Another Look at Recent Rulings by WV Supremes re Royalty Deductions

The West Virginia Supreme Court recently issued two 3-2 decisions reinforcing that oil and gas producers generally cannot deduct post-production costs from royalty payments to mineral owners unless lease agreements explicitly permit such deductions. We previously reported on both decisions. On June 6, the Supremes ruled in Kaess v. BB Land LLC on "in-kind" royalty leases (see WV Supremes Rule on “In-Kind” Royalties & Post-Production Deductions). On June 11, the court ruled in Romeo v. Antero Resources Corporation on whether the “marketable product rule” applies up to the “point of sale” for gas and NGLs (see WV Supreme Court Grants Landowners Second Major Win in a Week). This post considers the rulings from both cases (which are related) and how those two rulings affect landowners and drillers in the Mountain State.

---

To view this content, log into your member account. (Not a member? Join Today!)