A Key Resource For Structuring Oil & Gas Joint Operations

John Bradford’s article “Tax Planning for Oil and Gas Joint Operations”, originally prepared for the Rocky Mountain Mineral Law Foundation’s 2016 Special Institute on Joint Operations and the New AAPL Form 610-2015 Model Form Joint Operating Agreement, has been selected for publication by the University of North Texas Institute of Petroleum Accounting in its Petroleum Accounting and Financial Management Journal.  Part 1 of the article appears in the 2017 Spring, volume 36, no. 1 edition, while part 2 will follow in the 2017 Summer edition. Continue Reading

Thinking About Improving Your Louisiana Facility? Follow These Steps or Risk Unlimited Lien Liability Under Louisiana’s Private Works Act

If a subcontractor or supplier on a Louisiana construction project is not paid in full, it can file a lien against the owner’s property and sue the owner for payment even though it did not contract with the owner and even if the owner has fully paid the general contractor.  This can occur on any project involving any physical change to real property in Louisiana.  See La. Rev. Stat. §  9:4808(A). Continue Reading

U.S. Fifth Circuit Affirms Application of the Subsequent Purchaser Doctrine in Oilfield Contamination Case, Recognizes “Clear Consensus” Among Louisiana Appellate Courts, and Declines Certification to the Louisiana Supreme Court

In Guilbeau v. Hess Corporation, the United States Fifth Circuit Court of Appeals unanimously affirmed the application of Louisiana’s subsequent purchaser doctrine to bar a plaintiff’s claims for property damage resulting from alleged oilfield contamination that occurred prior to his purchase of the property.  The court specifically rejected the plaintiff’s attempt to characterize the multitude of relevant Louisiana appellate court rulings as a “mishmash of appellate jurisprudence,” noting instead that “a clear consensus has emerged among all Louisiana appellate courts that have considered the issue.” Continue Reading

Fifth Circuit Holds that Unpatented Products Can Be Given Patent-Like Protections by Contract

In a breach of contract case involving the overlay of intellectual property and contract law, Luv n’ care, Ltd, a global leader in the design and sale of baby products, filed suit against its former distributor, Groupo Rimar, a.k.a. Suavinex, S.A. (“Suavinex”), for breach of Suavinex’s contractual obligation not to copy any of Luv n’ care’s product designs. Continue Reading

Leave It to the States: Oklahoma Federal Court Dismisses Fracking Suit In Favor Of Administrative Regulation

On April 4, 2017, a federal district court dismissed a citizen-enforcement action under the Resource Conservation and Recovery Act that could have profound impact on fracking suits against the oil and gas industry.

In Sierra Club v. Chesapeke Operating, LLC, the Sierra Club alleged that the deep injection of liquid waste from oil and gas activities has caused an increase in the number and severity of earthquakes in Oklahoma.  To address this alleged harm, the Sierra Club sought several forms of injunctive relief, including reduction of waste disposal activities, reinforcement of structures vulnerable to earthquakes, and the establishment of an independent earthquake monitoring center.

Defendants Chesapeake Operating, LLC, Devon Energy Production Co., LP, and New Dominion, LLC moved to dismiss the case on several grounds.  The court granted the motions on two of these grounds, finding that the issues raised by Sierra Club are best addressed at the state administrative level. Continue Reading

A Summary of Professor Jim Rossi’s Lecture on the “Federalism Battles in Energy Transportation”

At the Fourth Annual Liskow & Lewis Energy Law Lecture, Professor Jim Rossi of Vanderbilt Law delivered a presentation entitled “Federalism Battles in Energy Transportation.” To illustrate these conflicts in energy transportation, Professor Rossi used two transportation examples that differ in geography, product transported, governing body historically responsible for regulation, and often in public perception. Despite these differences, both means of transportation face legal hurdles that require consideration of federalism principles. The examples include the Constitution Pipeline, a natural gas pipeline segment connecting Pennsylvania to New York, and the Plains & Eastern Clean Line Project, a direct current transmission line transporting wind energy from Oklahoma, Kansas, and Texas to Tennessee, Arkansas, and the rest of the south and southeast.

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UCC8, UCC9, and The Hague Convention

Lenders who take security interests in securities accounts are familiar with the rules of Articles 8 and 9 of the Uniform Commercial Code that identify the governing jurisdiction for these transactions.  Commencing April 1, 2017, those lenders and their counsel may also have to consult the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (the “Convention”).[1]  While lenders involved in cross-border transactions will definitely need to factor the Convention into their thinking, a lender that believes it is only involved in U.S. financings will also need to understand the rules of the Convention. Continue Reading

Trump’s DOI to Repeal Fracking Regulations for Federal Lands

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On March 15, 2017, the BLM filed a motion to continue argument and hold in abeyance an appeal before the Tenth Circuit where the parties were contesting the validity of the BLM’s rule regulating “Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands” (“BLM Fracking Rule”). The BLM Fracking Rule imposed stringent restrictions on well casing and wastewater storage requirements, and required drillers to disclose the proprietary chemicals used in fracking operations. Under the Obama Administration, the BLM appealed aU.S. District Court of Wyoming opinion that held the BLM lacked congressional authority to set rules for fracking. Under the Trump Administration, the litigation has reversed course. The BLM is now asking the Tenth Circuit to stay the proceeding due to anticipated DOI rulemaking that would repeal the contested BLM Fracking Rule.

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Louisiana Second Circuit Addresses: (1) Creation of Mineral Servitudes Via Notarial Acts of Correction; (2) Obstacles Suspending the Prescription of Nonuse from Running Against Mineral Servitudes; and (3) Payment of Court Costs in Concursus Actions

In Petro-Chem Operating Co., Inc. v. Flat River Farms, L.L.C., the Louisiana Second Circuit addressed issues affecting the creation and preservation of mineral servitudes and payment of court costs in a concursus action.[1] In the case, an operator initiated a concursus action seeking to resolve ownership interest in minerals underlying property on which it was operating. The dispute as to ownership arose because of questions as to: (1) whether or not a notarial act of correction could be used to perfect a mineral reservation in agreements that did not initially include language effecting such a reservation[2] and (2) whether or not inclement weather or the failure to timely obtain a permit could serve as obstacles sufficient to suspend the prescription of nonuse from running against a mineral servitude under Louisiana Mineral Code article 59.[3] Continue Reading

Louisiana Supreme Court Denies Writ Application in XXI Oil & Gas v. Hilcorp

On March 24, 2017, the Louisiana Supreme Court declined to consider the Louisiana Third Circuit Court of Appeal’s decision in XXI Oil & Gas v. Hilcorp.[1] The Third Circuit’s decision involved the interpretation of Louisiana’s well cost reporting regime under La. R.S. 30:103.1-103.2 (collectively referred to herein as “the Statutes”) with respect to: (1) the parties entitled to receive reporting under La. R.S. 30:103.1 and (2) the scope of penalties under La. R.S. 30:103.2 that may be imposed against a unit operator, who fails to provide sufficient well cost reports.[2] For now at least, the Court’s decision to deny writs in XXI Oil & Gas effectively leaves unit operators subject to increased reporting obligations under La. R.S. 30:103.1 and more expansive penalties under La. R.S. 30:103.2 in situations where they fail to provide adequate reporting.[3] Continue Reading

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