[00:00:00] Speaker 02:
All right, our next case is Phelps versus Noble Energy, case number 24-1005.

[00:00:10] Speaker 02:
Counsel, you may proceed.

[00:00:11] Speaker 03:
Thank you, Your Honor.

[00:00:13] Speaker 03:
I am George Barton.

[00:00:14] Speaker 03:
I'm arguing on behalf of Phelps Oil and Gas, to which I refer to simply in this argument as Phelps.

[00:00:21] Speaker 03:
There's two issues in this appeal, one related to what's referred to in the briefing as the 100%

[00:00:29] Speaker 03:
obligation portion of the applicable future royalty calculation method, the second issue is related to the 50% obligation portion.

[00:00:38] Speaker 03:
I first want to address the 100% obligation claim and specifically Phelps's contention that the district court erred in denying

[00:00:52] Speaker 03:
well, in granting Noble Energy's motion for summary judgment on Phillips' claim that it was entitled to its royalty share of DCP Midstream's $17.5 million consideration that it paid to, which was the principal part of its consideration that it paid to settle Noble Energy's $34 million price deficiency claim against DCP.

[00:01:22] Speaker 03:
And really this, in essence, this issue goes back to, it really was fully addressed in summary judgment briefing that was submitted by both Noble and Phelps in March of 2016 and May of 2016.

[00:01:44] Speaker 03:
So in the March 2016 summary judgment motion that Noble filed

[00:01:51] Speaker 03:
Noble argued that Phelps was not entitled to any share of DCP $17.5 million settlement consideration.

[00:02:02] Speaker 03:
And Phelps, on the other hand, argued that it was entitled to summary judgment on that claim because Phelps argued that its entitlement was consistent with this court's decision in Watts and the Colorado Court of Appeals decision in Westroom, Westroom as well.

[00:02:20] Speaker 03:
So initially when Judge Blackburn, District Judge Robert Blackburn ruled on this on September 26, 2017, he determined that Phelps was actually entitled to summary judgment on the issue that it did have an appropriate royalty share, may have an appropriate royalty share on the $17.5 million consideration that DCP paid to settle

[00:02:49] Speaker 03:
Nobles' $34 million claim.

[00:02:54] Speaker 03:
But he didn't grant summary judgment in favor of Phelps, but he denied Nobles' summary judgment motion.

[00:03:02] Speaker 03:
And so subsequently though, in an order that Judge Blackburn entered a year later, in September of 2018, Judge Blackburn determined that Phelps was required to prove something additionally, and that Phelps had to

[00:03:20] Speaker 03:
proved that the $17.5 million consideration that DCP agreed to pay as part of that March 2010 settlement.

[00:03:32] Speaker 02:
You keep saying agreed to pay, agreed to pay, but the agreement wasn't to pay noble, it was to invest in capital improvements to its own operations.

[00:03:43] Speaker 02:
Isn't that what the

[00:03:45] Speaker 02:
settlement was?

[00:03:46] Speaker 03:
Yes, that was the settlement.

[00:03:48] Speaker 02:
So there was no payment to Noble.

[00:03:52] Speaker 02:
17.5 wasn't paid to Noble.

[00:03:54] Speaker 02:
That's correct.

[00:03:56] Speaker 02:
And to the extent the 17.5 is going to generate additional revenues that go to Noble, Noble will have to pay on that, correct?

[00:04:10] Speaker 02:
Yes.

[00:04:10] Speaker 02:
Okay.

[00:04:11] Speaker 02:
But as far as the 17.5,

[00:04:15] Speaker 02:
That never went to Noble.

[00:04:17] Speaker 02:
And what Judge Blackburn said is that Phelps needed to show that Noble received value independent of increased production and revenue.

[00:04:27] Speaker 02:
And he says that's consistent with Watts.

[00:04:29] Speaker 02:
So are you saying that Judge Blackburn was wrong to say that?

[00:04:32] Speaker 03:
Yes.

[00:04:33] Speaker 02:
All right.

[00:04:33] Speaker 02:
Tell us why.

[00:04:34] Speaker 03:
Because Watts holds that the lessor is entitled to receive

[00:04:42] Speaker 03:
its share of whatever settlement consideration is paid by the settling purchaser to resolve the gas producer's claim against the settling purchaser.

[00:04:56] Speaker 03:
And it extends to any form of consideration that's paid by DCP in this case to resolve the $34 million price deficiency claim that was asserted by Noble against DCP.

