Diamond Shamrock Exploration Co. v. Hodel

JOHN R. BROWN, Circuit Judge:

The issue raised is whether payments by a pipeline-purchaser to a lessee-producer of a federal oil and gas lease pursuant to a take-or-pay clause in its gas sales contract with the pipeline-purchaser are subject to payment of a royalty when the take-or-pay payment is received, not as value for gas actually taken, but as part of the take-or-pay obligation under the contract. This is another of the now prevalent take-or-pay cases with which we and others are now frequently faced. It comes to us as consolidated appeals from conflicting judgments rendered in the…