Cost-Free Royalties – Where Valuation Begins and Post-Production Cost Deductions End

Authors: Celia Flowers & Melanie Reyes Texas jurisprudence has long held that the royalty “stick” of the mineral estate is free of production costs. Although the royalty interest is not subject to production costs, royalty is usually subject to post-production costs. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 122 (Tex. 1996). Nevertheless, parties are…

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