September 29, 2022

Volume XII, Number 272

Advertisement

September 28, 2022

Subscribe to Latest Legal News and Analysis

September 27, 2022

Subscribe to Latest Legal News and Analysis

September 26, 2022

Subscribe to Latest Legal News and Analysis
Advertisement

Federal Court Upholds Fixed-Rate Post-Production Deduction Provision in West Virginia

On August 24, 2017, the United States District Court for the Northern District of West Virginia entered an Order in a royalty deduction class action granting Defendants CNX Gas Company LLC and Noble Energy Inc.'s Motions for Summary Judgment.  

The Court examined a 2009 oil and gas lease that expressly excluded all implied warranties and covenants and contained a royalty provision permitting the operator to deduct $1.20 per MMBtu for certain identified post-production costs, which the parties "agreed will be presumed to be actually incurred and reasonable."  

The Court held that this lease was unambiguous and also complied with the requirements enumerated in Wellman and Tawney for post-production deductions.  In short, the Court upheld the parties’ right to unambiguously contract for post-production deductions and to "freely contract that the flat-rate deductions are 'actually incurred and reasonable'".  

© Steptoe & Johnson PLLC. All Rights Reserved.National Law Review, Volume VII, Number 248
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Steptoe & Johnson’s Insurance Litigation Group lawyers offer decades of experience successfully representing clients in government liability, civil rights, premises liability, personal injury, wrongful death, contract disputes, medical liability, administrative hearings, trials and appeals.  The Group’s success is the byproduct of a strong firm work ethic and a commitment to outstanding client services that exceed expectations. Simply put, members of this group have trial experience, but just as importantly the patience and understanding to appreciate that trial may...

304-598-8142
Advertisement
Advertisement
Advertisement