Newfield Exploration Company, et al. v. State, et al.
- Newfield Exploration Company, Newfield
Production Company, and Newfield RMI LLC, Plaintiffs and Appellees
State of North Dakota, ex rel. the North
Dakota Board of University and School Lands,
and the Office of the Commissioner of University
and School Lands, a/k/a the North Dakota
Department of Trust Lands, Defendants and Appellants
- Case Type
- CIVIL APPEAL : OIL, GAS AND MINERALS
- Appeal From
Case No. 2018-CV-00143
Northwest Judicial District, McKenzie County
Robin Ann Schmidt
Parties' Statement of Issues
[¶1] Whether the District Court erred in its interpretation of the terms of the Newfield Leases as defined in Newfield’s Complaint.
[¶2] Whether the District Court erred in its interpretation of the phrase “gross proceeds of sale” as stated in the gas royalty provision contained in the Newfield Leases.
[¶3] Whether the District Court erred in declaring the Board of University and School Lands (the “Board”) and Department of Trust Lands the ("Department”) (the Board and the Department hereinafter collectively referred to as the “State”) are not entitled to any additional gas royalty payments from Newfield for gas on which royalty payments have already been made, in addition to any applicable interest and penalties that have accrued as a result of Newfield’s failure to pay such royalty payments, whether or not such royalty payments were reviewed during the audit conducted by the State as alleged in Newfield’s Complaint.
[¶4] Whether the District Court erred in dismissing the State’s request for a judgment ordering that Newfield grant the State an accounting for the production and revenues derived from the Newfield Wells, as defined in the State’s Answer and Counterclaims, in order to determine the gas royalties, interest and penalties owed to the State with respect to the Newfield Wells.
Newfield Exploration Co. (“Newfield) operates numerous gas-producing wells throughout North Dakota. Newfield has entered into leases with the State where gas royalties are paid based upon “gross production or the market value thereof, at the option of the lessor, such value to be based on gross proceeds of sale . . . .” The State initiated an audit of Newfield in June 2016. The State’s audit revealed information the State believed indicated Newfield was improperly paying gas royalties under the terms of the lease. Specifically, the State asserted Newfield was paying royalties based on “gross proceeds less deductions,” which the lease does not allow for. Newfield responded and asserted it paid royalties based on the gross proceeds received from Oneok Rockies Midstream L.L.C. (“Oneok”) under gas purchase agreements. The gas purchase agreements indicate Newfield is paid 70-80% of the proceeds received by Oneok for the sale of gas purchased from Newfield.
Newfield initiated litigation requesting a judgment declaring the royalty payments at issue were properly calculated based on the gross amount paid to Newfield by Oneok. Both parties moved for summary judgment. The district court held the terms of the lease dictated the State be paid based upon the gross amount Newfield receives from Oneok. On appeal, the State argues the court erred in interpreting the lease and effectively requires the State to share in post-production costs.
(Note: Attachments may not be available for recently filed cases and/or confidential documents.)
|Seq. #||Filing Date||Description||Attachment|
|1||03/19/2019||NOTICE OF APPEAL : 03/19/2019|
|2||03/26/2019||NOT. OF FILING NOT. OF APPEAL AND PROOF OF SERV.|
|3||03/26/2019||Notice served on David P. Garner, Lawrence Bender and Spencer D. Ptacek|
|4||03/26/2019||Rec'd $125.00 filing fee|
|5||04/22/2019||ELEC. RECORD ON APPEAL DATED APRIL 18, 2019 (ENTRY NOS 1-73)|
|8||04/29/2019||Oral Argument Request by Appellants|
|9||05/06/2019||Rec'd 6 copies of ATB & ATA from CSD|
|10||05/22/2019||NOTICE OF ORAL ARGUMENT SENT|
|11||05/22/2019||MOT. EXT/TIME APPELLEE BRIEF|
|12||05/23/2019||ACTION BY ACTING CHIEF JUSTICE - Granted : 06/07/2019|
|13||05/23/2019||MOTION FOR Reconsideration of Extension|
|14||05/24/2019||ACTION BY ACTING CHIEF JUSTICE (Reply brief due 9 a.m., June 18) - Denied|
|15||05/24/2019||MOT. EXT/TIME REPLY BRIEF (sua sponte)|
|16||05/24/2019||ACTION BY ACTING CHIEF JUSTICE (9 a.m.) - Granted : 06/18/2019|
|19||06/10/2019||Rec'd 6 copies of AEB & AEA from CSD|