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
Co-author Rusty TuckerWith the plunge in commodity prices many formerly profitable wells are now in the red, and we don’t know for how long. This is causing non-operators to question the bona fides of the operations … and of the operator, and to search for a way out of their obligations.
The challenge: The operator is operating unprofitable wells where monthly costs exceed or barely equal revenues, making money on fixed COPAS overhead charges, and non-operators are going into the economic hole. What can the non–operator do to stop the financial bleeding?
Continue Reading My Operator is Making Money on the Well and I’m Not. What Can I Do? Part 1.