Ashland Oil, Inc. v. Phillips Petroleum Co., s. 79-1009
| Decision Date | 14 November 1979 |
| Docket Number | 79-1096 and 79-1108,Nos. 79-1009,s. 79-1009 |
| Citation | 607 F.2d 335 |
| Parties | ASHLAND OIL, INC., Plaintiff-Appellant, Cross-Appellee, v. PHILLIPS PETROLEUM COMPANY, Defendant-Appellee, Cross-Appellant, and United States of America, Intervenor-Appellee, Cross-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Gerald Sawatzky, Wichita, Kan. (John M. Imel, Tulsa, Okl., Arloe W. Mayne, Lillian Williams, Ashland, Ky., W. O. Strong, III, Houston, Tex. and of counsel, Foulston, Siefkin, Powers & Eberhardt, Wichita, Kan., Fulbright & Jaworski, Houston, Tex., and Moyers, Martin, Conway, Santee & Imel, Tulsa, Okl., on brief), for plaintiff-appellant, cross-appellee.
Don L. Jemison, Bartlesville, Okl. and L. K. Smith of Boone, Ellison & Smith, Tulsa, Okl. (Kenneth Heady and C. J. Roberts, Bartlesville, Okl., on brief), for defendant-appellee, cross-appellant.
John E. Lindskold, Dept. of Justice, Washington, D. C., for intervenor-appellee, cross-appellant.
Before SETH, Chief Judge, BARRETT and DOYLE, Circuit Judges.
This case was remanded for the development of additional facts relating to and to provide a basis for the valuation of the helium at the wellhead by the use of a work-back method. See Ashland Oil, Inc. v. Phillips Petroleum Company, 554 F.2d 381 (10th Cir.). The trial court was to determine a proper starting place and value for such method, the plant cost, return on investment, the costs chargeable to production of liquid hydrocarbons, and related facts.
On remand the trial court selected as a starting point the stated value of helium used in the contract between Phillips and the Government. For a brief description of the contract, see 554 F.2d, at 384. This determination by the court was based on the expert testimony relating to pure helium values and other possible starting points for the valuation of helium. A starting place for the work-back method can be at any point in the production processing sale chain where a dollar figure can be established by reliable evidence, and which may be demonstrated to be a realistic value. We see no objection to the use of the contract value for this purpose. It was a negotiated figure arrived at by parties dealing at arm's length. There may have been other considerations involved, but on remand these do not appear to have been substantial enough to cast doubt for our purposes on the contract price. This figure was not greatly different from those used in the contracts for other extraction plants.
Using this figure the trial court made findings as to plant investment and...
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