Robert Burnett on Postproduction Costs

Ohio Court of Appeal Addresses Whether Gathering and Transportation Are Separate and Distinct Post-Production Activities

As we approach the 20th anniversary of the Marcellus Shale play, one issue remains constant: the ongoing debate over the deduction of post-production costs. Landowners all across Pennsylvania have spent countless hours...more

12/20/2024 / Deductions , EAP , Land Owners , Leases , Lessee , Lessor , Mineral Leases , Oil & Gas , Postproduction Costs , Royalties , Well Drilling

Texas Appellate Court Rules That ‘Free of Cost’ Clause In 1960 Deed Prohibits The Deduction of Post-Production Costs

Let’s assume you own a 135 acre farm in Tioga County, Pennsylvania. In 2020, you negotiate a new oil and gas lease with XYZ Drilling Company. During the negotiations, you insist on a cost free, no deduction royalty of 17%. ...more

12/6/2024 / Appellate Courts , Deeds , Land Owners , Leaseholds , Mineral Leases , Oil & Gas , Postproduction Costs , Royalties , Texas , Well Drilling

West Virginia Appellate Court Rules That Estate Misconception Theory Did Not Apply To 1902 Deed

The calculation of production royalties and the deduction of post-production costs remains a troubling issue for Pennsylvania landowners. But there is another frustrating and often confusing royalty-related issue which can,...more

2/1/2024 / Deeds , Land Owners , Marcellus Shale , Mineral Leases , Oil & Gas , Ownership Interest , Postproduction Costs , Royalties , Virginia

Federal Court In Ohio Rules That Driller Must Establish Marketability of Each Gas Product Under Market Enhancement Clause

Let’s assume you own 95 acres in Greene County, Pennsylvania. In 2019, you signed an oil and gas lease with ABC Exploration. During the negotiations, you agreed that only those post-production costs which actually...more

9/26/2023 / Deductions , Land Owners , Leases , Lessee , Lessor , Marcellus Shale , Mineral Leases , Oil & Gas , Pipelines , Postproduction Costs , Processing Fees , Product Enhancements , Royalties , Shale Gas , Well Drilling

Federal Appeals Court Rules That Driller Must Establish Marketability of Each Gas Product under Market Enhancement Clause

Many Pennsylvania oil and gas leases have what is commonly known as a “market enhancement” royalty clause (“MEC”). These MEC leases typically prohibit the deduction of any post-production costs that are incurred transforming...more

1/13/2023 / Deductions , Land Owners , Leaseholds , Leases , Mineral Leases , Oil & Gas , Pipelines , Postproduction Costs , Well Drilling

Pennsylvania Superior Court Rules that Royalty Clause Referencing Both ‘Gross Proceeds’ and ‘At the Well’ Was Ambiguous

Let’s assume that you own 125 acres in Tioga County. In 2017, you negotiate a new oil and gas lease with XYZ Drilling. During the negotiations, you insist on a “gross royalty” which prohibits the deduction of...more

5/20/2022 / Breach of Contract , Deductions , Energy Sector , Leases , Mineral Leases , Oil & Gas , PA Supreme Court , Postproduction Costs , Royalties , Well Drilling

Are Your Royalties Going Up in Flames?

Let’s assume you own 114 acres in Tioga County Pennsylvania. In 2012, you signed an oil and gas lease with XYZ Drilling. Two years later they drill and complete the MUSKIE #1H Well. The royalty clause in the 2012 lease...more

2/25/2022 / GMRA , Leaseholds , Leases , Oil & Gas , Oil Wells , PA Supreme Court , Payment-In-Kind , Pipelines , Postproduction Costs , Royalties , Well Drilling

Robert Burnett

Houston Harbaugh, P.C.

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