Regmund v. Talisman Energy USA, Inc., No. 4:16-CV-02960, 2019 U.S. Dist. LEXIS 110363 (S.D. Tex. 2019)
The Plaintiffs, a putative class of lessors under oil and gas leases, brought claims against Talisman Energy USA, Inc. (“Talisman”) relating to Talisman’s “volumetric” method of calculating royalties. Some of the gas produced is “wet gas,” which requires stabilization prior to sale, which results in a reduction or “shrinkage” of the volume sold. Talisman commingled the production from numerous leases for processing at the stabilization facility, and then allocated the sales volumes back to individual leases on the basis of wellhead metered volumes (a “volumetric” allocation), and applied an estimate of overall shrinkage.
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