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Energy & the Law

Charles Sartain

Posts by Charles Sartain

Can the Tax Man Come After Your Stored Gas?

Posted in Taxation

Co-author Matthew Wheatley The owner of 33 BCF of gas cant’ just stuff it in his pocket and move it county-to-county to avoid taxes. So, the question: Is gas in storage subject to ad valorem tax on personal property?  The Harris County Appraisal District thought so. The taxman prevailed in ETC Marketing v. Harris County Appraisal District. The gas was stored in a depleted… Continue Reading

How to Manage Credit and Collect Unpaid Bills in Today’s Oil Patch

Posted in Contract Disputes, Litigation

Co-authors Preston Kamin and Joe Virene Everybody from the well site to the board room has an opinion about when oil prices will “rebound”. Rather than an opinion, we have a question:  How do I collect my money while we’re waiting? This post is a refresher for service companies and suppliers looking for money from operators, and for operators looking to non-operators.  There are many steps… Continue Reading

Lipsky Revisited – Details and Debate

Posted in Hydraulic Fracturing, Litigation, Pollution

I often wonder if anybody actually reads our modest, quasi-weekly offerings. They do! And they respond! To criticize!  I earn my keep being “critiqued” by impatient judges, aggressive opposing counsel and, occasionally, less-than-happy clients, so – challenge accepted. “Critique” One: Lipsky was not Range’s lessor, therefor I know nothing about the case. Surely, this person lives in my house, where I enjoy a… Continue Reading

How Are the Texas Anti-SLAPP Statute and Jade Helm 15 Alike?

Posted in Hydraulic Fracturing, Litigation, Pollution

May a court “draw rational inferences from circumstantial evidence” when determining if a plaintiff  has met its burden in a suit in which the defendant has invoked the Texas Citizens Participation Act . That was the question in In re Lipsky. What is The Anti-SLAPP Statute? The purpose of the TCPA (the “Anti-SLAPP” statute) is to protect citizens from… Continue Reading

Your Texas Legislature at Work, Part 2

Posted in Legislation

The Texas legislature is still busy on energy issues. Is that good or bad? It depends on your situation; oil patch thieves won’t like it. Wind Energy Senate Bill 931 would blow away the Renewable Portfolio Standard, established in 1999 to set renewable energy goals for Texas. The bill would also halt construction of transmission lines in Competitive Renewable… Continue Reading

The Danger of “Too Much Information”?

Posted in Land Titles, Title Issues

I know contract writers who like to state terms, such as property descriptions, several different ways. If you just have to over-describe, at least be careful, and at least be sure the descriptions are consistent. The McGregors and Millican were adjacent landowners fighting over a 34.28 acre wooded tract in Brazos County, Texas. The question:  Was the acreage in Millican’s chain of title. The answer: “No”. A 1945 deed… Continue Reading

Obama Approves Keystone Pipeline and Other News- Special Edition

Posted in Energy Policy

It was an abrupt and remarkable about-face. In a Rose Garden ceremony in the presence of the CEOs of America’s largest oil companies and special guest David Koch (brother Charles remained ball-gagged and handcuffed by the editorial board of The Nation), President Obama signed an executive order fast-tracking construction of the Keystone XL Pipeline and, to the… Continue Reading

A Lesson in Lease Administration

Posted in Lease Disputes, Royalty Disputes

Co-Author Brooke Sizer What must a Louisiana lessee do to avoid statutory penalties for non-payment of royalty, and what must a royalty owner do to put the lessee on notice that royalties are not being paid? The answers are, more than the lessee did in Samson Contour Energy E&P, LLC v. Smith and less than the lessee argued for. What the Lessee Did… Continue Reading

Must the Lessee Be Wary of the Executive Right Owner?

Posted in Lease Disputes, Royalty Disputes

You are negotiating to take a big oil and gas lease. The run sheets show you are dealing with an executive right owner on behalf of himself and his NPRI owner.  His proposed terms are odd: a lower-than-market royalty and a higher-than-market bonus. After reflecting, you get it: The terms aren’t odd; they are just better for him than the… Continue Reading

Denbury Part II: Big Changes Coming in Texas Pipeline Condemnations ?

