Federal Court in Colorado Rules That The Implied Duty to Market Did Not Apply to 1981 Lease

Many Pennsylvania landowners have leases with “market enhancement” royalty clauses. These clauses typically prohibit the deduction of any post-production costs that are incurred transforming the raw gas or oil into marketable form. Once the hydrocarbons are in marketable form, these clauses generally allow a driller to deduct further costs only if those costs actually enhance the value of the oil and gas.... By: Houston Harbaugh, P.C.