Late last month the figures came out in a class action lawsuit ruling against WPX Energy. Mineral rights owners banded together to dispute the royalty payments they were receiving from WPX for the extracted oil and gas. Earlier they settled for $5 million for deductions in the royalties for processing, WPX was basically shifting the cost of business on to the owners.
Now, they’ve been awarded another $5 million for deductions for transporting the gas to market. Nate Keaver, the attorney who brought the case, says they can’t cut into the royalty payments, unless they’re going to bring in even more money.
“So in other words,” says Keaver, “if you could have sold the gas for $1.00 a unit, and you pay 10 cents to move it farther downstream, to a different market, and you’re able to get $1.50, then if the lease is silent that would be an appropriate deduction. But if you move it downstream and you don’t get anymore value for it, then you can’t take that deduction.”
WPX is expected to appeal the decision.
