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Energy & the Law

Category Archives: Contract Disputes

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Oil and Gas Arbitration – Did the Parties Get What They Bargained For?

Posted in Contract Disputes, Litigation

First, a promise: I won’t report on another arbitration case until there is more to say than “business as usual”. Second, an opinion: Arbitration is still the right forum in many situations. Third, remember: An award and a result, not litigation, was what Venoco says it bargained for. That said, knowing only that Denbury Onshore v. Texcal Energy South Texas is… Continue Reading

Oil Industry Custom and the Model Form JOA: A Debate

Posted in Contract Disputes, Operating Agreements, operations

We begin with an existential question: “The philosophy behind all of the model form agreements is that aggressive drilling under the JOA should be promoted and rewarded. Agree or disagree? That was an issue in Talisman Energy v. Matrix Petroleum.  It was not resolved, but the decision is worth your attention because the court enjoined… Continue Reading

Have You Reviewed Your Lease Maintenance Processes Lately?

Posted in Contract Disputes, Litigation

You might conclude that the but-for-the-grace-of-God-that-could-be-me nightmare presented in In re: RPH Capital Partners is instructive only for lawyers. If so, you would be mistaken. The lesson: If you want to win the lawsuit, pay attention to pesky legalities such as notices of trial settings. Likewise, if you want to protect your hydrocarbons, reinforce your people and processes for… Continue Reading

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

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

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