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Contracts – It’s More About the Drafting Than the Suing

By Charles Sartain on July 29, 2015
Posted in Contract Disputes
compressorCo-author Brooke Sizer

It’s been said that your most important decisions are made when you write your contract, not when you have to sue on it. Kachina Pipeline Company v. Lillis agrees.

In a gas-purchase agreement, can the pipeline operator (Kachina) deduct costs of compression from its payments to the producer (Lillis).

“No”, said the…

Court Arrives at Fair Market Value of Gas Property

By Charles Sartain on June 16, 2015
Posted in Contract Disputes, Litigation
FMVCo-Author Matthew Wheatley

In Texas, lost profits can’t be recovered as damages unless proven to a “reasonable certainty”.

Question 1: What does that mean?

Question 2: Does it matter if the deal is in Bulgaria?

Let’s get rid of the second one first. Bulgaria or no Bulgaria, it doesn’t matter as long as Texas law…

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

By Charles Sartain on May 21, 2015
Posted in Contract Disputes, Litigation

chasing moneyCo-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…

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

By Charles Sartain on February 3, 2015
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…

The Fat Lady Who Hasn’t Sung, Oil Field Technology, and a Lizard

By Charles Sartain on November 26, 2014
Posted in Contract Disputes, Regulations

Today is a grab-bag of topics, a pastiche if your college tuition was higher than mine.

When Will the Fat Lady Sing?

El Paso Marketing, LP v. Wolf Hollow I, L.P., involving a gas plant Supply Agreement, continues its tortured journey through the Texas civil justice system. Chance Decker and I reported on this…

More Seismic Rumbling in Louisiana

By Charles Sartain on November 19, 2014
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…

Subcontractors Score a Victory in Federal Court

By Charles Sartain on September 3, 2014
Posted in Contract Disputes, Title Issues
Les Miles encouraging the Tigers to read Energy and the Law

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…

Treachery of the Untrustworthy Trustee

By Charles Sartain on August 5, 2014
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…

The Non-Binding Agreement – Louisiana Edition

By Charles Sartain on July 15, 2014
Posted in Contract Disputes, Lease Disputes

Co-author Brooke Sizer

I say, “Let’s go down to the crab shack for some seafood”.  You say, “I agree, we’ll go to a steakhouse for a big, juicy slab of cow”.  Am I obligated to join you to split a 32 ounce Porterhouse with three sides and a Cabernet with a 94 rating?

No.  In…

Operator Wins JOA Fight

By Charles Sartain on June 17, 2014
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…

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About Charles Sartain

I have been helping clients of all types resolve their commercial disputes for most of my 35 years as a lawyer. Of the many industries in which I have worked, the energy business is the most fascinating…More

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