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Energy & the Law

Charles Sartain

Posts by Charles Sartain

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

Post-Production Deductions Revisited

Posted in Lease Disputes, Royalty Disputes

Apparently unsatisfied with its analysis in Chesapeake Exploration v. Hyder, the Texas Supreme Court revisited its original opinion on an overriding royalty clause. The Hyders remain the winners. In effect, the court replaced its reliance on earlier decisions interpreting royalty clauses with its own analysis (which looks a lot like the original). The Basics Let’s start… Continue Reading

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