The purpose of unitization is to prevent waste and maximize recovery by allocating more economically the costs and benefits under the working interest owners' agreement.Īlso, pursuant to the lease, Mobil entered into a Unit Agreement and a Unit Operating Agreement with the other working interest owners. Through unitization, or pooling of the fields, the working interest owners in the various sections of the Unit agree jointly to recover the oil and gas in the Unit without regard to their separate ownerships. ![]() The lease permits sections 20 and 30 to be “unitized” with other sections of the Unit to maximize recovery of the gas reserves, and in December 1982, Mobil and the other working interest owners agreed to unitization. The lease binds the royalty owners and Mobil, and provides, inter alia, that lessees are to pay royalties to the lessors on gas “produced from the leased land and sold.” These interests arise from a lease signed by the parties' predecessors in 1976. The royalty owners have royalty interests in sections 20 and 30 of the Unit. Mobil and TAC also had the right to sell the natural gas it produced from sections 20 and 30 to Natural Gas Pipeline Company of America (NGPL). The Anschutz Corporation (TAC), a Kansas corporation whose principal place of business is in Colorado, had a lease interest in the other half of sections 20 and 30. In July 1982, Mobil became a lessee of one-half of sections 20 and 30 of the Unit. Mobil is a lessee of the royalty owners and a working interest owner on part of the Unit.Īll of the lawsuits, including this one, involve the interpretation of four agreements: (1) the lease, (2) the Unit Agreement, (3) the Unit Operating Agreement, and (4) a ratification agreement to the Unit Agreement entitled “Royalty Owner Joinder in and Ratification and Approval of Anschutz Ranch East Unit Agreement” (collectively, the Agreements). As relevant here, the working interest owners are entities that possess exclusive rights to exploit the natural gas as lessees of certain sections of the Unit. The royalty owners are lessors that possess a property interest in the natural gas produced from two sections of the Unit. The Unit, comprised of sections of oil and gas fields, is owned and leased by separate entities. The lease pertains to a large tract of land along the Wyoming-Utah border known as the Anschutz Ranch East Unit (the Unit). This case is the latest in a series of lawsuits concerning the payment of royalties from sales of natural gas extracted pursuant to an oil, gas, and mineral lease (the lease). We reverse and remand for further proceedings. ![]() (Mobil), cross-appeals an order denying it the defense of collateral estoppel. Plaintiffs, Antelope Company, the Anschutz Family Foundation, and Piedmont Minerals Company (the royalty owners), appeal the trial court's entry of summary judgment. Baker, Denver, CO, for Defendant-Appellee and Cross-Appellant. Bjork, Lindley, Danielson & Baker, Peter A. Rogers, III, Denver, CO, for Plaintiffs-Appellants and Cross-Appellees. Rothgerber Johnson & Lyons, LLP, Frederick J. MOBIL ROCKY MOUNTAIN, INC., a Delaware corporation, Defendant-Appellee and Cross-Appellant. ![]() ANTELOPE COMPANY, a Colorado limited partnership the Anschutz Family Foundation, a Colorado nonprofit corporation and Piedmont Minerals Company, a Colorado general partnership, Plaintiffs-Appellants and Cross-Appellees, v.
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