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The first five Plaquemines Parish Coastal Zone Management Act (“CZMA”) cases to be set for trial have been chosen. The Plaintiffs selected Parish of Plaquemines v. Rozel Operating Company, et al., Parish of Plaquemines v. ConocoPhillips Company, et al., and Parish of Plaquemines v. Hilcorp Energy Company, et al.  The Defendants picked Parish of Plaquemines v. Equitable Petroleum Corporation, et al. and Parish of Plaquemines v. Helis Oil & Gas Company, LLC, et al. 
Continue Reading Plaintiffs and Defendants Jointly Choose First Cases for Trial in Plaquemines Parish Coastal Zone Management Act Litigation

In the aftermath of a 2012 platform explosion in the Gulf of Mexico in which three workers were killed, the Department of Justice ultimately indicted the contractors who supervised the work (along with the lease holder, Black Elk Energy Offshore Operations, LLC) with violating the Outer Continental Shelf Land Act (“OCSLA”), a felony carrying a maximum penalty of up to ten years imprisonment.  The contractors were also charged with certain misdemeanor Clean Water Act violations.  The contractors moved to dismiss the OCSLA charges on the basis that their conduct – as contractors – was not covered by OCSLA because they were not the lease holder or operator.  The district court agreed and dismissed those charges, after which the government appealed.  Earlier this week, the Fifth Circuit ruled against the government finding that contractors cannot criminally violate these OCSLA regulations.  United States v. Moss, et al, No. 16-30561 (5th Cir. Sept. 27, 2017).Continue Reading The Fifth Circuit Rejects the DOJ’s Attempt to Charge Black Elk Contractors with OCSLA Felonies

Shale drilling transactions typically involve (1) a party who holds oil and gas leases with underlying shale formations but who may not have the risk capital or expertise to explore such formations (the “Lease Party”) and (2) a party who has the risk capital and the expertise to drill and complete successful horizontal wells in shale formations using hydraulic fracturing techniques (the “Drilling Party”).

In these transactions, the Drilling Party pays for or “carries” all or a substantial portion of the Lease Party’s share of the costs of drilling and completing one or more wells on the leases (“Earning Wells”).  If an Earning Well is completed as a well capable of producing hydrocarbons, the Lease Party will assign a portion of its working interest in the lease or spacing unit to the Drilling Party.
Continue Reading Five Lessons Learned from Executing Shale Drilling Transactions

In Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., the Louisiana Second Circuit upheld a trial court’s ruling that Wells Fargo, a mortgage lender with a security interest in a mineral lease, was solidarily liable with its borrowers (the mineral lessees) for a breach of the mineral lessees’ contractual and statutory obligations to produce in paying quantities, pay royalties, and respond to the mineral lessor’s demands regarding those obligations.  A detailed summary of that decision is available here.
Continue Reading Strong Dissent Warns of “Devastating Economic Repercussions” of Second Circuit’s Decision in Oil & Gas Case

The Parish of Plaquemines amended its petitions in two of the Coastal Zone Management Act (“CZMA”) cases on June 19, 2017.  Prior to the amendment of the petitions, Judge Clement sustained Defendants’ Exceptions of Vagueness in the two cases, namely: The Parish of Plaquemines v. Rozel Operating Co., et al. and The Parish of Plaquemines v. Equitable Petroleum Corporation, et al.  As a result, the Court signed Judgments ordering the Parish of Plaquemines to amend the petitions to “more specifically set forth the factual basis for their claims as to each defendant individually.”
Continue Reading Plaquemines Parish Amends Petition for Damages In Coastal Zone Management Act Litigation

In Settoon Towing, L.L.C. v. Marquette Transportation Company, L.L.C., No. 16-30459 (5th Cir. Jun. 9, 2017), the United States Fifth Circuit Court of Appeals held for the first time that a Responsible Party under the Oil Pollution Act of 1990 (“OPA”) has a statutory claim for contribution to recover purely economic damages from a partially liable third party.

Settoon arose out of a February 2014 collision on the Mississippi River near Convent, Louisiana.  A tug owned by Marquette collided with an oil-carrying barge owned by Settoon as the Marquette tug attempted to overtake the Settoon flotilla.  As a result of the collision, approximately 750 barrels of light crude oil discharged into the river.
Continue Reading U.S. Fifth Circuit Greenlights Contribution Action for Purely Economic Damages Under Oil Pollution Act (OPA)

In Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., the Louisiana Second Circuit upheld a trial court’s ruling that the holder of a security interest in mineral leases was solidarily liable for damages under the Louisiana Mineral Code stemming from its mineral lessees/mortgagors’ actions.[1] In the case, a landowner sued its mineral lessees for: (1) failure to provide a recordable act evidencing the expiration of a mineral lease under Mineral Code articles 206-209 and (2) failure to pay royalties under Mineral Code articles 137-140.[2]
Continue Reading Louisiana Second Circuit Finds Holder of Mortgage Encumbering a Mineral Lease Solidarily Liable with Mineral Lessees for Damages Under the Louisiana Mineral Code

On June 2, 2017 the Louisiana Second Circuit Court of Appeal affirmed a trial court’s judgment cancelling a mineral lease under Mineral Code article 140 and provided further clarity on a production in paying quantities analysis under Louisiana Mineral Code article 124.[1]  The dispute in Gloria’s Ranch, L.L.C. v. Tauren Exploration, Inc., arose from a 2004 mineral lease covering nearly 1,400 acres in Sections 9, 10, 15, 16, and 21, Township 15 North, Range 15 West, in Caddo Parish.[2]  The lease was granted by Gloria’s Ranch, L.L.C. (“Gloria’s Ranch”) to Tauren Exploration, Inc. (“Tauren”) and contained a three year primary term as well as a horizontal and vertical Pugh clause.[3]  Tauren subsequently assigned a 49% interest in the lease to Cubic Energy, Inc. (“Cubic”).[4]
Continue Reading Louisiana Second Circuit Provides Clarity on Production in Paying Quantities and Affirms Lease Cancellation Under Mineral Code Article 140 for Failure to Pay Royalties

On June 1, 2017, the United States Fifth Circuit Court of Appeals in Borcik v. Crosby Tugs, L.L.C. applied a broad definition of the intent required of a plaintiff under the Louisiana Environmental Whistleblower Act.  In doing so, both the Fifth Circuit and the Louisiana Supreme Court apply a more plaintiff friendly standard to claims of environmental whistleblowers.
Continue Reading U.S. Fifth Circuit Adopts Broad Definition of “Good Faith” for Louisiana Environmental Whistleblower Claims

With oil prices still far below their highs of a few years ago, many energy companies—some of which expanded rapidly when oil was north of $100 a barrel—now find themselves with more office space than they can reasonably use (or even afford).  In order to mitigate their lease exposure, these companies are looking to sublease a portion of their office space.

As of Q1 2017, there are approximately 10.8 million square feet of office space available for sublease in the Greater Houston area.  Of that total, approximately forty-two percent (42%) is located in West Houston, including in the Energy Corridor (20%), Westchase (12%) and West Belt (7%) markets.[1]
Continue Reading Often Overlooked Sublease Issues For Office Tenants