Like breaking into CIA headquarters, sneaking into the Vatican, or hanging off the side of the Burj Khalifa, sometimes getting the deal done seems impossible. The key to any successful mission is planning for disastrous contingencies—be they rats in an air duct, malfunctioning suction gloves, or having to reach out to a third party to finance the bid you just won. Your mission—should you choose to accept it—is to learn how to avoid the fallout of an oil and gas acquisition gone bad by studying Pacific Energy & Mining Co. v. Fidelity Exp. & Prod. Co.
Continue Reading Attempt to Prove a Texas Partnership Fails
Operating Agreements
Oil Industry Custom and the Model Form JOA: A Debate
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…
The Model Form JOA in Hard Times (and Farewell, Rally Possum)
Co-author Nathan Cox *
Good morning class. Welcome to an advanced course on what can go wrong with the Model Form just when you need it.
FIRST CASE
Do you know where to file your UCC financing statement?
Operator wants to perfect…
Operator Can’t Recover Drilling Costs For Affiliate’s Expensive Rig
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…
Perils of “Other Provisions” in the Model Form JOA
Scriveners, when you add those “Other Provisions” in Article XVI of your model from JOA’s, are you sure that the document remains internally consistent, that no “Other Provision” conflicts with the form?
… Are you mindful of which of two related contracts will govern if there is a conflict in provisions? Did you choose the…
Operator Wins JOA Fight
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…
Non-Operators Shake Off the JOA Tar Baby
Co-author Andrew Neal
Non-operators have had a lot in common with Br’er Rabbit ever since 2006, when the Texas Supreme Court surprised the industry in Seagull Energy E & P, Inc. v. Eland Energy, Inc. Their tar baby is the ruling that, absent a release from the operator a working interest under a JOA who…
Unrecorded Override Assignment Trumps the Public Records Doctrine
Lawyers and landmen are taught that a document affecting real or immovable property not recorded in the public records means nothing to a stranger. Like O. J.’s quest for the real killer, lower premiums after the Patient Protection and Affordable Care Act, and the present I would have given my wife except I forgot our…
Yes, Virginia,There is an MUI Claus(e)
By Travis Booher
History tells us that the young friends of Virginia O’Hanlon broke the news to her that there was no Santa Claus. When she quizzed her father about Santa’s existence, Dad’s fatherly advice was to ask the local newspaper. “If you see it in The Sun, it’s so.” You know the rest of…
Operator Not Liable for Breach of JOA – Louisiana Version (Kind of)
It’s deju vu all over again in Chesapeake Operating, Inc. v. Sanchez Oil & Gas Corp. More accurately, it is a variation of Reeder v. Wood County Energy, LLC, et al. applied to Louisiana operations. For the impact of the exculpatory clause protecting the operator from liability in the 1989 Model Form JOA, see …