Post-Production Cost Fights Continue: Supreme Court Holds the Phrase “Into the Pipeline” Set a Valuation Point for “Amount Realized” Royalties
In Burlington Resources, the Texas Supreme Court held that an oil and gas royalty assignment that required the royalty to be delivered “into the pipeline” permits the payor to deduct post-production costs from the royalty owners’ payment, even if the agreement purports to prohibit such a deduction.