In Ankor Energy, LLC et al v. Merit Management Partners I, L.P. et al a Louisiana federal district court addressed a situation commonly encountered by assignors of oil and gas operating interests: You’ve given up the cheese. How do you get out of the JOA trap?
The facts
The Ankor parties sued the Merit parties
It’s often helpful when courts are asked to construe joint operating agreements. Not always, though. Courts sometimes don’t understand or fail to take into account industry custom and practice and the underlying purposes behind the JOA, especially the Model Form. Evans Resources LP v. Petroplex Energy Inc. appears, at first blush, not to be
Last year we reported on Steelhead Midstream Partners, LLC v. CL III Funding Holding Company, LLC, where the Texas Supreme Court held that a pipeline owner’s breach-of-contract claim was not an impermissible collateral attack on a foreclosure judgment. The case went back to the Fort Worth Court of Appeals for a
Texas Crude v. Burlington Resources Oil and Gas considers the relationship between the operator and non-operators under Articles V and VI of the 1982 Model Form Joint Operating Agreement.
Burlington owed 87.5.% of a prospect and was the operator. Texas Crude owned 12.5. Warwick acquired a 10% working interest from Texas Crude. That interest was
In Steelhead Midstream Partners, LLC v. CL III Funding Holding Company, LLC, the Texas Supreme Court authorized a pipeline owner’s breach-of-contract claim—alleging a co-owner used foreclosure to avoid cost-sharing obligations under a joint operating agreement. The claim was not an impermissible collateral attack against a judgment allowing a foreclosure because the
The message in RSM Production Corporation v. Gaz du Cameroun SA: According to the federal Fifth Circuit, an arbitration tribunal’s construction of a contract and the arbitration rules governing the dispute “hold, however good, bad, or ugly.” Translation: Good for one party, bad or ugly for the other, just like the courthouse.
RSM was
Can the Texas lessee perpetuate his oil and gas lease by “constructive participation” in wells drilled by another? Under the facts in Cromwell v. Anadarko E&P Onshore, LLC, the answer is no.
Cromwell and Anadarko’s wells
In 2009 Cromwell obtained the Ferrer and Tantalo leases covering small fractional interests in several sections. Anadarko owned working
One of the questions raised in 1776 Energy Partners, LLC v. Marathon Oil EF, LLC was whether Marathon as operator could apply revenues owed to non-operator 1776 under one joint operating agreement to satisfy unpaid debts owed on another. Unfortunately, we don’t have an answer. (FWIW, this is the same “1776”
In TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico LLC. the Supreme Court of Texas resolved the chaos created by conflicting dispute resolution regimes in three contracts for ownership and operation of an offshore unit and gathering system. The essential question: Did the parties agree that an arbitrator, rather than the courts
Non-operators under the 1989 Model Form JOA have been hoping to drive a stake through the dark heart of Reeder v. Wood County Energy, LLC. Bachtell Enterprises, LLC v. Ankor E&P Holdings Corp might be a start. The question was whether the Article V.A. exculpatory clause exonerated the operator who intentionally