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Full-Text Articles in Jurisprudence
The First Marketable Product Doctrine: Just What Is The Product., Byron C. Keeling, Karolyn King Gillespie
The First Marketable Product Doctrine: Just What Is The Product., Byron C. Keeling, Karolyn King Gillespie
St. Mary's Law Journal
Oil and gas leases normally do not set a fixed price for calculating royalty payments. Instead, oil and gas leases commonly tie royalty calculations to a more flexible yardstick, including “market value” or “net proceeds”. This flexibility allows the lease relationship to survive any dramatic volatility in oil and gas prices, while the same fixed price may be inadequate in shifting markets. Conversely, the flexibility may place lessors and lessees in a position of inherent conflict. In particular, parties vehemently disagree about the proper location for applying the yardstick. Historically, lessees have enjoyed the better side of the argument; though, …