Phillips Petroleum Co. v. Cabot Carbon Co.

Prior to March 10, 1944, Cabot owned oil and gas leases on certain lands and unleased gas rights in other lands in the Hugoton Gas Field in Texas County, Oklahoma, and Hansford County, Texas. Approximately thirty-nine thousand acres were in Oklahoma. On March 10, 1944, a contract was entered into wherein Cabot assigned and transferred its interests to Phillips. The consideration for such transfer and assignment was $530,673.50 in cash, the customary one-eighth royalty of all gas produced and one-fourth of the remaining seven-eighths of all gas produced. It is this last provision that prompted…