HININGER v. KAISER

No. 62951.

738 P.2d 137 (1987)

Mollie HININGER, Herbert Leroy Hininger, Lucille Ann Hildinger, C.A. Norman, Chloe Norman, Fred Tuttle and Leola Tuttle, Appellants, v. Herman George KAISER, Francis Oil & Gas, Inc., a corporation, Santa Fe-And-over Oil Company, a corporation, Marjorie Thomas, Ran Ricks, Jr., Bill J. Sparks, Mary Jane Mathis, Don Mathis, Bannockburn Oil Company, Carl Rosen, and Bobby Van Mercer, Appellees.

Supreme Court of Oklahoma.

As Corrected May 29, 1987.


Attorney(s) appearing for the Case

Gregory L. Mahaffey, J. Jayne Jarnigan, Mahaffey & Gore, P.C., Oklahoma City, for appellants.

J. Michael Medina, Keith F. Sellers, Holliman, Langholz, Runnels & Dorwart, Tulsa, for appellees.

John C. Moricoli, Jr., Gregory S. Sherman, Moricoli, Wilson, Harris & Dubberstein, Oklahoma City, for appellee, Marjorie Thomas.


KAUGER, Justice.

The issues presented concern what expenses may properly be deducted from a lessee's profits to determine if there is production in paying quantities under the habendum clause of an oil and gas lease. The questions posed are: 1) whether overriding royalties paid by the lessee to a third party may be deducted from profits as a cost of production or a lifting expense; 2) whether administrative expenses qualify...

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