The U.S. Court of Appeals for the Fifth Circuit has dismissed a lawsuit brought by Texas landowners against Hilcorp Energy Co., an oil and gas producer, concerning whether certain post-production costs should be deducted before paying royalties. The Fifth Circuit’s decision, explained in an unpublished opinion, came after seeking guidance from the Texas Supreme Court. The Texas Supreme Court ultimately ruled that the lease required the deduction of postproduction costs, even when these costs occurred off lease.
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