Union Pacific Resources Co. v. Texaco, Inc.

TAYLOR, Justice.

The primary question in these consolidated appeals concerns the interpretation of a contract. The contract is an operating agreement formed by four oil and gas companies who own exclusive rights to exploit minerals on certain lands in Wyoming. The contract allocates expenses and profits for natural gas exploration and production. The allocation of profit varies depending upon the geologic formation from which production is achieved. After the parties executed the contract, a natural gas well capable of significant production was discovered in one formation. Subsequently, the…