute. Samson Exploration, LLC v. Bordages, No. 22-0215, 2024 WL 2869049 (Tex. June 7,...more
Many oil and gas leases across Pennsylvania allow the driller to divert and use volumes of raw gas to power and fuel production operations both on and off the leasehold. Is a driller obligated to pay a royalty on that volume...more
In Carl v. Hillcorp Energy the Supreme Court of Texas addressed the relationship between the lessee’s use of gas off-premises under a free-use clause and the lessor’s burden to share post-production costs (PPCs) under the...more
The Fluid Mineral Leases and Leasing Process rule (FMLLP), which was announced by the Bureau of Land Management (BLM) on April 12, 2024, represents a significant update to the Federal onshore oil and gas leasing framework....more
Let’s assume you own 165 acres in Tioga County. In 2019, you sign a new oil and gas lease with ABC Drilling. You negotiate an 18% net royalty. The royalty clause, however, requires ABC Drilling to calculate the royalty on...more
I. Introduction - The dispute over a lessee’s obligation to pay royalty amounts for gas used off-premises continues as the Fifth Circuit certified two questions to the Texas Supreme Court last month. At issue, is whether...more
The Ohio Seventh District Court of Appeals recently came down on (yet another) dispute between fixed fractional and floating royalty reservations. The case of Min. Dev. Inc. v. SWN Prod. (OHIO), LLC, et al., overturned a...more
So, you found all the heirs and you have an agreed judgment stipulating title. Time to pay royslties? Maybe. And you have signed division orders. Surely, you can pay now? Maybe. These were the questions facing the parties in...more
Freeeport-McMoRan Oil and Gas, LLC and Ovintiv USA Inc. v. 1776 Energy Partners LLC presented a recurring question faced by Texas oil and gas producers: When can proceeds of production be withheld by the operator without...more
Our Oil & Gas Team reviews a new Texas law that changes the landscape for oil and gas operators that want to release leases subject to an overriding interest....more
As governments focus on clean energy and carbon reduction initiatives, their oil and gas taxation policies have increasingly come under scrutiny. Polsinelli’s attorneys review a few overarching themes concerning expected...more
Texas courts continue to address the “fixed or floating” non-participating royalty interest question. The El Paso Court of Appeals’ answer in Bridges v. Uhl et al. was floating, based on the language in that particular...more
On February 15, 2023, the Pennsylvania Supreme Court agreed to hear the appeal of PennEnergy Resources, LLC in the Dressler Family, LP v. PennEnergy Resources, LLC matter. The Pennsylvania Supreme Court’s review of this...more
The question in Kim R. Smith Logging Inc. v. Indigo Minerals LLC was whether a disgruntled Louisiana royalty owner sent its demand for unpaid royalties to the right party. It turns out that it did....more
The principal contention in the tax refund case of Exxon v. United States was whether certain mineral related transactions between Exxon and the countries of Qatar and Malaysia were sales or leases. Originally Exxon treated...more
There is no way to avoid it. It seems like everything costs more now than it did last week, last month and last year. Energy is one area with very sensitive prices. You have likely experienced the significant changes in...more
The common thread throughout the myriad oil and gas royalty cases decided recently by Texas courts could be “harmony”, the reading of different, seemingly conflicting, contract provisions so as to give meaning to all....more
Many Pennsylvania landowners have leases with “market enhancement” royalty clauses. These clauses typically prohibit the deduction of any post-production costs that are incurred transforming the gas into marketable form. Once...more