BlueStone Natural Resources II, LLC v. Randle (Opinion)Annotate this Case
The Supreme Court affirmed in part and reversed in part the trial court's decision resolving all issues in this oil and gas dispute favorably to the lessors of a mineral lease and awarding damages for underpayment of royalties, holding that remand was required to determine damages, if any, for off-premises compressor-fuel use.
One lease provision in this case required the lessee to "compute and pay royalties on the gross value received." The other lease provision at issue required royalties to be "computed at the end of the mouth of the well." The Supreme Court affirmed the lower courts' judgments except as to the portion of the judgment awarding damages for royalties on compressor fuel, holding (1) the lower courts correctly concluded that the lessee's deduction of postproduction costs was in error because the mineral lease explicitly resolved the conflict in favor of a gross-proceeds calculation; and (2) because the compressor-fuel damages were not conclusively established in the amount awarded, remand was required.