On June 2, 2017 the Louisiana Second Circuit Court of Appeal affirmed a trial court’s judgment cancelling a mineral lease under Mineral Code article 140 and provided further clarity on a production in paying quantities analysis under Louisiana Mineral Code article 124.[1] The dispute in Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., arose from a 2004 mineral lease covering nearly 1,400 acres in Sections 9, 10, 15, 16, and 21, Township 15 North, Range 15 West, in Caddo Parish.[2] The lease was granted by Gloria’s Ranch, L.L.C. (“Gloria’s Ranch”) to Tauren Exploration, Inc. (“Tauren”) and contained a three year primary term as well as a horizontal and vertical Pugh clause.[3] Tauren subsequently assigned a 49% interest in the lease to Cubic Energy, Inc. (“Cubic”).[4]
Continue Reading Louisiana Second Circuit Provides Clarity on Production in Paying Quantities and Affirms Lease Cancellation Under Mineral Code Article 140 for Failure to Pay Royalties
Royalty
Louisiana Third Circuit Addresses Payment of Royalties in Situations Involving Production Under a Mineral Lease Pursuant to a Conditional Allowable Prior to Unitization
In Gladney v. Anglo-Dutch Energy, L.L.C., the Third Circuit addressed the question of whether or not a mineral lessee must pay its lessor full lease-basis royalties for production undertaken during the effective period of a conditional allowable but prior to the effective date of a unit order.[1] In the case, the Plaintiffs granted a mineral lease to the Defendant-Lessee that provided for a 1/5 royalty in 2009.
Continue Reading Louisiana Third Circuit Addresses Payment of Royalties in Situations Involving Production Under a Mineral Lease Pursuant to a Conditional Allowable Prior to Unitization
Texas Supreme Court Says You Can’t Disclaim Your Heritage, But Maybe You Can Ignore It
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Like the final season of ABC’s hit series Lost, the Texas Supreme Court’s opinion in Chesapeake Exploration, L.L.C. v. Hyder, No. 14-0302, was highly anticipated, but left many of us scratching our heads. The 5-4 decision, authored by Justice Hecht, is the latest in a series of cases from high courts across the…
Houston Court Rejects Weighted Average Royalty Payment Calculations Under Lease Agreement
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Posted in Royalty
In Shell Oil Co. v. Ross, No. 01-08-00713-CV (Tex. App.—Houston [1st Dist.] February 25, 2010, no pet. h.), Ross, a mineral interest owner, brought a breach of contract, unjust enrichment, and fraud action against natural gas lessee, Shell. Ross alleged that Shell failed to pay royalties in accordance with the…
Fifth Circuit Royalty Decision Stands — Supreme Court Denies Cert
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Posted in Royalty
The United States Supreme Court has denied the Petition for Certiorari filed by the United States Department of the Interior in Kerr-McGee Oil & Gas Corp. v. U.S. Dep’t of the Interior, 554 F.3d 1082 (5th Cir. 2009). The high court’s refusal to consider Interior’s appeal allows the Fifth Circuit’s January 2009 decision to…
Fifth Circuit Reverses, Allows Texas to Intervene in Cy Pres
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Posted in Royalty
By Marie Carlisle
On May 28, 2009, the Fifth Circuit decided In the Matter of: Lease Oil Antitrust Litigation, case no. 08-40230, reversing the District Court’s denial of the State of Texas’ motion to intervene in a matter concerning unclaimed settlement money from the oil antitrust action. The Fifth Circuit found that Texas met the…
Maxwell v. Kerr-McGee: Tenth Circuit Upholds Right Of MMS Auditor To Bring Qui Tam Action
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Posted in Royalty
By Jonathan Hunter:
In a highly anticipated decision, the Tenth Circuit held this week that the district court had subject matter jurisdiction over a qui tam action filed by an MMS auditor concerning royalty payments on crude oil produced from offshore federal leases. The district court had dismissed the case on the grounds that the…
Texas Supreme Court Again Addresses Royalty Class Actions
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Posted in Royalty
In Bowden v. Phillips Petroleum Co., No. 03-0824 (Feb. 15, 2008), the Texas Supreme Court again addressed the propriety of class actions for gas royalty claims. The class affirmed the denial of two subclasses, but reversed the denial of a third subclass of royalty claimaints. The Court followed its prior holding in Yzaguirre in…
Court Addresses Sufficiency of Demand Letter Under Mineral Code Articles 212.21-23
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Posted in Royalty
In CLK Company, L.L.C. v. CXY Energy, Inc., No. 07-834, 2007 WL 4409686 (La. App. 3d Cir. 12/19/07), the court addressed the payment of royalties and penalties under Mineral Code article 212.23(c) and concluded that plaintiff’s letters were insufficient to trigger the provisions of that article. In CLK Company, the parties entered …
Res Judicata Bars Relitigation of 1938 Buras Levee District Lease’s Validity
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On November 21, 2007, the Louisiana Fourth Circuit Court of Appeal affirmed the trial court’s ruling in favor of Chevron U.S.A., Inc. (“Chevron”), the Plaquemines Parish Government (“PPG”), and others in a dispute with the State of Louisiana over the validity of a 1938 mineral lease granted by the Buras Levee District (“BLD”). The State…