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Energy & the Law

Charles Sartain

Posts by Charles Sartain

108 Year-Old Lease Survives

Posted in Lease Disputes

Co-author Brooke Sizer A baseball question: You’ve got men on late in the game; a base hit to the right side wins. Do you put the bat on the ball for a single or swing for the deep seats, risking the game-ending strikeout? The Stiles leases were executed in 1907, when Honus Wagner was in… Continue Reading

Operator: Be Careful Handling Ad Valorem Taxes

Posted in Taxation

This is to be expected in these dark days of diminished cash flow. Imagine:  You are the operator and the non-ops have given you their share of ad valorem taxes, expecting you to pay them to the taxing authority at the right time. Things are a little tight, if you know what I mean, so you divert “borrow” the funds… Continue Reading

Texas Property Code Change – No More Subordinations?

Posted in Land Titles, Lease Disputes, Title Issues

Special thanks to Gray Reed colleagues Paul Yale and Dominic Salinas for this post. Weary of having to solicit those pesky subordinations of pre-existing mortgages to your recently-acquired oil and gas leases? Tired of chasing down the third assistant to the fourth vice president for loan servicing just to obtain one simple document? The 2015… Continue Reading

A Corporate Opportunity? … Stolen?

Posted in Litigation

Co-author Alexandria Moore If you want to get to the meaning of a case, one exercise is to put yourself in the shoes of one participant or the other and see how you react to the events. (This also works well with Bible stories, by the way.) Last week we discussed Huff Energy fund LP v. Longview Energy… Continue Reading

What is a Corporate Opportunity?

Posted in Litigation

Co-author Alexandria Moore Let’s say two fellows are in the oil business and one of his activities is as a director of an exploration company. A deal comes in, they present it to the company, but take it for themselves, Did they steal the opportunity from the company? In Huff  Energy Fund LP v. Longview… Continue Reading

Les Miles is Like the Oil Business

Posted in Contract Disputes

How is that, you say? Recruits well Sometimes can’t get to TD Occasional blowouts Lingo often not understood by others Eats/uses no more turf than necessary Surely benefits from “white privilege” Down but not out. More on the Les mess: Next time you encounter incompetence in action, just say, “They must work for Joe Alleva”…. Continue Reading

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