[00:05:09] Speaker 03:
Well, Counsel, if your theory is correct,

[00:05:13] Speaker 04:
that Phelps was entitled to some payment from that consideration for infrastructure upgrades, but which my understanding is Phelps also benefits because that leads to increased production, thereby increased royalties.

[00:05:26] Speaker 04:
So if your theory is correct, why is Noble's argument that that's essentially double dipping into royalties, why is that wrong?

[00:05:34] Speaker 03:
Well, I think it's wrong, Your Honor, because it's really, I mean, the consideration that gets paid is we're going to, you know, instead of paying you money, we're going to pay, you know, we're going to agree to invest in our own infrastructure and pay $17.5 million.

[00:05:54] Speaker 04:
And part of the agreement was... No, but they're spending.

[00:05:57] Speaker 04:
But they're not paying it to Noble.

[00:05:59] Speaker 04:
And so there's no trickle down there that would go to the royalty owners.

[00:06:02] Speaker 04:
I think Judge Mathison's saying you keep saying it was paid, but it was spent.

[00:06:05] Speaker 04:
So it's a little bit different, isn't it?

[00:06:08] Speaker 03:
Well, it was part of the settlement consideration.

[00:06:11] Speaker 03:
And it was an express part of the settlement consideration.

[00:06:15] Speaker 03:
And both parties agreed that that settlement consideration was for the primary benefit of Nobles.

[00:06:21] Speaker 03:
So that was part of the settlement consideration that DCP agreed to pay Noble to resolve the $34 million pricing claim.

[00:06:30] Speaker 03:
And if you look at the decision in Watts, Your Honor, it says that the royalty owner is entitled to its royalty share of whatever settlement consideration is paid by the gas purchaser to the gas producer to resolve that claim.

[00:06:48] Speaker 03:
And it's very, very extensive in the way that the Watts decision addresses it.

[00:06:54] Speaker 03:
It says less wars are entitled to a royalty on the fair,

[00:06:57] Speaker 03:
market value of the consideration paid by the settling gas purchaser.

[00:07:01] Speaker 03:
That was part of the fair market value of what DCP paid to Noble to resolve the $34 million price deficiency claim.

[00:07:11] Speaker 01:
Well, the problem you have is that these were proceeds of the settlement, as in Watts, but these proceeds are clearly not royalty bearing, at least until after this investment

[00:07:25] Speaker 01:
is made and you see the increased royalties at which point Phelps will get its share.

[00:07:32] Speaker 01:
This all makes sense if the consideration here of the 17.8 million or 0.5 million was royalty bearing, but it clearly isn't at this point.

[00:07:46] Speaker 03:
Well, I think if you look at the Watts decision, this is really what this court was looking at in Watts.

[00:07:55] Speaker 03:
They really addressed those issues, Judge Moritz.

[00:07:58] Speaker 03:
They said the gas producer cannot escape the duty to pay royalties merely by disguising the form of consideration received in the settlement of pricing disputes.

[00:08:09] Speaker 03:
And this is a direct quote from the watch decision.

[00:08:14] Speaker 03:
This is true irrespective of the collateral benefits the items of consideration have conferred upon lessors.

[00:08:23] Speaker 03:
That emphasizes the extent to which this court was emphasizing that whatever the form of consideration is, the royalty owners are entitled to their royalty share of that consideration.

[00:08:37] Speaker 02:
Let me ask you this.

[00:08:39] Speaker 02:
What if instead of an agreement to invest in infrastructure, parties get together and DCP says, I'll tell you what.

[00:08:52] Speaker 02:
If we can make this go away, we'll donate $17.5 million to the local food bank as consideration for settling this dispute.

[00:09:09] Speaker 03:
Does the 100% rule apply to that?

[00:09:12] Speaker 03:
Well, I think, you know, the thing that we're talking about here, Judge Massey, the best way to answer this is they

[00:09:19] Speaker 02:
Well, what's the answer?

[00:09:21] Speaker 02:
Does any consideration, wherever it goes?

[00:09:24] Speaker 03:
I think the answer is yes, under the Watts decision, and there's good reason for that.

[00:09:29] Speaker 03:
You know, if DCP had been found liable for the $34 million in price deficiencies, then clearly the royalty owners would have been entitled to their royalty share of the $34 million that was the price deficiency.

[00:09:48] Speaker 03:
But here, they entered into a settlement agreement where DCP agreed to invest $17.5 million in their own infrastructure, primarily for the benefit of Noble.

