Oil and Gas Lawyer Blog

Last week I introduced the term “post-production costs” and attempted to explain what those costs are and how oil companies account for such costs in calculating royalties.  I said that Texas courts have construed the standard gas royalty clause to allow oil companies to deduct post-production costs from royalties. The…

Mineral owners in Texas have learned that their leases should provide for a “cost-free” royalty. By this, they generally understand that the lease should prohibit the lessee from deducting any costs from their royalty. Herein, then, are some ruminations about what lawyers and oil companies refer to as “post-production costs.”…