Abstract

ABSTRACT Paper traces the guidelines adopted by the Courts by which fair market value of natural gas can be determined. A history of the Natural Gas Industry is discussed with special emphasis on conditions that caused certain factors to be used in market value calculations. Each new factor on determination used gave greater comparability of natural gas in any particular case. Vela v. Texas Oil & Gas Corporation was the most influential and set factors that should be used in such determination of fair market value. The weighted average approach is the best method to determine the fair market value of natural gas; follows Vela's definition of comparable gas and uses good engineering precepts.

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