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4] Paying quantities cases usually focus on what expenses constitute “operating expenses.” “Operating expenses”—or “lifting expenses” as they are sometimes referred—are “ordinary, recurring expenses” that are attributable to the expense of production, after the well is drilled and completed. [5] at 718-19; see also Dore Energy Corp.
EP Energy E&P Co., While not particularly groundbreaking, Middleton does provide further guidance to mineral lessees and litigators with respect to the relevant factors and time period considered in a paying quantities case. 50,300-CA (La. Ultimately, the Second Circuit reversed the district court’s judgment on other grounds.
1] In the case, a landowner sued its mineral lessees for: (1) failure to provide a recordable act evidencing the expiration of a mineral lease under Mineral Code articles 206-209 and (2) failure to pay royalties under Mineral Code articles 137-140. [2] The mineral lessees executed credit agreements with Wells Fargo Energy Capital, Inc.
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