Latest from Energy & the Law

Welcome to today’s grab-bag of unrelated topics. The climate avengers are clever in the way they demonize the industry. They give zero credit for technological advancement. Truth is, the industry’s use of technology is constantly evolving, resulting in improved performance and, not secondarily, lessened environmental impact from operations. One example: Scientists from The Ohio State University are working on a project to convert fossil fuels and biomass into useful products, including electricity, without emitting carbon dioxide into the atmosphere. The papers were published in…
Co-authors Niloufar Hafizi and Mauri Hinterlong In resolving disputes among the mineral interest family, there is no bright-line rule delineating the duty of the executive right holder. In Texas Outfitters Limited v. Nicholson, the Texas Supreme Court explained why. The Court last addressed executive rights in 2015 in KCM Financial v. Bradshaw, where the executive allegedly colluded with a lessee for lease terms favoring itself at the expense of the non-executive. Texas Outfitters presented…
Speedier than Jesse Owens in the ‘36 Olympics, Democrats railroaded the Colorado legislature passed, by party-line vote, Senate Bill 181, a new law that will have a profound effect on oil and gas operations in that state. It replaces Proposition 112, which was rejected by 57 percent of the voters just five months ago. Among other effects, the new law mandates the Colorado Oil and Gas Conservation Commission to redirect its priorities from oil and gas production to protection of public…
Co-author Ethan Wood In Johnson et al vs. Chesapeake et al, unit operator Chesapeake deducted post-production costs (gathering, compression, treatment, processing, transportation and dehydration) from non-operating, unleased mineral  owners’ share of production proceeds. The UMO’s (so-called by the court) sued. The federal district court concluded that La. R.S. 30:10(A)(3) governs the dispute, and post-production costs could not be recovered from the UMO’s share of production proceeds.…
Co-authors Ethan Wood and Chance Decker Less than a year ago, we discussed the “Unanswered Questions” left in the wake of Devon Energy Prod. Co., LP v. Apache Corp. (which did answer the question, “Who is a ‘Payor’ Under the Texas Natural Resources Code?”). We asked: “But if the non-participating working interest owner is not paying royalties—what is keeping the lease alive? Absent pooling of the leases or a JOA, the non-participating working interest owner…
Co-author Niloufar “Nikki” Hafizi The latest Fifth Circuit opinion in Seeligson v. Devon Energy Production, L.P. is the latest round in a class action that has been developing since 2014. The plaintiffs are royalty owners who leased to defendant DEPCO. They were certified by the trial court as a class based on an alleged breach of DEPCO’s implied duty to market gas. The issue on this appeal: Did the trial court abuse its discretion in certifying…
Co-author Chance Decker  Burlington Resources Oil & Gas Company, LP. v. Texas Crude Energy, LLC et al is another chapter in the back-and-forth over deduction of post-production costs from royalty payments. In “clarifying” (royalty owners might say “retreating from”) Chesapeake Exploration & Production, LLC v. Hyder, the Texas Supreme Court held that a royalty delivered into the pipeline or tanks is akin to a royalty delivered “at the wellhead.” The lessee was entitled to deduct…
Co-author Trevor Lawhorn A lot, if the claim before the court is for fraudulent inducement. Points to remember: Oral promises that contradict contract terms are pretty much worthless. In reviewing a fraudulent inducement claim, a court will assume the “victim” knows facts that would have been discovered by a reasonably prudent person similarly situated. Which means ask questions. A negotiating party is rarely obliged to volunteer information. If you want understandings to be binding, put them…