Co-author Rusty Tucker

Devon Energy Prod. Co., et al. v. Sheppard, et al is your kind of case if you are in search of:

  • A roadmap for slicing and dicing royalty calculations in myriad ways,
  • Pretty good summaries of the Supreme Court’s notable decisions in Heritage Resources v. NationsBank, Judice v. Mewborne Oil, Chesapeake Exploration v. Hyder and Burlington Resources v. Texas Crude. (pp 12-19)
  • A description of the gas fractionation process.
  • For you scriveners: Reference to the Supreme Court’s lament for “the considerable time, money and heartache” expended due to the use of “industry jargon, outdated legalese, or tenuous assumptions about how judges will interpret industry jargon or outdated legalese”.

Continue Reading When is a “Gross Proceeds” Royalty not Paid on Gross Proceeds?

Co-authors Marcus Fettinger and Chance Decker

Being from the government and here to help you, the Occupational Safety and Health Administration has issued guidance for oil and gas industry workers and employers in light of the increased risk of workplace exposure to COVID-19. The guidance provides three categories of workplace safety measures for employers to follow:

  • engineering controls;
  • administrative controls; and
  • safe workplace practices.

What is “guidance”? Consider it a suggestion with implications.

Gray Reed partners Chance Decker and Marcus Fettinger explain what oil and gas employers need to know to avoid potential liabilities from OSHA complaints or lawsuits by employees.

And a musical interlude

Co-author Rusty Tucker

In a suit to foreclose a property tax lien, if the taxing authority does not exercise due diligence to support service of citation by a method other than by personal service can the owners, as a matter of due process, raise that defect for the first time after expiration of the statute of limitations? Heidelberg v. DOH Oil Company says “no”.

Continue Reading Challenge to a Tax Sale Comes Too Late

Co-author Rusty Tucker

In Evans Resources, L.P., et al. v. Diamondback E&P, LLC, two agreements left the terms “constructed” and “utilized” undefined. If the terms had been defined would the outcome have been different? Maybe. Should parties define every term in an agreement? No, if they are content to rely on the ordinary meaning of the words.

The agreements

Continue Reading “Construction” of a Well Pad Requires More than a Survey

Last week’s discussion of the Pennsylvania Grand Jury’s report on alleged failures in enforcement of hydraulic fracturing is worthy of a follow-up. Here, combined into one document, is the Grand Jury’s report, the Department of Environmental Protection’s response (beginning on page 112) and the Department of Health’s response (beginning on page 165).

The Grand Jury recommends

Expand no drill zones, stop the “chemical cover-up”, regulate all pipelines, add up the air pollution sources, transport toxic waste more safely, deliver a real public health response, end the “revolving door”, and use the criminal laws.

The DEP responds

The report is unreliable, legally and factually inaccurate, not informed by applicable law or facts, relies on undocumented assertions, “does the public a disservice”, and the Attorney General failed to give the Grand Jurors accurate information.  This, from a Democratic governor.

The former Secretary defends the department

 A response from Michael Krancer, Secretary of the DEP from 2011 until 2013, says:

Continue Reading The Fracking Fracas, Part 2

Co-author Bill Drabble

Let’s set aside fracking challenges, low prices, and pipeline rejections to discuss the mundane. Should you as an owner of property be concerned about premises liability claims? We’re talking about the office environment and out in the field. What can you do to protect yourself? Gray Reed partner Bill Drabble has the answers.

Here are the highlights:

  • There is no federal legislation to protect a business from premises liability. Nor is there any in Texas. I don’t know about Louisiana, Oklahoma, Pennsylvania, North Dakota or other producing states.
  • The duty of a property owner is to use “ordinary care” to reduce or eliminate unreasonable risk of harm created by a premises condition about which the owner knew or should have known.
  • Visitors will have difficulty showing that the property owner owes a duty to eliminate Covid-19 lingering on surfaces.
  • A challenge for a complaining party is that the risk of contracting Covid-19 is open and obvious to everyone. The company is not an insurer of others’ safety.
  • Proving causation would be difficult.
  • An aggrieved party’s monetary recovery may be reduced by demonstrating that he bore some portion of the responsibility for catching Covid-19.
  • Bill has six suggestions for what a premises owner should do to protect itself.

Energy and the Law likes the drum beat. Here, to celebrate the art form, you have:

the Reggae beat, with help from the bass player,

the second line, and

John Bonham, who needed no help.

There is “new news” and there is the same-old-same-old. Today is mostly the latter but it seems more “out there” than in it used to be.

The Pennsylvania Attorney General convened a grand jury that slammed regulatory failures in Pennsylvania gas drilling and recommended setbacks that would effectively destroy the ability to develop shale resources.  I don’t know how they do it in Harrisburg but where I come from the prosecutor can get pretty much whatever result he wants by deciding what the grand jury hears and sees and what it doesn’t. Is there a discernable prosecutorial purpose?

The report is challenged as legally irrelevant and erroneous by the industry, regulators, and the state’s Democratic governor.

