Well Operators' Costs May Rise After Chesapeake Ruling

Law360, Dallas (June 12, 2015, 8:30 PM EDT) -- The Texas Supreme Court made it harder for energy companies to share the burden of post-production costs with property owners when it ruled Friday that a Barnett Shale overriding royalty owner isn't responsible for costs associated with a natural gas well operated by Chesapeake Energy Corp., attorneys say.

The court's ruling in favor of the Hyder family upheld a contractual provision describing the Hyders' overriding royalty on gas produced from wells on their land as "cost-free," meaning, for example, Chesapeake can't charge the Hyders for what it costs to transport the gas from the well to eventual distributors.

Lawyers say the decision pricks...

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