where in the production process the valuation should occur. The Texas Supreme Court explained that when an agreement specifies “at the well” as the valuation point, then the royalty interest holder must share in the post-production costs, regardless of how the royalty is calculated or the stated valuation method. 573 S.W.3d at 205. The Texas Supreme Court concluded that the use of the “into the pipelines” language was the equivalent of using the “at the well.” The Texas Supreme Court noted that commentators have recognized the equivalence About the Authors: Eli Kiefaber Eli Kiefaber is a partner with
between “at the well” and “into the pipeline” language. Additionally, the Texas Supreme Court highlighted that the joint operating agreement executed by the parties contained a provision requiring Burlington to account to Texas Crude for the “actual net proceeds” received for production, permitting the deduction of post-production costs. As a result, The Texas Supreme Court concluded that the provision allowed for the deduction of post- production costs.
Zachary Oliva Zachary Oliva is a partner with
Kiefaber & Oliva LLP. Eli focuses his practice on oil and gas matters, including acquisition and divestiture of oil and gas assets, title opinions, joint operating agreements, federal
Kiefaber & Oliva LLP. Zack focuses his practice on energy and corporate law. He regularly assists clients in the drafting of oil and gas title opinions, purchase and sale agreements and
leases, pooling and unitization issues. Eli is licensed to practice law in Texas, Oklahoma, Colorado and Ohio, is a regular speaker on issues relating to the development of unconventional shale plays and has given a variety of presentations regarding legal issues relating to oil and gas development. Eli earned his B.A from Kenyon College and his J.D., with honors, from Marquette University Law School.
contract interpretation. Additionally, he assists clients with the negotiation, drafting and review of business formations, contracts and service agreements. Zack earned his B.A. from The Ohio State University and his J.D. from Capital University Law School. He is licensed to practice in New Mexico, Ohio and Texas.
New Wyoming Oil & Gas Conservation Commission Application for Permit to Drill Rule
The Secretary of State has accepted the final APD rule amendments for Chapter 3, Section 8 and change to definitions, effective December 20, 2019. To review the rule, please visit the Secretary of State’s website. You can also find the rule at Final Version of APD Rule The Wyoming Oil and Gas Conservation Commission (WOGCC) adopted changes to the Application for Permit to Drill (APD) Rule on November 12, 2019. Following adoption of the rule, a 75 day review period began, during which the Wyoming Attorney General and Wyoming Legislature reviewed the adopted rule and provided feedback to the Governor. Governor Gordon then certified the rule and delivered it for
filing to the Wyoming Secretary of State.
The new rule was the WOGCC’s response to a deluge of APD filings and is intended to encourage actual drilling of wells when APDs are filed and eliminate APDs filed to control operatorship of a drilling and spacing unit. Creating sole operatorship of a drilling and spacing unit by limiting who may file APDs, the new rule also provides an option for another operator to drill in cases where the controlling operator fails to diligently develop the drilling and spacing unit. The new rule includes a framework for contested case proceedings and evidence to be considered by the WOGCC.
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G r o w t h T h r o u g h E d u c a t i o n - J a n u a r y / F e b r u a r y / M a r c h 2 0 2 0
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