[00:10:03] Speaker 03:
And that was part of the settlement consideration.

[00:10:06] Speaker 03:
They could have paid it in cash to Noble, that's true, but they structured it

[00:10:11] Speaker 03:
So instead, they were investing the $17.5 million in their own infrastructure, which had a benefit to Noble.

[00:10:19] Speaker 03:
That's part of the settlement consideration.

[00:10:20] Speaker 02:
Isn't that what Judge Blackburn said that Phelps needed to show?

[00:10:25] Speaker 02:
That the investment in the infrastructure would benefit Noble apart from increased production and revenue.

[00:10:34] Speaker 02:
In other words, Judge Blackburn said exactly what you just said, which is, if it's going to benefit Noble,

[00:10:40] Speaker 02:
If you can show it's going to benefit Noble, then okay, fine.

[00:10:46] Speaker 02:
But apparently that wasn't the case.

[00:10:51] Speaker 02:
Did you show that?

[00:10:51] Speaker 02:
What's the showing?

[00:10:52] Speaker 02:
Did Phelps even try to make a showing that it would benefit Noble?

[00:10:56] Speaker 03:
Well, I think we made some arguments to that effect.

[00:10:59] Speaker 03:
But certainly the $17.5 million that DCP agreed to invest

[00:11:08] Speaker 03:
in its own infrastructure was going to have a benefit to Nobles' future gas production and future gas revenues.

[00:11:16] Speaker 02:
And Judge Blackburn said, that's fine, prove it, show it, show me that that's the case and then we can talk about royalties.

[00:11:24] Speaker 02:
But isn't that exactly what he asked Phelps to do?

[00:11:29] Speaker 03:
That is exactly what he asked Phelps to do and our position is... Yeah, but when I just quoted or stated Judge Blackburn's

[00:11:38] Speaker 02:
holding on this a few minutes ago, you said it was wrong.

[00:11:42] Speaker 03:
We think it is wrong.

[00:11:43] Speaker 03:
That additional requirement is wrong because that's not, I mean, Phelps should be entitled to a royalty on the entire settlement consideration that was paid.

[00:11:54] Speaker 02:
Oh, now it's the whole 17.5.

[00:11:57] Speaker 02:
Well, yes.

[00:11:57] Speaker 02:
The 100% applies to the whole 17.5.

[00:12:00] Speaker 02:
Well, that's the settlement consideration.

[00:12:03] Speaker 02:
What does the record in district court show?

[00:12:05] Speaker 02:
in terms of Phelps proving that that had value to Noble.

[00:12:11] Speaker 02:
What does the record show on that?

[00:12:14] Speaker 03:
Well, the record shows that essentially the record shows that there was a settlement agreement that DCP invested $17.5 million in its own infrastructure and that

[00:12:28] Speaker 03:
DCP agreed to do that to resolve the $34 million price deficiency claim that Noble was asserting against DCP.

[00:12:40] Speaker 03:
So that settlement consideration, that's money that DCP paid out to settle the $34 million price deficiency claim.

[00:12:52] Speaker 01:
And under the Watts decision... But it didn't pay it out to Noble.

[00:12:57] Speaker 03:
It didn't pay it out to Noble.

[00:12:58] Speaker 01:
It invested that money, and those investments became royalty bearing.

[00:13:03] Speaker 01:
Right, and that- And Noble then gets, as does your client, their share of that.

[00:13:11] Speaker 01:
So that's the consideration that Noble got was the right to the future royalties off of that increased production.

[00:13:22] Speaker 01:
And the fair market value- That's the consideration that they got.

[00:13:24] Speaker 03:
Right, and the fair market value of that consideration was $17.5 million because that's what DCP agreed to pay to settle the price deficiency claim.

[00:13:36] Speaker 04:
Counsel, can I ask the same question perhaps differently?

[00:13:39] Speaker 04:
The district court findings, I believe it's summary judgment, were that there was no evidence provided by Phelps.

[00:13:44] Speaker 04:
I heard you say a minute ago, well, we made arguments and I can assume one of those arguments was, well, Watts doesn't require us to present any evidence because as a matter of law, we're right here.

[00:13:53] Speaker 04:
Did Phelps present any evidence?

[00:13:55] Speaker 04:
So as we're reviewing the sedentary judgment order, we can say either there is a genuine issue of fact here for us to send it back down, or there's not, because Phelps didn't even attempt to present any evidence or counter any facts that were submitted by Noble.

