Devon Energy Corporation v. Kempthorne

Devon (plaintiff) relied for seven years on informal DOI (defendant) guidance letters to deduct coalbed methane compression and dehydration costs when calculating royalties owed to the federal government, until DOI issued a final order rejecting that interpretation and ordering retroactive payment; Devon argued the costs were necessary transportation costs since the gas couldn't be piped to market without them, and separately argued its reliance on the guidance documents should bar retroactive liability.