Kerr-McGee Loses Appeal Over Natural Gas Royalties

Law360, New York (September 9, 2008, 12:00 AM EDT) -- A federal appeals court on Monday upheld a lower court judgment that Kerr-McGee Oil & Gas Onshore LLC violated its lease agreements with landowners, customarily shortchanging lessors when paying royalties for natural gas liquids.

Judges Edward Prado, Jennifer Elrod and Catharina Haynes of the U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s decision that Kerr-McGee improperly deducted transportation and fractionation costs when calculating its royalties, violating the terms of its lease contracts, which stipulate such payments are made according to the total...
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