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Energy

Anadarko Wins in Court (APC)

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published
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Money_stack_pic_2Back in 1998-1999, the Clinton administration wrote contracts for offshore drilling that were supposed to provide royalty relief for oil companies if oil prices fell below $25/barrel. Somehow, the contracts were written without a ceiling price. As a result, royalty relief is available on certain leases no matter how high crude oil prices go.

Congress passed a law that would require companies to pay theroyalties when prices hit a certain level or the companies would beineligible to bid on new leases. The chief beneficiary of theincorrectly written contracts was Kerr-McGee, which was acquired in2006 by Anadarko Petroleum Company (NYSE:APC). Kerr-McGee/Anadarko suedto have the contracts enforced as written. On Monday, the Fifth CircuitCourt agreed with the company, denying an appeal from the US Departmentof Interior.

Provided the government does not appeal to the Supreme Court, thematter is now closed and Anadarko has retained its right to royaltyrelief on the leases, no matter what the price of crude rises to.Its shares jumped on the news Tuesday morning, but they’ve given itall back with other oil companies since then.

Paul Ausick
January 14, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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