The U.S. Court of Appeals for the Fifth Circuit today ruled in the matter of Kerr-McGee v. Allred that the Deepwater Royalty Relief Act of 1995 did not authorize Congress to include price thresholds in oil and natural gas leases issued between 1996 and 2000. In a unanimous opinion, the court found that Congress clearly intended to provide volumetric royalty relief to producers, noting such relief could not be reduced based on the price of the commodity. While the court’s ruling was clear, there still remains considerable debate in Congress as to the intent of the statute.  This ruling has tremendous implications for a related matter involving deepwater leases issued in 1998 and 1999 that did not contain price thresholds. In the wake of the court’s ruling, several members voiced their disapproval and vowed to revisit the issue.