Houston Energy Company Wins Appeal in Fuel Gas Royalties Clash

EnerVest Operating LLC won an appeal of a court order to pay royalties on fuel gas under a pair of oil and gas leases, after it was able to prove the trial court misconstrued the royalty and free-use provisions in its contracts.

Well operator EnerVest argued it doesn’t owe lessors Stanley Mayfield and Gerry Ingham any royalty on fuel gas under the plain language of the leases, which cover land in Sutton County, Texas. The royalty provision in the leases calculates payments based on the “market value at the mouth of the well.” Fuel gas, a portion of the gas ...