GAS CONTRACT HELD UNAMBIGUOUS-PRICE DETERMINED ON SALE OF RESIDUE GAS, NOT LIQUIDS

摘要

The court in ConocoPhillips Co. v. Incline Energy, Inc., 189 S.W.3d 377 (Tex. App.-Eastland 2006, no pet. h.), construed the pricing provision of a gas purchase contract calling for ConocoPhillips, the buyer, to pay Incline, the seller, "the price per MMBTU" equal to "eighty percent (80 percent) of the price(s) which Buyer receives under its Resale Agreement(s) for all gas purchased and sold hereunder at the Point(s) of delivery. . . ." 189 S.W.3d at 379. ConocoPhillips processed the gas and sold the extracted liquids. It then sold the residue gas and based its payment to Incline for its unprocessed gas on 80 percent of the weighted average residue gas price applied to the full volume and heating value (MMBTUs) of Incline's entire gas stream. Incline sued ConocoPhillips for breach of contract, contending that it should be paid for the processed liquids sold by ConocoPhillips in addition to the residue gas.