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Energy & the Law

Charles Sartain

Posts by Charles Sartain

A Cost-Free Royalty Clause That Works – Part Two: The Override

Posted in Lease Disputes, Royalty Disputes

Co-author Travis Booher Welcome to part two of the hair-splitting decision in Chesapeake Exploration, L.L.C. v. Hyder. See our prior post about the basic facts. More Facts In addition to their cost-free royalty clause for wells on the leased premises, the Hyders also received an overriding royalty interest on wells drilled from pads located on the leased… Continue Reading

Native Gas and Storage Gas: Who Owns It?

Posted in Eminent Domain

Northern National Gas Company vs. Approximately 9117 Acres in Pratt, Camden and Reno Counties, Kansas shows the relationship between Kansas oil and gas law and the Kansas Underground Storage Act (KSA §55-1201 et seq). The result: Obtaining authority to condemn a subsurface reservoir works no instantaneous change of ownership in storage gas under Kansas law. Ownership rights are determined… Continue Reading

More on the Moral Case for Fossil Fuels and Other Topics

Posted in Climate Change, Environmental Policy

My recent post about Alex Epstein and the moral case for fossil fuels told only part of his story. He also says that the global warming “alarmists” have it all wrong. He refers to “unambiguous” data that CO2 emissions have risen from an atmosphere concentration of .03% to .04%, while over the same period climate-related deaths have… Continue Reading

Federal Court: General Partnership Interest Could Be a Security

Posted in Litigation, Regulations

By: Martin P. Averill Are general partnership agreements for oil and gas exploration considered “securities” governed by federal securities regulations? The U.S. Court of Appeals for the 10th Circuit  thinks they could be. In SEC v. Jeffory D. Shields and Geodynamics, Inc. et al., the court reversed a trial court ruling which dismissed the SEC’s claims… Continue Reading

The Moral Case For Fossil Fuels

Posted in Energy Policy, Environmental Policy

Do bystanders see oil and gas producers as taking a stand for morality?  Alex Epstein of the Center for Industrial Progress says they should.  He approaches the value of fossil fuels in our society differently from most industry defenders. The opponents make a moral case against fossil fuels: They destroy the earth and their use must be… Continue Reading

A Cost-Free Royalty Clause That Works – Part One

Posted in Lease Disputes, Royalty Disputes

Co-author Travis Booher Chesapeake Exploration, L.L.C. v. Hyder is another hair-splitting Texas decision about “cost-free royalties”.  The Facts The Hyder family executed a lease covering 1,037 acres. Chesapeake drilled 22 wells on the leased premises. The Hyders believed their lease provided for a “cost free” royalty; that is, no post-production deductions. Chesapeake deducted post-production costs, and the Hyders sued… Continue Reading

Distributions from a Texas Trust Deemed Separate Property

Posted in Litigation

Co-author Alexandra A. Crawley Conventional wisdom is that a spouse’s earnings from separate property are community property. But it’s not that simple. In Benavides v. Mathis a Texas court denied wife Leticia’s claim to one-half of the income derived from minerals held in a trust in which incapacitated husband Carlos was a beneficiary. Years before Carlos and Leticia began their nuptial… Continue Reading

Reaping What You Sow – City of Dallas Sued by Trinity East Energy

Posted in Contract Disputes, Eminent Domain, Local Ordinances

Suppose I own a large tract of land in the region of the Barnett Shale, the exclusive right to allow (or prevent) drilling on the aforesaid land, and a desparate need for funds. You have $19 million and the desire to exploit the minerals. I take your $19 million, and when you ask for permission to drill I… Continue Reading

Mixed Result in a Louisiana Legacy Pollution Case

Posted in Lease Disputes, Pollution

Co-author Ann Weissmann The Dietz family sued several lessees for injunctive relief and restorative damages arising out of leases on two non-contiguous tracts in Acadia Parish. In Dietz, et al. v. Superior Oil Company, et al  the trial court granted the lessees’ dilatory exceptions of prematurity and improper cumulation and dismissed the plaintiff’s suit without… Continue Reading

For Success Against a Pipeline, Go to the Right Court

Posted in Eminent Domain

The first step in successfully challenging the Keystone Pipeline: Choose a court that has jurisdiction. Mr. Bishop learned that lesson the hard way in Bishop v. TransCanada Keystone Pipeline. Mr. Bishop lived in Nacogdoches County, Texas, when TransCanada attempted to negotiate an easement and pipeline right-of-way. Those negotiations failed and TransCanada brought a condemnation proceeding. Bishop believed TransCanada… Continue Reading

Is There Schizophrenia About Fracking?