Posted in Construction, Eminent Domain

Co-Author Martin P. Averill Is Denbury’s Green Pipeline a common carrier? That question is alive and well in Texas. In Texas Rice Land Partners Ltd. v. Denbury Green-Texas Pipeline, LLC,  the Beaumont court of appeals reversed a summary judgment granted by the trial court to Denbury, applying the Texas Supreme Court’s “reasonable probability” of public use standard… Continue Reading

Texas Supreme Court Relaxes Its Grip on the Discovery Rule

Posted in Lease Disputes

Co-author Sandra L. Mazan The Texas Supreme Court – that elephants’ graveyard of claims and causes of action – has sided with a lessor-plaintiff who relied on the discovery rule to defeat a limitations defense.  For the many with low expectations when the court agreed to review this case, this result is a welcomed surprise. We discussed Hooks, et… Continue Reading

A Scourge Worse than Fracking!

Posted in Hydraulic Fracturing

Allen Gilmer of DrillingInfo.com warns us about a threat to the nation’s health and safety that makes hydraulic fracturing look like a kindergarten cupcake party (if there were still such a thing).  What’s worse is this scourge is not limited to communities where there is oil and gas production. The young seem to be most afflicted. See the link to Allen’s blog post: http://info.drillinginfo.com/whats-more-dangerous-puppies-or-fracking/ As long… Continue Reading

Operator Can’t Recover Drilling Costs For Affiliate’s Expensive Rig

Posted in Contract Disputes, Operating Agreements

Co-author Alexandra Crawley In Elm Ridge Exploration Co., LLC v. Engle we are reminded of a little-used provision in the 1989 Model Form Operating Agreement. Article VI.D.1 allows the operator to use its own equipment, but his charges may not exceed prevailing rates in the area, and the rates must be agreed to in writing before… Continue Reading

Meanwhile in Texas … Who Should Decide About Fracking?

Posted in Energy Policy, Hydraulic Fracturing

Who should decide when, where, how, and even if, hydraulic fracturing should occur? The locals: “You hypocrites Our good public servants in Austin want ‘local control’ when its against Washington, but deny us the same right.  We know better than you about what’s best for our community. To hell with catastrophic litigation exposure and declining tax revenues. If you didn’t get a regular royalty check and had to… Continue Reading

Consider The Retained Acreage Clause

Posted in Lease Disputes, Pooling

Have you ever wondered about the original purpose of the retained acreage clause? According to Professor Kramer, it was “to prevent the lessee from losing those portions of a lease that had productive wells thereon if the rest of the lease terminated”. The term has been expanded “to include clauses that require the release of all… Continue Reading

5th Circuit Blocks Punitive Damages in Maritime Case

Posted in Litigation

Co-author Shannon Thorne In McBride v. Estis Well Service, LLC, the federal 5th Circuit Court of Appeals determined that punitive damages are not available to seamen under the Jones Act or under general maritime law. In those cases, recovery is limited to pecuniary losses. The Drill Barge Accident Estis Well Service owned and operated Estis Rig… Continue Reading

Frackers v. Anti’s – Scoring update

Posted in Energy Policy, Environmental Policy, Hydraulic Fracturing

The box scores after election day showed frackers 4, anti’s 4. Courtesy of a gubernatorial grand-slam by Gov. Andrew Cuomo, hydraulic fracturing is now banned throughout the entire state of New York. In this ballgame within a ballgame, it’s Yoko and Shawn, the likes of Moveon.org , and wealthy Manhattanites: 1 Mineral owners, asthmatics, underemployed up-staters, and cash-starved municipalities: 0 Producers… Continue Reading

A Little-Used Doctrine Saves a Lease

Posted in Lease Disputes

Would this scenario keep you up at night? Your lease does not produce from May through August because a leak in a heater-treater makes it impossible or impractical to produce the well. Problems such as access to the site during rainy weather make repairs difficult. You are beyond the primary term. The top- lessee lurks. The Lease “If at the expiration of the primary term… Continue Reading

Listen to the Words In the Injunction Battle

Posted in Litigation, operations

If it’s an injunction you want, some words are your friend and others aren’t. For example: “Imminent” = friend “Might” = not friend “Likely” = friend “Could” = not friend “Irreparable” = friend “Money damages” = not friend In Lightning Oil Company v. Anadarko E&P Offshore, LLC, the surface and 1/6 of the minerals of the… Continue Reading