WV Drillers & Landowners Want New Law re Post-Production Issue

Earlier this week MDN reported on the recent West Virginia Supreme Court decision to reverse it’s earlier decision and allow EQT (and by extension, other drillers) to deduct some post-production expenses from royalties paid to landowners (see WV Supreme Court Reverses Itself, Post-Production Deductions OK). The Leggett v. EQT case turned on the meaning of three short words: “at the wellhead” (see WV Supreme Court Post-Production Royalty Case Hinges on 3 Words). This latest final final decision must be the…well…final decision, right? Not so fast. There is another Supreme Court case from 2006, Tawney v. Columbia Natural Resources, which also dealt with post-production expenses and found drillers do not have the right to deduct them from royalties. But there are differences. “Leggett deals with the statute on royalties, while Tawney is about lease contracts.” It’s a pretty safe bet that a new case will be filed challenging Tawney in light of the Leggett decision. All of this back and forth in the courts is unsettling for both drillers and landowners. Both sides are in agreement about one thing: They both want the WV legislature to pass a new law clarifying the issue of post-production deductions…

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