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Energy & the Law

Charles Sartain

Posts by Charles Sartain

Arbitration in Louisiana – Another Budding Romance?

Posted in Contract Disputes, Litigation

Are Louisiana courts as enamored with arbitration as their Texas counterparts? Looks like it. East of the Sabine, submitting your dispute to arbitration means you are pretty much saying adieu, farewell and bye-bye to a judicial mulligan. In ExPert Oil & Gas, LLC v. Mack Energy Co., et al an arbitrator’s mistaken calculation did not nullify an arbitration award. Round one ExPert… Continue Reading

The Rule Against Perpetuities is Alive and Enforceable in Oklahoma

Posted in Contract Disputes, Land Titles

Today we venture into Oklahoma, to be instructed on the Supreme  Court’s treatment of the Rule Against Perpetuities. First, the Rule: No property interest is good unless it must vest, if all, not later than 21 years after some life in being at the creation of the interest. In American Natural Resources LLC v. Eagle Rock Energy Partners LP,… Continue Reading

Operator – Don’t Get Burned by Paying an Insolvent Contractor

Posted in Land Titles, operations, Title Issues

MEMORANDUM From: Legal Department To: Accounts Payable Re: What we learned from Shell Western E&P, Inc. v. Pel-State Bulk Plant, LLC ________________________________________________________________________ Just received notice of a Texas subcontractor’s mineral lien? DO NOT continue to pay the contractor. He hasn’t paid the subcontractor. Think you owe nothing on the well on which the lien will… Continue Reading

What Your New President Will Do For or To You

Posted in Energy Policy, Environmental Policy

We begin with a Rorschach test. As the big election day approaches, which candidate do you see in the photograph? Discuss among yourselves. Get ready for lots of musical interludes. The nation’s despair runs deep and wide, so profound that it cannot be expressed in mere words. What do they promise? Let’s look at what we might expect from… Continue Reading

Texas Courts Continue Their Romance With Arbitration

Posted in Contract Disputes

The lessons in Craddick Partners Ltd. v. EnerSciences Holdings, LLC are three: Parties who have not signed an agreement to arbitrate have standing to compel arbitration; artful pleading to avoid arbitration won’t work; and Texas courts remain eager to send cases to arbitration. EnerSciences’ two subsidiaries sell products in the oil field. Tom Craddick approached EnerSciences to sell products… Continue Reading

Louisiana Statutory Penalties Imposed on Operator

Posted in Legislation, Litigation, Pooling and Unitization

If you’ve ever tried to escape penalties for the operator/producer’s failure to comply with La. R.S §30:103.1 and §103.2, take comfort in XXI Oil & Gas, LLC v. Hilcorp Energy Company.  You are not alone. No excuse has satisfied the courts, and there is none here. The statutes (links above) require information and certain procedures… Continue Reading

Texas Tax Ruling Favors Frac Trailer Owners

Posted in Regulations

Co authors David Leonard and Austin Carlson If you were able to keep your frac trailers from the clutches of your avaricious creditors during the past several unpleasant years, you could be in luck. Owners and lessors of frac trailers may be entitled to a refund for sales tax paid in connection with the purchase,… Continue Reading

Methane Emissions Standards Take Effect

Posted in Climate Change, Environmental Policy, Regulations

Effective this past August 3, the EPA has new regulations for methane and volatile organic compound emissions from oil and gas operations  As you know, reducing methane emissions is a key component of the President‘s climate change agenda. Why should I care? Because if you own or operate an oil and gas production, processing, transmission or… Continue Reading

Back to the Bulgarian Bad Guy, So Say the Justices

Posted in Contract Disputes, Purchase and Sale Agreements

My blogging sensei Cordell Parvin says the title should always inform the reader of the content. Mea culpa on this one; I couldn’t resist the alliterations. Some time back I reported on Carlton Energy Group et al v. Phillips et al.  See that entry for the facts and a Texas Supreme Court opinion. In this new opinion from the… Continue Reading

Assigning By “Stratigraphic Equivalent”? Be Careful

Posted in Contract Disputes, Land Titles, Purchase and Sale Agreements

Co-author Brooke Sizer How many of your mineral conveyances are described like this: … all of Sellers’ right, title and interest in and to (a) the oil, gas and other minerals in, to and under the lands … ONLY INSOFAR as such oil, gas and other minerals are located below that depth which is the stratigraphic equivalent… Continue Reading

Louisiana Partition Agreement: You Can’t Trade What You Don’t Own

Posted in Land Titles, Title Issues

Square Mile Energy LLC v. Pommier considered this language in a Louisiana partition agreement: “N.B: Included in this transfer are any and all mineral rights, when available, to Roxanne and all surface rights.” Did this language include an interest in a mineral servitude inherited by Paul as co-owner with his siblings? To answer the question, a few… Continue Reading

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