Oil & Gas Litigation Analysis

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Joel Reese, Attorney

Home › Cases › Devon Energy Production Co., L.P. v. United States Department of the Interior
Royalty Disputes

Devon Energy Production Co., L.P. v. United States Department of the Interior

U.S. Court of Appeals for the Tenth Circuit 24-6132 resolved

The Tenth Circuit reversed ONRR's $2.8 million disallowance of gas treatment deductions claimed by Devon Energy Production, holding the agency acted arbitrarily and capriciously by applying 30 C.F.R. § 206.150(b) in contravention of a controlling prior settlement agreement. The panel determined the settlement governed over 80% of disputed federal lease royalties and remanded for remedy determination under a two-factor vacatur test.

Analysis

Tenth Circuit: Settlement Agreement Trumps ONRR Regulations in $2.8 Million Federal Lease Gas Treatment Deduction Dispute

The Tenth Circuit reversed ONRR's $2.8 million disallowance of gas treatment deductions claimed by Devon Energy Production, holding the agency acted arbitrarily and capriciously by applying 30 C.F.R. § 206.150(b) in contravention of a controlling prior settlement agreement. The panel determined the settlement governed over 80% of disputed federal lease royalties and remanded for remedy determination under a two-factor vacatur test.

Joel Reese  |  Jul 06, 2026
Market Value at the Well Administrative Law Federal Lease Royalties Gas Treatment Deductions ONRR