Posted in Climate Change, Hydraulic Fracturing

Schizophrenia : A mental disorder characterized by a breakdown of thought processes and by impaired emotional responses. Common symptoms include delusions, such as paranoid beliefs; hallucinations and disorganized thinking. Somebody is crazy, or at least very, very wrong, about the hydraulic fracturing debate. Earthquakes and Fracking In the controversy over “frackquakes”, brave small-town citizens are standing up to the rapacious oil… Continue Reading

Title Troubles in Texas, North Dakota and Montana: Right of Way v. Fee Conveyance

Posted in Land Titles, Title Issues

If you examine titles or read title opinions, this post is for you. By Taylor Grove Lamb  I was recently examining instruments for an East Texas title opinion when I came across an instrument that, at first glance, appeared to be an easement. Scanning the document, I saw the phrases “right of way” and “road”—leading one to believe… Continue Reading

Fear Alone Won’t Get You an Injunction

Posted in Litigation

With apologies for being absent for a week, I ask you to ponder this question when you embark on a fight with the officers and directors of the energy company you own a part of:  How does your subjective fear of harm factor into your right to injunctive relief? Not much, according to a Texas court… Continue Reading

Technology Will Silence the Critics of Drilling

Posted in Climate Change, Hydraulic Fracturing

Technology and innovation will resolve the issues, real and imagined, that confront hydraulic fracturing. I arrive at that opinion because of history: Before 1914, France had three dozen airplanes, more than all other air forces in the world put together. Germany, Britain, Italy, Russia, Japan and Austria all had no more than four planes each… Continue Reading

The Duhig Rule – State by State

Posted in Land Titles, Title Issues

Co-author Tara Trout Flume As promised in our last post, here is a state-by-state review of the Duhig Rule -  who has adpoted it, who hasn’t, and who might. Texas – Duhig v. Peavey Moore Lumber Company, 135 Tex. 503, 144 S.W.2d 878 (1940) was a Texas case.  As a result, producing states have Texas to thank for the Duhig… Continue Reading

Beware, the Stealthy Duhig Rule

Posted in Land Titles, Title Issues

Co-author Tara Trout Flume Johnson v. Finkle, from North Dakota, centers around the long-standing but oft-forgotten headache that is the Duhig doctrine. If you aren’t familiar, you should be. Here it is: The Rule “Where a grantor conveys land in such a manner as to include 100% of the minerals, and then reserves to himself 50%… Continue Reading

Pennsylvania Supreme Court Strikes Down Pro-Industry Law

Posted in Local Ordinances, Regulations

Author: Martin P. Averill In Robinson Township v. Commonwealth of Pennsylvania, the Pennsylvania Supreme Court dealt a major blow to the energy industry. By a 4-2 decision the Court struck down a 2012 law (commonly known as “Act 13”) aimed at preventing municipal interference with oil and gas exploration. Three different approaches Interestingly, the precise rationale for… Continue Reading

Texas Court Declines Indemnity for One’s Own Bad Acts.

Posted in Contract Disputes

We begin with a philosophical question: Should a person be rewarded for bad behavior? Despite twerkee Miley Cyrus (and her daddy), the Kardashians and, at least for a while Richard Nixon, the answer should be, no. Texas law agrees. The express negligence doctrine in indemnification agreements “… mandates that the party use express language within the four corners of the contract specifically… Continue Reading

Dallas City Council Passes Draconian Drilling Ordinance

Posted in Local Ordinances, Regulations

It was a triumph of hysteria over common sense, a thrashing of science at the hand of ignorance, capitulation to a small but loud minority of NIMBY protestors. The City of Dallas has passed one of the strictest drilling ordinances in the country.  The ordinance amounts to a defacto ban on future drilling because of the requirement that no well can be closer than five football fields from… Continue Reading

Oral Transfer of an Immovable is Established in Louisiana

Posted in Litigation

Co-author Brooke Sizer In Louisiana, in order to have a valid oral transfer of immovable property under Civil Code Art. 1839, two requirements must be met: Delivery must be actual—physical possession must be in the transferee who claims title, and Recognition by the transferor under oath. In Harter v. Harter, mineral interests (which are immovables) were… Continue Reading

How an Oil and Gas Scammer Avoided Justice

Posted in Litigation

Co-author Brooke Sizer Scoundrels often get away with their crimes by scamming lots of victims for small amounts, so that no single investor can afford to prosecute his claim. Big Rock Investors Association v. Big Rock Petroleum, Inc. was an unsuccessful effort by investors to clear this hurdle. Big Rock Investors Association (BRIA) was created to prosecute claims by 226 investors of… Continue Reading