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Charles Sartain

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Co-author Paul Yale

What’s good for the goose is not always good for the gander, at least in some places. It appears that the North Dakota Supreme Court has adopted the minority “ Marketable Product Rule” in connection with a 1979 North Dakota state oil and gas lease. We say “it appears” because not so long ago, in its 2009 decision in Bice v. Petro-Hunt, LLC, the Court held that North Dakota was an “at the well” state, like Texas and the majority of other oil producing states. This latest decision is Newfield Exploration Company, et al v. State of North Dakota et al.

The difference between the “Marketable Product Rule” and the “at the well” rule has to do with the deductibility of post-production costs of transporting, compressing, treating and processing from royalty payments. In an “at the well” state such costs are charged proportionately against the royalty owner. In a “Marketable Product” state they are not.
Continue Reading North Dakota: A Different Rule for Post-Production Costs In a State Lease.

Co-author Lydia Webb

Nabors Offshore Corp. v. Whistler Energy II LLC  is the rare bankruptcy case where the outcome was consistent with the realities of operating in the oil patch rather than the artificial constraints of the Bankruptcy Code. The Fifth Circuit balanced the debtor’s interest in minimizing the costs of administering its estate with a counterparty’s economic interest in its property sitting idle in the debtor’s possession. The counterparty was not made to eat the costs for the time its equipment sat unused after rejection of their contract. 
Continue Reading Bankruptcy Ruling Sides With Oil Field Realities

It’s still true, “Whiskey’s for drinkin’, water’s for fightin’.” Gray Reed lawyers Brock Niezgoda and Stephen Cooney spoke to TIPRO’s summer conference on the use, control and ownership of water in oil and gas operations. Here is their PowerPoint.

The takeaways:

Groundwater
Continue Reading Water: The Hot Commodity in the Permian and Elsewhere

Co-author Chance Decker

How long – if ever – has it been since you pondered the difference between a “tenancy in common” and a “joint tenancy”? Same for us, until the wheels came off a family relationship and a lawsuit was filed in Wagenschein v. Ehlinger. This brings to us – and you – the opportunity to review a little Texas property law. Landmen and title examiners, perk up.

Tenancy in common v. joint tenancy
Continue Reading Tenancy in Common and Joint Tenancy Explained

Reacting to Hurricane Barry, get it?
Co-author Chance Decker

In Barrow-Shaver Resources Company v. Carrizo Oil & Gas, Inc the Supreme Court of Texas has held again, here in a consent-to-assign dispute, that a contract means what the words say, even if in negotiations a landman said something he didn’t mean, … or changed his mind later, and even if “industry custom” is to the contrary.
Continue Reading Industry Custom Does Not Supersede Contract Language

Today is a two-fer. The questions: When does the “merger doctrine” not work in Texas, and how do courts treat technological developments created after a contract becomes effective?

In Murphy Land Group LLC v. Atmos Energy Corporation, Atmos constructed and operated pipelines under three easements from the ‘50’s and ‘60’s and the parties had a 2012 Roadway Lease granting Atmos a 40 foot roadway lease, which expired under his own terms in 2015.

The merger doctrine
Continue Reading Smart Pig Technology … and the Texas Merger Doctrine

Co-author Niloufar Hafizi

As mentioned last week, the 86th Legislature amended the Texas Citizens Participation Act, Texas’ Anti-SLAPP law and defendants’ go-to weapon of destruction in a diverse range of cases.

The TCPA was intended to prevent harassing lawsuits by plaintiffs seeking to quell constitutionally protected activity, in particular the exercise of free speech, the right to association, and the right to petition.but has been much-criticized for being overly broad and subject to abuse and misuse. The old TCPA was frequently applied in oil and gas litigation, which is why we are benefiting you with our observations.Continue Reading The TCPA Revisions Are Good for (Not Only) the Oil Business

Just because anthropogenic climate change is a legitimate concern doesn’t mean that the most radical pronouncements from the idealogues aren’t fair game for criticism.

Not an idealogue, Bjorn  Lomborg, thinks we should worry about it  … a little bit. That caution has earned him derision as a skeptic or worse, a denier merely because he believes the “threat” is overstated and the proposed cures are needless and far more expensive than the disease.

Now for the vote-trolling presidential aspirants.

How many trillions for the Green Nude Eel?

Uncle Joe Biden opens with an unmuscular $1.7 Trillion and, in honor of his past, is accused of stealing ideas from the GND.  He sweetens the pot by refusing to take money from fossil fuel interests.
Continue Reading What’s the Bidding on the Green New Deal?