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Operating Agreements Breach of Contract Oil & Gas

Gray Reed

Arbitration Result Can Be “Good”, “Bad” or “Ugly”

Gray Reed on

The message in RSM Production Corporation v. Gaz du Cameroun SA: According to the federal Fifth Circuit, an arbitration tribunal’s construction of a contract and the arbitration rules governing the dispute “hold, however...more

Adams & Reese

Redefining Willful Misconduct: Texas Appellate Court Announces a New, Lower Standard

Adams & Reese on

In Apache Corp. v. Castex Offshore, Inc., the Texas Fourteenth District Court of Appeal announced that showing an oil-and-gas operator’s “willful misconduct” under an operating agreement’s exculpatory clause does not require...more

Gray Reed

Louisiana Operator’s Bad Faith Does Not Preclude Recovery

Gray Reed on

Under Louisiana law, does the operator’s bad faith preclude recovery for the non-operator’s breach of a joint operating agreement if the operator caused the non-operator to breach the JOA but did not itself breach?...more

Gray Reed

Contract Operator Not Liable for Breach of a Unit Operating Agreement

Gray Reed on

It’s a tale as old as the oilfield: A non-operator doesn’t pay joint interest billings, operator sues, non-payer claims the expenses were unwarranted and the operator was negligent—no, grossly negligent—for incurring them in...more

Gray Reed

Operator Can’t Recover Drilling Costs For Affiliate’s Expensive Rig

Gray Reed on

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

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