Opinion ID: 1829970
Heading Depth: 4
Heading Rank: 1

Heading: Misrepresentation/concealment of material facts

Text: Exxon was required under the leases to retain for not less than two years all supporting information for the affidavits submitted attesting to gross production and gross sales, and it was aware that its payments and supporting information were subject to audit. The record shows that Exxon continued to provide information relating to production that it was not required to retain beyond the two-year period required by the leases. There is no evidence indicating that Exxon intentionally withheld information. To the contrary, at Exxon's request, Exxon representatives met with Cone in Montgomery on February 27, 1995, after Cone had requested by letter on January 26, 1995, that information be provided and or clarified on Exxon's monthly royalty detail. Cone documented the substance of that meeting with a March 24, 1995, memorandum to James A. Griggs, director of the State Lands Division of DCNR, with a copy to Bob Macrory, Assistant Commissioner [19] of DCNR. That memorandum clearly shows that DCNR was fully aware that Exxon was interpreting the leases differently than was DCNR and that Exxon did not misrepresent itself as being in agreement with DCNR's interpretation or that Exxon intended to comply with the DCNR's interpretation. The same memorandum also clearly shows that DCNR fully intended to audit Exxon for each of the issues on which its claims were based. The State did not present sufficient evidence of concealment by Exxon of its interpretations of the lease language or of its intentions regarding the methodology it used in calculating the royalties.