The 2020 Joe Biden signals his willingness to use what has been described by environmentalists as the president’s “unfettered discretion” to regulate new pipelines and LNG export facilities to death. To be fair, the substance of the article is more benign than the headline.  It’s been said that Mr. Biden has generally taken positions in the mainstream of Democratic politics. As the party moves leftward, you can expect him to follow.

Democrats in the U S House plan for the “climate crisis”. The 547-page legislative proposal calls for 100 percent clean energy by 2040 and mandates US automobile makers to sell only zero-emission cars by 2035. It will cost trillions.

Under the cover of COVID the government should just expropriate the industry. In a slow-pitch softball interview with Truthout, one Michael Pollin combines utopian fantasies with moral condemnation of an industry that has made the world a better place, to create:

  • “ … a clear path for giving [the oil and gas industry] more than what they actually deserve, …
  • a well-thought-out plan for relatively painless death over the next 20 years or so.”
  • nationalizing the US oil and gas industry for $350-$400 billion.
  • public/private ownership of the “energy  system”, including “community and cooperative private ownership” to develop smaller scale ownership with a …
  • transformation to a system that relies primarily on solar and wind power “with all economic sectors operating at high efficiency.” … maybe like the $1.4 Billion of CARES money flowing to dead people.
  • … “retraining and relocation support as needed for a ‘just’ transition” with …
  • “large-scale investments in heavily impacted communities.”

Is it bloated, all-powerful government or the lamentable Road to Serfdom?

Daniel Markind follows his recent Forbes report on rejection of pipeline permits by two northeastern states with a more recent report showing the folly of both “environmental extremists and fossil fuel apologists” because of the massive Russian fuel spill.

We still love the USA on this 4th of July, don’t we?

 

In combined cases featuring California cities of San Francisco, Oakland and San Mateo and several California counties and public officials against Exxon Mobil Corporation, Texas’ Fort Worth Court of Appeal denied Exxon Mobil’s request for pre-suit discovery to evaluate potential claims for constitutional violations, abuse of process, and civil conspiracy.

No personal jurisdiction

Exxon Mobil alleged that California state court climate-change lawsuits are designed to suppress Exxon’s Texas-based speech and associational activities. The cities, counties, officials and their trial counsel filed special appearances challenging Texas’s personal jurisdiction over them. The special appearances were denied by the trial court. The appellate court determined that the potential defendants lacked the requisite minimum contacts with Texas to be subject to personal jurisdiction and reversed the trial court’s order allowing Exxon Mobil to conduct Rule 202 depositions.

In the first 47 of its 49 page opinion the court analyzes the law of special appearances, but first, as background, summarizes the climate litigation goals and strategies of Massachusetts lawyer Matthew Pawa and the gaggle of climate alarmists you’ve heard from before: billionaire Tom Steyer, the Rockefeller Family Fund, the “Green 20” Attorneys General, and the Union of Concerned Scientists. That discussion is worth a read.

The Court’s “Final Thoughts”  

In the last several paragraphs, by Justice Elizabeth Kerr, the Court took an unusual detour from the conventional judicial opinion and offered “Some Final Thoughts”

The court criticized “Lawfare” as “an ugly tool by which to seek environmental policy changes the California Parties desire, enlisting the judiciary to do the work that the other two branches of government cannot or will not do to persuade their constituents that anthropogenic climate change (a) has been conclusively proved and (b) must be remedied by crippling the energy industry.”

The court acknowledged that “Being a conservative panel on a conservative intermediate court in a relatively conservative part of Texas is both blessing and curse: blessing because we strive always to remember our oath to follow settled legal principles set out by higher courts and not encroach on the domains of other government branches;  curse, because in this situation, at this time in history, we would very much like to follow our impulse instead.

Their impulse is to ”safeguard an industry that is vital to Texas’s economic well-being, particularly as we are penning this opinion weeks into 2020’s COVID-19 pandemic-driven shutdown of not only Texas but America as a whole.”

Congratulations to the justices for honesty and dedication to the rule of law.

A musical interlude (and an under-rated artist)

Co-author Rusty Tucker

Estate of Trickett was a dispute over heirship of Claralyn Trickett, possibly the wife of Robert Bowerman (who must have forgotten to divorce his previous wife).

The descendents of Claralyn brought a quiet title action and an heirship proceeding against the heirs of Robert, who claimed an interest in his estate by virtue of his marriage to Claralyn. The trial court abated the quiet title suit while the parties fought over Claralyn’s heirship,

The result

The court agreed with the descendents of Robert that the general four year statute of limitations applied and that Claralyn’s heirs’ cause of action began to accrue in 1972 when she died. The claim was barred by limitations because they did not file suit until 2015, 42 years after she died and 38 years too late.

This was not an action to recover real property. If it were, the cause of action would not have been barred by limitations.  The real property issue was not presently before the court. The only requested relief was to have the court declare the identity of Claralyn’s heirs and the respective shares and interest of each in her estate. Continue Reading Limitations Bars an Heirship Proceeding