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Bursell makes the inappropriate assumption that lost portions of
this core contained oil bearing sands in the same proportion as
the portion of the core recovered. Bursell's general testimony
provides no support for the large, fixed fees that Cromwell
agreed to pay.
Moreover, Bursell emphasized activities and data from the
Kern River area in California. Cromwell, however, had no rights
to acreage in the Kern River area, and Cromwell had no plans to
acquire any. Also, the heavy oil located in the Kern River area
had viscosity levels of only 4,000 to 5,000 centipoise (cp) at
reservoir temperature and was not comparable to Cromwell's Burnt
Hollow property with oil viscosity levels of 1,000,000 cp at
reservoir temperature.
Significantly, Bursell neither opines as to whether Cromwell
paid fair market value for its tar sands acreage nor as to the
reasonableness of the specific transactions that Cromwell entered
into.
Walter Austin, another of petitioners' experts, regarding
Cromwell's lease of tar sands acreage incorrectly assumes that
Cromwell was only obligated to pay the $610 cash portion of the
royalties due per unit for the first 3 years. He viewed the
remainder of Cromwell's royalty obligation as contingent. Austin
never opines that Cromwell's annual 20-year, $5,000 per unit
stated royalty obligation to TexOil represented fair market
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