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Energy & the Law

Charles Sartain

Posts by Charles Sartain

Truthiness and Truth Edition

Posted in Energy Policy, Hydraulic Fracturing

Truthiness: A quality characterizing a “truth” that a person making an argument or assertion claims to know intuitively, “from the gut” or because it “feels right” without regard to evidence, logic, intellectual examination or facts. Today we explore truthiness in action. Let’s start with the loftiest bully pulpit in the land. The Washington Post gave President… Continue Reading

Louisiana Mineral Code Article 122 Revisited

Posted in Lease Disputes

Co-author Brooke Sizer Creativity abounds: Your 16-year old “explaining” the empty Southern Comfort bottle and the roach clip; President Obama justifying his rejection of Keystone. The Louisiana Supreme Court isn’t much of a supporter, at least in statutory construction. Today we revisit McCarthy v. Evolution Petroleum Corp.  As we reported, the court of appeal had… Continue Reading

Your MSA is in Place – Now What?

Posted in Contract Disputes, operations

Are you an operator who hires contractors on location, … a contractor who hires subcontractors, … the party to be indemnified for injuries to the other party’s employees? This post is for you. Salas v. Allen Keller Company One, LLC, is not about master service agreements, but it is instructive. Want to avoid responsibility for… Continue Reading

Hydrocarbon Exposure Dismissal Affirmed

Posted in operations, Pollution

You might recall previous entries discussing Parr v. Aruba (here is one) – a suit for personal injuries from oilfield pollution (and a $2.9MM verdict for the plaintiffs). Not all similar suits have the same result. You could liken Cerny v. Marathon Oil and Plains Exploration & Production to a game of legal dodgeball.  The “ball… Continue Reading

Another Chesapeake Post-Production Deduction Case

Posted in Lease Disputes

The result was like others we’ve seen. Lessors Win. These wells are in Johnson and Tarrant County, Texas. Lessee Chesapeake Exploration sells to affiliate Chesapeake Marketing through affiliate-operator Chesapeake Operating. Plaintiffs sued Exploration and Operating for underpayments of royalty and overrides. The Takeways This decision demonstrates the reason for special royalty clauses addressing sales to an… Continue Reading

Wage and Hour Claims Menace Producers

Posted in Litigation, Regulations

Co-author Michael Kelsheimer It’s common knowledge: Fair Labor Standards Act audits from the U. S. Department of Labor and lawsuits from workers for overtime violations are coming faster than a blitzing safety on a third and long. Native Oilfield Services is the latest target.  Dispatchers and truck drivers brought suit against Native alleging they were… Continue Reading

Citgo Prevails Over EPA at the Fifth Circuit

Posted in Environmental Policy, Regulations

USA v. Citgo Petroleum highlights the excruciating degree of detail in federal regulations and the gymnastics the EPA will employ to justify a prosecution. The Fifth Circuit has reversed Citgo Petroleum’s conviction for violations of two federal laws. Breathing Easier Under the Clean Air Act The EPA regulates oil refinery waste water treatment systems under… Continue Reading

You Own the Oil. Do You Own the Rock?

Posted in Land Titles, operations

Riddle: What’s the difference between a hydrocarbon molecule and the underground structure which the molecule inhabits? Answer: In Texas, you can own one and not the other, according to Lightning Oil Co. v. Anadarko E&P Onshore LLC. Dueling Estates This was a subsurface trespass case between lessees on two adjacent mineral estates. The Cutlass lease, owned by Lightning, is a severed… Continue Reading

Compressor Station Negligent Nuisance Verdict Reversed

Posted in Construction, Litigation

Therapist: “We’re here today in group to bring closure to the traumatic events of Crosstex North Texas Pipeline L.P. v. Gardiner. Each side claims mistreatment by his adversary and by one component or another of the civil justice system. Rancher/property owner Mr. Gardiner, you appear to be the more unhappy party, let’s start with you. Your glorious trial victory… Continue Reading

Who Needs A Master Service Agreement?

Posted in Contract Disputes, Hydraulic Fracturing

You do, whether you are a vendor or an operator. Matador Production Company vs. Weatherford Artificial Lift Systems, Inc. is a treatise on what can go wrong with a frac job: Failure of pumps, worker inexperience, failure of the “delayed release gel breaker”, failure to clean gel hoses, failure to pump enough gel and proppant, loss of materials, profuse apologies, invoices,… Continue Reading

Did the 2015 Texas Legislature Help Oil and Gas?

Posted in Energy Policy, Legislation

Your Texas legislators have done their work and the citizens are safe for the next two years.  The other good news is that industry supporters generally believe the 2015 Legislature was their friend. House Bill 2: Set aside $4,471,800 to the University of Texas at Austin Bureau for Economic Geology and appointed a technical advisory committee to study the… Continue Reading

Fracking, Trigger Warnings, and a Safe Room

Posted in Energy Policy, Hydraulic Fracturing

First, an apology. I have brought shame to my own self and this blog for failing to invoke trigger warnings about activities I will mention again, after the appropriate trigger warning. (I had no idea there were so many.) Trigger Warning This post will refer to activities in oil and gas production as they are commonly described in the industry…. Continue Reading

Another Lease Termination Case, a Different Ending

Posted in Lease Disputes

Co-author Matthew Wheatley We recently discussed failure to produce in paying quantities. Another decision involving the same lessee had a different result. Why? The question in both cases was whether the well was capable of producing in paying quantities and whether a reasonably prudent operator would continue to operate the well. In the new case ten wells were on… Continue Reading

Royalty Clauses For the Lessor – This Battle is Over

Posted in Lease Disputes, Royalty Disputes

What is your guiding principle when writing agreements? “The more the words the less the meaning, and how does that profit anyone?” Ecclesiastes 6:11. or “The beginning of wisdom is the definition of terms.” Socrates The Legal Issue A lease grants “a perpetual, cost-free (except only its portion of production taxes) overriding royalty of five percent …… Continue Reading

How an Expert Can Affect Your Oil and Gas Claim

Posted in Litigation

Co-author Matthew Wheatley Your well consultant just cemented 10,000 feet of tubing inside the casing of your eight million dollar well, … a neighboring operator frac’ed his Eagle Ford well into your Austin Chalk completion, thereby trespassing and contaminating your well. Righteousness and vengeance are yours. The jury will draw and quarter the offender. Not So Fast Texokan Operating,… Continue Reading

Is Your Well Producing in Paying Quantities? – The Jury Will Decide

Posted in Lease Disputes

One consequence of falling oil prices is leases that cease to produce in paying quantities. The producer’s question: How soon must the well return to profitability? The answer in BP American Production Company v. Laddex, Ltd. is, a “reasonable” period, to be determined by the jury and not the judge. The Magic Well The facts aren’t unique: The well on… Continue Reading

Defendants Saved by Louisiana Subsequent Purchaser Rule

Posted in Pollution

Co-author Brooke Sizer Another Louisiana court has ruled that the Subsequent Purchaser Rule applies to damages following a mineral lease. In Bundrick v. Anadarko Petroleum Corp. it is the 3rd Circuit. The Rule: An owner of property had no right or actual interest in recovering from a third party for damage which was inflicted on the property before his purchase, in… Continue Reading