Header graphic for print
Energy & the Law

Charles Sartain

Posts by Charles Sartain

Fueling Freedom: Explaining the Value of Fossil Fuels

Posted in Climate Change, Energy Policy, Environmental Policy

Which of these statements makes sense to you: A. “Never before have the rulers of a society intentionally driven it backwards to scarcer, more expensive, and less efficient energy.” B. “Communism is the optimal system for avoiding dangerous global warming”. C. “This is the first time in the history of mankind that we are setting ourselves… Continue Reading

Control-of-Well Insurance: The Words of the Policy Control

Posted in Litigation, operations

Gemini Insurance Company at al v.  Drilling Risk Management Inc construed control-of-well and redrill/extra-expense provisions in an insurance contract. The question and the rule The question was whether an insurance policy covered post-blowout expenses (see facts below), and whether each blowout constituted a separate “occurrence”? If so, there would be two deductibles. The rule is… Continue Reading

When Can Employee Policies Be Amended?

Posted in Contract Disputes

Co-author Michael Kelsheimer Thinking about changing an employee policy in Texas? Kubala v. Supreme Production Services, Inc. says you can do it (almost) whenever you want. Want to make employees arbitrate their disputes? You can do that too. Kubala’s employer Supreme announced a new policy requiring employees to arbitrate employment disputes, including Fair Labor Standards… Continue Reading

Title Suit Booted for Failure to Join Parties

Posted in Lease Disputes, Litigation, Title Issues

Longoria v. ExxonMobil is like throwing a big party but failing to invite all the right guests. The Longorias – 59 of them – sued producer-defendants over ownership of 9,200 acres in Brooks County, Texas, acquired in the 1800’s. Plaintiffs claimed their ownership was not recognized in subsequent conveyances and judgments and sought an accounting,… Continue Reading

Securities Fraud – a Lesson for Promoters

Posted in Litigation, Regulations

We discussed SEC v. Arcturus et al last week and promised more. Here it is. Did defendants commit securities fraud? It doesn’t matter. Violations of Sections 5 of the Securities Act and 15.A of the Exchange Act are strict liability offenses; the defendant’s state of mind is not a consideration.  Thus, because they sold unregistered securities… Continue Reading

Texas Supreme Court Clarifies Nuisance Law

Posted in Litigation

Gardiner v. Crosstex North Texas Pipeline LLC, has brought clarity to Texas nuisance law. It took the Texas Supreme Court 54 pages; we have it in under 600 words. (We explained the lower court case here.) “Nuisance” now refers, not to a defendant’s conduct or a legal claim or cause of action, but to a type… Continue Reading

Wyoming Federal Court Strikes Down BLM Fracking Rule

Posted in Environmental Policy, Hydraulic Fracturing, Regulations

Co-author Sandra Mazan U.S. District Court Judge Scott Skavdahl in State of Wyoming et al v. U.S. Department if Interior et al. struck down Bureau of Land Management regulations applying to hydraulic fracking on federal and Indian lands. He concluded that the BLM had no authority from Congress to issue such regulations. Background In March… Continue Reading

Texas Comptroller Prevails in Tax Exemption Claim

Posted in operations, Taxation

A fight over the Texas sales tax drew industry-wide attention when the trial judge commented from the bench that he was inclined to exempt purchases of casing, tubing, pumps and related services from Texas state sales tax. His actual ruling denied the relief sought by the taxpayer. In Southwest Royalties v. Hegar, the Texas Supreme Court agreed…. Continue Reading

A Development in Trade-Secret Cases

Posted in Contract Disputes, Litigation

Co-author Skyler Stuckey The big trade-secret case, Southwestern Energy v. Berry-Helfand, reported on these pages here and here, has been worked over by the Texas Supreme Court. Highlights: Lack of certainty in damages does not preclude recovery. A “Flexible and imaginative” approach to damages in trade secret cases has its limits For the limitations clock to begin… Continue Reading

Lessee Escapes Termination

Posted in Contract Disputes, Lease Disputes

Co-author Trevor Lawhorn ∗ Escondido and Justapor. Next up on Tiny Desk Concert? Good guess, but no. They are the parties in Escondido v. Justapor, a Texas case presenting the perils of lease termination clauses and vaguely-drawn contracts. The agreements Justapor as lessor and Escondido as lessee entered into an oil and gas lease in 2008 on the… Continue Reading

Neither a Will Nor a Gift Deed?

Posted in Land Titles, Title Issues

This narrative about a daughter gone bad is for title examiners, landmen and moralists. Business development persons, skip straight to the lesson. The background Elvira owned a home and lived with Johnny. Elvira and Johnny were named managing conservators for her three grandchildren after a daughter died. The grandchildren lived at the house. Elvira and Johnny signed… Continue Reading

Here We Go Again: Fractional Royalty or Fraction of a Royalty?

Posted in Royalty Disputes

“Blood may be thicker than water, but oil is thicker than both.”  J. R. Ewing. This family dispute among Ethel’s descendants arose when Ethel’s will employed double fractions in bequeathing royalty interests to her children. Did the instrument create a fixed fractional royalty or a floating fraction of royalty? Straight to the takeaway Don’t like math? Avoid… Continue Reading

EPA Methane Rules Are Coming

Posted in Environmental Policy, Regulations

“Remember, I can do anything to anybody”, deranged and murderous Roman emperor Caligula to his grandmother (Julia, widow of Tiberius and herself no stranger to things done to other people as and when they pleased). In related news, the White House intends to limit methane pollution from thousands of existing oil and gas wells, pipelines… Continue Reading

The Peril in Joint Bidding for Properties

Posted in Legislation, Regulations

Co-author Dominic Salinas Wondering what was behind the Department of Justice indictment of the late Aubrey McClendon? The charge was conspiring to rig bids for oil and gas properties in Oklahoma. Read the McClendon indictment and engage in the parlor game of guessing who the co-conspirators were. Where does this come from? The Sherman Antitrust… Continue Reading

State Well Permit Prevails Over Local Zoning – Again

Posted in Legislation, Local Ordinances

Co-author Brooke Sizer The state laws of Louisiana regulating oil and gas exploration and production will trump local regulations. See St. Tammany Parish Government v. State of Louisiana, Office of Conservation. (Forgive us for that word that should be avoided in a civil society.)  The conflict St. Tammany is a home-rule charter parish that adopted a… Continue Reading

What Happens to a Bundled Production Payment When a Lease Terminates?

Posted in Land Titles, Royalty Disputes, Title Issues

Must a production payment out of four oil and gas leases be proportionately reduced if two of the leases expire because production ceased? In Apache Deepwater, LLC v. McDaniel Partners, Ltd., the Texas Supreme Court says yes. Absent express language in the assignment to the contrary, this general rule applies:  When an assigned lease terminates,… Continue Reading