SCOTX Hears New Case Regarding Post-Production Deductions

AUSTIN – For nine years, Burlington Resources deducted post-production costs from royalties it paid to Amber Harvest for development in Eagle Ford’s Sugarkane Field.

Burlington says it heard no complaints from Amber Harvest about the deductions until June 12, 2015, the day the Texas Supreme Court issued its decision in a dispute over post-production costs involving Fort Worth’s Hyder family and Chesapeake Exploration. In an unusual win for royalty owners, the sharply divided court said that Chesapeake had improperly deducted post-production costs from royalty payments on gas wells in the Barnett Shale.