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Energy & the Law

Category Archives: Contract Disputes

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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

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

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

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

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

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

How to Manage Credit and Collect Unpaid Bills in Today’s Oil Patch

Posted in Contract Disputes, Litigation

Co-authors Preston Kamin and Joe Virene Everybody from the well site to the board room has an opinion about when oil prices will “rebound”. Rather than an opinion, we have a question:  How do I collect my money while we’re waiting? This post is a refresher for service companies and suppliers looking for money from operators, and for operators looking to non-operators.  There are many steps… Continue Reading

Operator Can’t Recover Drilling Costs For Affiliate’s Expensive Rig

Posted in Contract Disputes, Operating Agreements

Co-author Alexandra Crawley In Elm Ridge Exploration Co., LLC v. Engle we are reminded of a little-used provision in the 1989 Model Form Operating Agreement. Article VI.D.1 allows the operator to use its own equipment, but his charges may not exceed prevailing rates in the area, and the rates must be agreed to in writing before… Continue Reading

More Seismic Rumbling in Louisiana

Posted in Contract Disputes

Co-author Brooke Sizer In Olympia Minerals et al v. HS Resources, et al, the Louisiana Supreme Court addressed a decision we discussed in a February entry by affirming in part, reversing in part, amending in part and remanding (because why do one thing when you can do four). The case involved the “North Starks Project Agreement” covering 42,000… Continue Reading

Subcontractors Score a Victory in Federal Court

Posted in Contract Disputes, Title Issues

By: Martin P. Averill On August 27, in In re Heritage Consolidated, L.L.C., the Fifth Circuit Court of Appeals granted subcontractor’s lien rights to two oil and gas drilling contractors. The Court reversed a district court ruling which upheld a summary judgment issued by a bankruptcy court denying liens to the two drilling contractors. The case was briefed and argued by Gray… Continue Reading

Treachery of the Untrustworthy Trustee

Posted in Contract Disputes, Title Issues

Co-author Brooke Sizer J-W Operating Co. v. Olsen is another Louisiana concursus (“It’s not my money, Your Honor; let them fight over it”). The Trust In 2006, Fred Houston created the Fred L. Houston Trust and placed into it the Tenneco lease, which had been producing since 1974. Ms. Williams was the trustee. The trust instrument declared… Continue Reading

Operator Wins JOA Fight

Posted in Contract Disputes, Operating Agreements

MDU Barnett Ltd. P’ship v. Chesapeake Exploration Ltd. P’ship is at least three things: The culmination of an unhappy relationship between an operator and non-operators. What happens when joint owners’ interests are not aligned. Predictable, given Texas law and the relationship of parties under the model form JOA. In 2005 Chesapeake and Conglomerate Gas entered into an Exploration and Development Agreement involving Barnett Shale properties…. Continue Reading

Condition Precedent Sinks Chesapeake

Posted in Contract Disputes

A condition precedent was the issue in Preston Exploration Company, et al v. Chesapeake Energy Corporation. This opinion was the result of the parties’ second visit to the federal Fifth Circuit Court of Appeals. In the first trip, the issue was whether the Purchase and Sale Agreement between the parties in a $110 million transaction satisfied the statute of… Continue Reading