In Piney Woods Country Life School v. Shell Oil Co., 726 F.2d 225, 228 (5th Cir. 1984), the court interpreted leases that provided for royalties based on market value except when the gas was sold at the well. At issue was the propriety of deducting processing costs from the price used to calculate royalties. See Piney Woods, 726 F.2d at 230. Noting that different calculations were to be used depending on whether the sale or use was "at the well," the court concluded: The purpose is to distinguish between gas sold in the form in which it emerges from the well, and gas to which value is added by transportation away from the well or by processing after the gas is produced. The royalty compensates the lessor or royalty owner for the value of the gas at the well: that is, the value of the gas after the lessee fulfills its obligation under the lease to produce gas at the surface, but before the lessee adds to the value of this gas by processing or transporting it. Id. at 231. In Piney Woods, the WIOs passed expenses to the royalty owner for treating and transporting the natural gas according to a complex formula that compensated it for these expenses and capital investment. See Pine Woods, 726 F.2d at 240. Because the royalty clause provided for payment based on value "at the well," the court rejected the royalty owners' argument that they could not be charged for these expenses as costs of discovery and production and that production costs included any costs necessary to make the gas marketable. In allowing royalty owners to be charged with processing costs, including all post-production expenses relating to processing, transportation, and marketing, the court emphasized "that processing costs are chargeable only because, under these leases, the royalties are based on value or price at the well. Processing costs may be deducted only from valuations or proceeds that reflect the value added by processing." Id. The court noted that the function of processing costs in determining royalties based on market value at the well is to adjust for imperfect comparisons. Deductions for these costs may be "an indirect means of determining what a buyer would have paid at the wellhead." Id.