[00:14:12] Speaker 03:
Well, I don't think Phelps was able to produce any evidence in honesty, Judge Federico, that there was, you know,

[00:14:22] Speaker 03:
value to noble independent of the increased gas production and increased revenues because that's what the $17.5 million was paid so that DCP's infrastructure could be improved.

[00:14:39] Speaker 03:
But again, our position was, and we argued this to both Judge Blackburn and we argued it in the 2023 litigation, was if you look at Watts, this

[00:14:50] Speaker 03:
the settlement, all these consideration things that are, settlement considerations will revolve, is that, you know, the settlement consideration, the royalty owners entitled to their share of that settlement consideration, irrespective of the collateral benefits, the items of consideration have conferred upon lessors, because that's really what your questions are about here.

[00:15:13] Speaker 03:
Well, the royalty owners are getting these collateral benefits from the fact that they're in the future, they're going to get increased royalties.

[00:15:21] Speaker 03:
That's what Watts rejected.

[00:15:22] Speaker 03:
That's why Watts was so significant.

[00:15:27] Speaker 03:
And it was adopted again.

[00:15:28] Speaker 03:
The Watts approach was adopted by the Colorado Court of Appeals in Western.

[00:15:34] Speaker 03:
The royalty owners share a bit.

[00:15:38] Speaker 03:
It extends to any part of the settlement, irrespective of the collateral benefits that the lessors are receiving.

[00:15:45] Speaker 03:
And that's a binding decision of this court that was explicitly adopted by the Colorado Court of Appeals in Westermann.

[00:15:55] Speaker 02:
Thank you, counsel.

[00:15:56] Speaker 02:
Your time has expired.

[00:15:58] Speaker 02:
Thank you.

[00:16:14] Speaker 00:
Good morning, may it please the court.

[00:16:17] Speaker 00:
The problem with both of Phelps' arguments is that Phelps has already been paid the royalties it seeks.

[00:16:23] Speaker 00:
It has already been paid royalties on the $17.5 million that DCP promised to invest in its own system, and it's already been paid royalties on 50% of the gas that it claims DCP improperly retained.

[00:16:37] Speaker 00:
What Phelps actually seeks here is a double recovery of royalties, and the district court correctly determined

[00:16:43] Speaker 00:
that nothing in the Holman settlement or in the law entitles it to such a double recovery.

[00:16:49] Speaker 00:
I'll start with the $17.5 million promise that was the focus of Mr. Barton's argument.

[00:16:56] Speaker 00:
The primary port to understand here, and the panel seems to readily grasp this, is that this was not a payment from DCP to Noble.

[00:17:03] Speaker 00:
Instead, it was a promise by DCP to make certain improvements in its gathering and processing system in ways that would benefit Noble through increased future production.

[00:17:13] Speaker 00:
One example would be larger capacity pipes that would reduce line pressures and allow Noble and other producers to push more volume through those pipes going forward.

[00:17:24] Speaker 00:
So Noble wasn't paid the 17 and a half million.

[00:17:27] Speaker 00:
So the district court rightfully asked the question then, what benefit did Noble actually obtain from that settlement consideration?

[00:17:36] Speaker 00:
Phelps previously disputed that Noble got some kind of benefit beyond increased future production, but it no longer disputes that now.

[00:17:44] Speaker 00:
And Phelps also doesn't dispute that Noble properly paid Phelps and other royalty owners on that increased future production as it was realized.

[00:17:53] Speaker 00:
So what is left of Phelps' claim?

[00:17:57] Speaker 00:
Phelps claims that Noble somehow violated the rule of Watts and Westerman in not paying royalties on the entirety of this $17.5 million, and that's just not right.

[00:18:08] Speaker 00:
The rule of those cases is that you can't cheat royalty owners

[00:18:13] Speaker 00:
by settling a pricing claim for non-royalty bearing consideration, and then not pay royalties on the value of that consideration.

[00:18:20] Speaker 00:
But that didn't happen here.

[00:18:22] Speaker 00:
Noble agrees the 17.5 million was consideration for settlement of a pricing claim, but we paid royalties on it.

[00:18:30] Speaker 00:
Again, the only benefit of that 17.5.

[00:18:33] Speaker 02:
What do you mean you paid royalties on it?

[00:18:35] Speaker 00:
Could you explain?

[00:18:36] Speaker 00:
Certainly.

[00:18:37] Speaker 00:
So the district court found, and now it is no longer disputed,

[00:18:42] Speaker 00:
Only benefit Noble obtained from that term of the settlement agreement that DCP promised was increased future production going forward.

