Disputes over royalty payments are something RR&A is all too familiar with, regardless of the highs and lows of commodity prices, but understandably, the calculation of royalties tends to become more concerning to our clients as commodity prices dip. State courts are continuously issuing changes to the calculation of post-production costs in their interpretation of lease language, and it requires a savvy read to be able to connect various points of case law in interpreting a single lease provision.
The takeaway is to review your leases, review them again, and then ask RR&A to review them. Following RR&A’s review of leases, we have found that nearly 30% of post-production costs are erroneously being withheld or paid under the current interpretation of lease language. Don’t leave money on the table or wait until circumstances may prohibit your recovery; let’s talk now.
With the ever-evolving case law governing royalty calculations and post-production costs continuously muddying the waters, you can stay up to date on the latest developments by following RR&A’s LinkedIn and see our previous RR&A Case Law Updates: Devon Energy Prod. Co., L.P. v. Sheppard, 643 S.W.3d 186 (Tex. App. 2020), aff’d, (Tex. Mar. 10, 2023); Van Dyke v. Navigator Group, Texas Supreme Court Cause No. 21-0146; Gerald Corder v. Antero Resources 322 F. Supp. 3d 710 (N.D.W. Va. 2018).
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