http://eaglefordshale.com/news/chesapeake-before-texas-supreme-court/
It is a shame that the real criminals are no longer at Chesapeake and most likely will avoid any punishment.
You are right; however, most likely, the poison has spread and there is no antidote.
http://eaglefordshale.com/news/chesapeake-lawsuit-adds-to-legal-tro...
And don't for get what I have said in the past:
"TEXAS HAS THE BEST SUPREME COURT JUSTICES THAT OIL MONEY CAN BUY"
Clint Liles
Amen!
Clint Liles said:
http://eaglefordshale.com/news/chesapeake-lawsuit-adds-to-legal-tro...
And don't for get what I have said in the past:
"TEXAS HAS THE BEST SUPREME COURT JUSTICES THAT OIL MONEY CAN BUY"
Clint Liles
Chief Justice Oliver Wendell Holmes admonished a young lawyer arguing before him; "Young man, you came here looking for justice. This is not a court of justice, it is a court of law."
As imperfect as our legal system seems at times, it is still the best system in the world. Some (like my kids) say that "It is not fair. I tell them if you want fair, go to Dallas in the second weekend of October each year. That's where the fair is."
After actually reading the case, I do not think that the Hyder's will be successful in their argument in the cost free nature of their carved our overriding royalty. Their argument is "cost free is cost free." That flies in the face of a century of jurisprudence in this matter. Cost free has long been defined as free of the costs of bringing the product to the surface. Free of costs of exploration and production, but not free of costs after the wellhead. I bet my $0.25 that the Hyders lose on this issue.
Of all those who have commented, have you read the case and the language in question?
The Hyders had ample opportunity in the overriding royalty agreement to make the sharing of costs clear. I do not think that they accomplished what they wanted. Therein is the buggabo. There is no higher expression of a meeting of the minds than what you wrote down and signed. Perhaps they needed better help in the drafting of the agreement.
I am no particular champion of Chesapeake, but based on the merits, you know how I stand.
Best,
Buddy Cotten
If the only thing the Hyder's lose on is the ORRI, that is understandable to me. If they lose on the post-production costs on their royalties, then I have a major problem with the outcome. Their lease (for the royalty portion) specifically says that Heritage v NationsBank does NOT apply to their lease. "No" means "No".
It will be interesting to see what happens on the non-Heritage v NationsBank armor. I have some language lying around somewhere that we used in the late 1990's before we totally understood how to word the lease to avoid a "Heritage" situation from happening.
Wait. Here it is.
"It is the specific intent of the parties hereto that the above costs are not to be born or paid by Lessor in any way, and to the extent that common law or statutory law presumes such costs have been deducted in determining the value of the product upon which Lessor’s royalty is paid, then such product value shall be “grossed up” so that Lessor’s royalty will not be reduced by such deductions. The provisions of this paragraph are agreed by all parties not to be considered “mere surplusage” and are specifically intended to be given effect, despite the holding in Heritage Resources, Inc. vs. NationsBank, Co-Trustee, 939 S.W.2d 118 (Tex. 1996) or its progeny, to the contrary."
That is a great clause, Buddy. I find it amusing that in this state (Texas) someone could read "value at the mouth of the well" and include a paragraph for "no post-production costs taken from royalty" and really think they nailed it.. Only to find out later they didn't. It's the "mere surplusage" part of Heritage that is a complete joke. If they made decisions like this for other common contract disputes, it would render most contracts useless. But as other have said on this forum before, Texas is an operator's paradise. It can also be a mineral owners paradise, depending on your lease agreement and location of minerals.