Parkman v. W&T Offshore, Inc., et al features two contractors playing hot potato over liability for a company man’s alleged negligence. The takeaway: Write your Master Service Agreement to address your liability concerns, and then pay attention to what really happens on the location, regardless of what the MSA says. (And good luck monitoring that
Co-author Brittany Blakey*
Louisiana practitioners and their clients tend to know this particular point of Louisiana law, but it could surprise out-of-staters (known in their native habitat as “Texans”), so it’s worth a reminder:
Under Louisiana Mineral Code art. 122 and art. 129, a lessee in a mineral lease is not relieved of its statutory duty to perform the lease as a reasonably prudent operator unless the lessor has expressly discharged the lessee in writing. The original lessee, along with all assignees and sublessees, are solidarily liable to the lessor for the whole performance of the obligations imposed by the lease.
Continue Reading Original Louisiana Lessee Can’t Escape Liability
Gloria’s Ranch v. Tauren et al – the Louisiana lenders’ bad dream
Anyone seeking stability in the law governing E&P activities in Louisiana will view the lower court decision as a grave error that must be corrected. Virtually every mortgage provides safeguards to protect collateral and manage lenders’ risk. The court of appeal reasoned that because of those provisions, the lender controlled the ability of the borrower to execute a release of a mineral lease, resulting in solidary liability when the borrower-lessee failed to release its lease.
Continue Reading An Oil and Gas Case to Expect From Louisiana, and Another From Texas
Lenders to Louisiana operators are likely to be reconsidering their business practices in light of Gloria’s Ranch v. Tauren et al.
A rather ordinary lease termination suit resulted in the lender Wells Fargo being solidarily liable with the lessees for $22.8 million in lost leasing opportunities, $242,000 in unpaid royalties, $484,000 in statutory damages, and almost $1 million in attorneys’ fees.
Here’s why:
Continue Reading A New Day for Louisiana Oil and Gas Lenders?