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Devon Energy Prod. Co., LP v. Sheppard is a case of first impression and the landowners cited to no precedent requiring producers to pay royalty on post-production costs incurred downstream from the point of sale. 14 The holding that the “proceeds plus” leases at issue created royalties payable in an amount that may exceed the consideration paid to producers is a hard pill for lessees to swallow. However, the Court was careful to note that this case only examines how post-production costs were allocated under these particular leases . What is clear is that broad “proceeds plus” language has now withstood scrutiny by Texas’ highest court, and producers should take note. Although this case is relegated to these particular leases, it is worth noting that this is a fairly common lease provision and a common method of valuation at the first point of sale, particularly in the Eagle Ford Shale. 15 14.) Id. at 21. 15.) See John B. McFarland, Oil and Gas Lawyer Blog: https:// www.oilandgaslawyerblog.com/devon-v-sheppard-a-win-for- royalty-owners/
Brad Gibbs Partner, Houston bgibbs@oglawyers.com www.oglawyers.com
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Haunting Your Ex From Beyond the Grave: Post-Divorce Partition and the Johnson Decision
Decree of Divorce did not explicitly mention or describe the Subject Property. The Decedent went on to remarry but passed away in 2010, leaving behind as his heirs his second wife, Paquita Johnson, and their son, Timothy Johnson (the “Johnsons”). The dispute at hand arose in 2019 when Dunham filed suit to quiet title. Dunham alleged that the Subject Property had not been specifically divided in the 1999 divorce decree, and she was entitled to her one-half community interest in the Subject Property. 3 Dunham requested that the trial court (1) determine the current ownership shares of the Subject Property and (2) partition the Subject Property in a “just and right” manner. The Johnsons counterclaimed that the Subject Property was already divided and had been properly awarded to the Decedent as his sole and
In Johnson v. Dunham , 1 The Eastland Court of Appeals was tasked with determining whether a mineral interest, which was neither mentioned nor described in a final divorce decree, should be divided in a post-divorce partition. The Court of Appeals (the “Court”) affirmed the trial court’s judgement, holding that the lower court was within its discretion when it established the mineral interest (the “Subject Property”) as community property and awarded an undivided fifty percent to Johnson’s ex- wife. 2 William G. Johnson (who is now deceased, and hereafter referred to as the “Decedent”) and Martha Dunham (“Dunham”) acquired the Subject Property in 1997, during their marriage, and thus as their community property. They divorced in 1999. However, although other real property was accurately described and divided, and other royalty and working interests were confirmed as the Decedent’s separate property, the Agreed Final
1.) 2022 Tex. App. LEXIS 2144 2.) Id. at 25. 3.) Id. at 2.
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