[00:18:52] Speaker 00:
As those capital projects were built and put online in Nobles, excuse me, in DCP's gathering and processing system, it enabled Noble to produce more gas from its wells, including wells of royalty owners like Phelps.

[00:19:08] Speaker 02:
Okay, I understand.

[00:19:08] Speaker 02:
So you're talking about paying royalties

[00:19:12] Speaker 02:
in the future after the seventh.

[00:19:16] Speaker 00:
Yes, that's correct.

[00:19:17] Speaker 02:
Let me just ask you though, so the dispute when the claim was for 34 million in underpayments, I mean we're talking right now about the 17.5 and the increased production and so forth going forward, but if we look backwards,

[00:19:39] Speaker 02:
The dispute was over underpayments in the past and the settlement of 17.5 million, couldn't it be interpreted as addressing or even conceding that there were underpayments going back and that the 17.5 was to account for the failure to pay.

[00:20:08] Speaker 02:
So why wouldn't that give Phelps an argument that at least something in the 17.5 isn't about future royalties, but really compensating them for royalties that they should have received?

[00:20:25] Speaker 02:
I mean, that's why there was a dispute in the first place.

[00:20:30] Speaker 02:
What's wrong with that argument?

[00:20:33] Speaker 00:
Maybe they haven't made it.

[00:20:34] Speaker 02:
I don't know.

[00:20:34] Speaker 02:
It just occurred to me.

[00:20:37] Speaker 00:
So the $17.5 million promise was really but one piece of the settlement agreement, one component of the consideration that DCP gave to Noble.

[00:20:46] Speaker 00:
And your honor is correct, it was in settlement of Noble's claims for underpayment of past production.

[00:20:54] Speaker 00:
But all that does is satisfy the first prerequisite under the Watson-Westerman line of cases, that the consideration be given to the producer or the lessee

[00:21:05] Speaker 00:
like Noble in settlement of a past pricing claim.

[00:21:09] Speaker 00:
And we don't contest that.

[00:21:10] Speaker 00:
That was the dispute between Noble and DCP that was the subject of the Noble audit.

[00:21:16] Speaker 00:
But the second piece of the Watts-Westerman calculus is to determine what the value of that consideration actually was to Noble here.

[00:21:28] Speaker 00:
And that comes right out of the Watts case.

[00:21:32] Speaker 00:
I'm quoting from the Watts case that the amount that's royalty bearing is, quote, whatever settlement consideration the lessee receives.

[00:21:39] Speaker 00:
That's at 115 F3rd at 793.

[00:21:43] Speaker 00:
You see similar language in the Westerman case.

[00:21:45] Speaker 00:
So that was the exact inquiry that Judge Blackburn undertook.

[00:21:49] Speaker 00:
Because this wasn't a payment from DCP to Noble, if it had been, that would have been a very straightforward

[00:21:55] Speaker 00:
he determined what is the value of this beyond increased future production, which everybody agrees Noble properly paid royalties on.

[00:22:03] Speaker 00:
And he allowed plaintiffs a supplemental period of discovery to try to determine that value.

[00:22:08] Speaker 00:
They were not able to come up with anything.

[00:22:11] Speaker 00:
They tried to build a case that this was monies that Noble otherwise would have had to pay, but the DCP paid in its stead under the settlement agreement.

[00:22:20] Speaker 00:
There was no such evidence of that.

[00:22:22] Speaker 00:
And I think I just heard Mr. Barton concede that.

[00:22:25] Speaker 00:
So once that's established that there was no value of this settlement consideration to Noble beyond future production, and it's no longer disputed that Noble properly paid those royalties going forward, there's nothing left of this claim.

[00:22:40] Speaker 04:
But aren't they saying that the initial shortfall was $34 million?

[00:22:43] Speaker 04:
And but for the settlement agreement, if this had been a cash payment of the $34,000, they would have gotten their cut.

[00:22:49] Speaker 04:
And so the fact that Noble decided that instead of taking cash, we'll allow you this promise, and that will be part of the consideration.

[00:22:57] Speaker 04:
Then they got cheated out of their share.

[00:22:59] Speaker 04:
I mean, isn't that what this is about?

[00:23:02] Speaker 00:
If there had been some evidence that Noble accepted that settlement term in lieu of a cash payment, that might be a different situation.

[00:23:09] Speaker 00:
But there was no such evidence in the record.

