Apache Deepwater, LLC v. McDaniel Partners, Ltd.

At issue in this case is how,to calculate a production payment reserved in the assignment of four oil and gas leaseholds. The four leases were assigned in one instrument. After two of the leases terminated, a dispute arosé over the production payment’s calculation. The payor asserted the production payment should be reduced to reflect the loss of the underlying mineral-lease interests. The payee disagreed, asserting the production payment burdened the four leases jointly and the assignment included no language authorizing an adjustment to the payment.

The trial court concluded the production…