Here is what we believe is an unusual situation: A gas unit is formed. The gas well ceases to produce. Another gas well produces from an oil unit, but the lease at issue is not included in the oil unit. Is the lease...more
Trigger warning for Texas readers: This entry will discuss forced pooling. You may now retreat to your “safe space”, where “no guvment-sumbitch-bureaucrat can conspire with [name of large oil company] to steal my stripper...more
We know that in Texas the mineral owner has the right to explore for and produce the minerals. What does that leave for the surface owner? In Lightning Oil Company v. Anadarko E&P Onshore, LLC the Texas Supreme Court tells us...more
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?
...more
Today we venture into Oklahoma, to be instructed on the Supreme Court’s treatment of the Rule Against Perpetuities. First, the Rule: No property interest is good unless it must vest, if all, not later than 21 years after...more
If you’ve ever tried to escape penalties for the operator/producer’s failure to comply with La. R.S §30:103.1 and §103.2, take comfort in XXI Oil & Gas, LLC v. Hilcorp Energy Company. You are not alone. No excuse has...more
How many of your mineral conveyances are described like this:
… all of Sellers’ right, title and interest in and to (a) the oil, gas and other minerals in, to and under the lands … ONLY INSOFAR as such oil, gas and other...more
Gemini Insurance Company at al v. Drilling Risk Management Inc construed control-of-well and redrill/extra-expense provisions in an insurance contract.
The question and the rule -
The question was whether an...more
Parvizian controlled Arcturus and Aschere, buying and selling interests in drilling projects. Each project had a managing venturor which supervised the project. Each venture included a confidential information memorandum,...more
The big trade-secret case, Southwestern Energy v. Berry-Helfand, has been worked over by the Texas Supreme Court. Highlights:
- Lack of certainty in damages does not preclude recovery.
- A “Flexible and...more
Must a production payment out of four oil and gas leases be proportionately reduced if two of the leases expire because production ceased? In Apache Deepwater, LLC v. McDaniel Partners, Ltd., the Texas Supreme Court says yes....more
Riddle: What’s the difference between a hydrocarbon molecule and the underground structure which the molecule inhabits?
Answer: In Texas, you can own one and not the other, according to Lightning Oil Co. v. Anadarko E&P...more
9/3/2015
/ Hydrocarbons ,
Leases ,
Mineral Leases ,
Mineral Rights ,
Minerals ,
Oil & Gas ,
Subsurface Estates ,
Surface Estates ,
Tortious Interference ,
Trespass ,
Well Drilling
In Texas, lost profits can’t be recovered as damages unless proven to a “reasonable certainty”.
Question 1: What does that mean?
Question 2: Does it matter if the deal is in Bulgaria?
Let’s get rid of the...more
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...more
Would this scenario keep you up at night? Your lease does not produce from May through August because a leak in a heater-treater makes it impossible or impractical to produce the well. Problems such as access to the site...more
Cresson SWD Services, L.P. vs. Basic Energy Services, L.P. is a warning about the perils of an oral agreement for a risky downhole procedure. Cresson hired Basic to make improvements on a saltwater disposal well by deepening...more
My mother used to give us good advice. For example: Don’t lie … do your homework. Sabella v. Appalachian Development Corporation agrees with my mother.
Sabella bought minerals in 1997 under 66 acres in Warren...more
It looks like what you’d expect: a bunch of litigants spending lots of time at a courthouse in Goliad, Texas, with no end in sight. After much ”sprawl” in Harkins v. Northshore Energy it came down to the meaning of this...more
On August 27, in In re Heritage Consolidated, L.L.C., the Fifth Circuit Court of Appeals granted subcontractor’s lien rights to two oil and gas drilling contractors. The Court reversed a district court ruling which upheld a...more