[00:23:11] Speaker 00:
This was a good faith settlement, an arm's length settlement, and the best settlement that Noble could negotiate with DCP under the circumstances.

[00:23:19] Speaker 00:
And it's important to remember that Nobles and its royalty owners' interests are aligned here.

[00:23:23] Speaker 00:
Noble was claiming it had been underpaid from the get-go.

[00:23:26] Speaker 00:
That was the purpose of these audits that occur quite regularly between producers and their gatherer processors like DCP.

[00:23:32] Speaker 00:
Noble wanted to get as much money as it could because if we assume 12% royalty burden, it was going to get 88% of the benefit of the seller.

[00:23:42] Speaker 00:
So there was no evidence of collusion here or that this term was in lieu of a cash payment or that this term represented monies that Noble otherwise would have had to pay and the district court correctly granted summary judgment on that claim.

[00:23:57] Speaker 00:
I'd like to turn now to the 50% royalty claim that Mr. Barton didn't address just to make sure that we've covered that.

[00:24:04] Speaker 00:
Quickly, Phelps contends here as they did below that Noble breached paragraph 6A2 of this Holman settlement.

[00:24:12] Speaker 00:
But that provision plainly applies only when DCP, quote, returns a percentage of the provider's sale proceeds to Noble.

[00:24:21] Speaker 00:
And that just didn't happen with respect to these disputed audit claims.

[00:24:25] Speaker 00:
There were no proceeds returned to Noble.

[00:24:27] Speaker 00:
An example is the vapor recovery claim or the VRU claim that you've seen in the briefing.

[00:24:33] Speaker 00:
Very briefly, the basis of that audit claim was that DCP installed this equipment, these VRU units, on its gathering system

[00:24:43] Speaker 00:
captured vapors that flashed off the liquids in the gathering system, and then DCP kept those vapors for itself without returning any proceeds to Noble.

[00:24:52] Speaker 00:
That was the basis of the claim.

[00:24:54] Speaker 00:
But as you can see from that example, DCP disputed that, and no proceeds were returned to Noble as that gas was produced, and no proceeds were returned to Noble in the settlement of that claim.

[00:25:07] Speaker 00:
So paragraph 6A2 of the Holman Settlement Agreement was just never implicated, and that's what Judge Blackburn correctly held.

[00:25:15] Speaker 00:
But there is a provision in the Noble Settlement Agreement, which is 6A4, that ensures that royalty owners like Phelps are paid on the entirety of the gas that comes out of their wells, regardless of whether DCP pays noble on that.

[00:25:34] Speaker 00:
That's the 50% obligation.

[00:25:35] Speaker 00:
The Holman Settlement Agreement, in short, requires Noble to pay Phelps and its royalty owners 100% on the proceeds, the money it receives from DCP, and 50% on the value of the gas for which it is not paid by DCP.

[00:25:51] Speaker 00:
And it doesn't matter if DCP uses that gas as fuel, or if it flares it or vents it, or if as contended in the audit and by Phelps, it improperly retained

[00:26:02] Speaker 00:
volumes for itself that it should not have retained.

[00:26:06] Speaker 00:
And the way that Noble does this, again, this was undisputed below, is that it determines a per unit, typically per millions of BTU value for the gas based on the sales price that DCP returns to it.

[00:26:21] Speaker 00:
It applies that to the entirety of the gas stream.

[00:26:24] Speaker 00:
and it measures the difference between the volume at well heads for royalty owners like Phelps and the volume that DCP sells, and it pays 100% on the volume DCP sells and returns proceeds to it, and it pays 50% on the difference from what came out of Phelps as well.

[00:26:41] Speaker 00:
So Phelps has been paid this 50% obligation.

[00:26:44] Speaker 00:
Any way you look at it, it doesn't matter if these are proceeds that DCP retained or volumes that DCP retained, properly or improperly.

[00:26:54] Speaker 00:
So as two different district judges found, there's no genuine dispute of material fact that Noble complied with a 50% obligation in the Holman settlement as well.

[00:27:07] Speaker 00:
If the court has no further questions, we'll stand on our briefs and ask the court to affirm and put an end to this decade-old lawsuit.

[00:27:14] Speaker 00:
Thank you.

[00:27:15] Speaker 00:
Thank you, counsel.

[00:27:18] Speaker 02:
Thank you for your arguments this morning.

[00:27:20] Speaker 02:
Case will be submitted and counsel are excused.

[00:27:24] Speaker 02:
Corps will be in recess for about 10 minutes.