La. R.S. 30:103.1 requires operators or producers of oil and gas units created by the Louisiana Commissioner of Conservation to provide reports containing information related to well costs and production to owners of “unleased oil and gas interests” (referred to herein as “103.1 report(s)”). If an operator does not provide the information required under the statute in a manner that is sufficiently detailed after receiving a proper request, the operator or producer “shall forfeit his right to demand contribution from the owner or owners of the unleased oil and gas interests for the costs of the drilling operations of the well” under La. R.S. 30:103.2.
Continue Reading Louisiana State and Federal Courts Split Over Parties Entitled to Reports Under La. R.S. 30:103.1
Texas Supreme Court Agrees to Review Three Oil and Gas Cases in 2016
On September 2, 2016, the Texas Supreme Court agreed to review three oil and gas cases involving issues pertinent to the industry and land and mineral owners.
- BP America Production Company v. Red Deer Resources, LLC
In BP America Production Company v. Red Deer Resources, LLC, the lessee of a top lease, Red Deer, sued the lessee of the base lease, BP, contending that the prior lease had terminated due to a cessation of production in paying quantities.
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Attorney General Finds Governor’s Contract for Legal Services Not Approvable, Unacceptable, Illegal, and Unconstitutional
The dispute between Governor John Bel Edwards and Attorney General Jeff Landry over the retention of several private attorneys to represent the State of Louisiana, through the Department of Natural Resources (“LDNR”) in coastal loss litigation has taken a new twist. These lawsuits were filed by several parish governments alleging dozens of oil and gas companies caused marsh loss by operations that violated state-issued coastal use permits and related permitting requirements.
Continue Reading Attorney General Finds Governor’s Contract for Legal Services Not Approvable, Unacceptable, Illegal, and Unconstitutional
Offshore Companies Face Surge in BSEE Enforcement Actions and Penalties
In recent years, offshore companies have witnessed a marked uptick in the number of enforcement actions undertaken by the Bureau of Safety and Environmental Enforcement (BSEE).[1] Operators face more BSEE inspections, Incidents of Non-Compliance (INCs), and civil penalties than ever before. Meanwhile, the average penalty amount has grown. For example, in 2014 the agency imposed a civil penalty of $1,230,000—an unprecedented figure in the history of the BSEE civil penalty program. BSEE has also begun to target offshore contractors, who, until recently, have not faced exposure to agency enforcement actions. See Island Operating Co., Inc., 186 IBLA 199 (2015). Together, these developments will undoubtedly lead to more litigation and a higher cost of doing business on the Outer Continental Shelf.
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Louisiana Flooding – Legal Update
The Liskow & Lewis family stands by our friends and neighbors throughout the unprecedented flooding in our community. As we begin the long process of recovery, here is a brief legal update on the response of various courts and state agencies:
- State courts: Governor John Bel Edwards has issued an executive order which purports to
All or Nothing: Regulators Strictly Define Pipeline Abandonment
On August 16th, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) issued an advisory bulletin to clarify the regulatory requirements that may vary depending on the operational status of a pipeline under 49 C.F.R. Parts 192 and 195 (2016).
Continue Reading All or Nothing: Regulators Strictly Define Pipeline Abandonment
First Parish Coastal Zone Lawsuit to Proceed to Decision Falls for Failure to Exhaust Administrative Remedies
The first of 40 coastal permitting lawsuits to proceed to disposition has been dismissed for failure to exhaust administrative remedies.
In a ruling released today, Judge Enright of the 24th JDC for Jefferson Parish dismissed The Parish of Jefferson v. Atlantic Richfield Company, finding that the statutory scheme at issue provided administrative channels to investigate and resolve alleged permit violations, and thus those remedies must be exhausted before the plaintiffs could pursue civil damages through the courts.
Continue Reading First Parish Coastal Zone Lawsuit to Proceed to Decision Falls for Failure to Exhaust Administrative Remedies
The Dusky Gopher Frog Causes Big Problems for Industrial and Commercial Development in Parts of St. Tammany Parish
In 2010, under the Endangered Species Act (“ESA”), the United States Fish and Wildlife Service (“the FWS”) designated 6,477 acres in Mississippi and Louisiana as “critical habitat” for the Rana sevosa or the dusky gopher frog. This frog has historically lived in nine counties or parishes across Louisiana, Mississippi, and Alabama. Since its 2001 designation as an endangered species, an estimate of 100 adult frogs are known to only exist in Harrison County, Mississippi. The gopher frog spends most of its time living underground, but will migrate to short-lived, ephemeral ponds to breed. After breeding, the frog will return to its underground habitat, along with its offspring. According to the FWS, the greatest threat to the gopher frog population is the low number of adult frogs and human-induced environmental stressors, such commercial development. Markle Interests, L.L.C. v. United States Fish & Wildlife Serv., 2016 WL 3568093, at *1-2 (5th Cir. June 30, 2016).
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Louisiana Department of Revenue Targets Energy Companies in Rash of Oil Severance Tax Audits
The oil and gas industry has a significant and far reaching economic impact in Louisiana. According to one 2014 study, the total direct and indirect impact on the state is approximately $73.8 billion.[1] Taxes make up a large part of the industry’s direct economic impact in Louisiana: In 2013, the industry paid nearly $1.5 billion in taxes to the State, about 14.6% of the total taxes, licenses and fees collected that year.[2] A large chunk of the taxes paid by oil and gas companies are severance taxes, which are levied on the production of natural resources taken from private and public land or water bottoms within the territorial boundaries of the state.[3] Natural resources might include, for example timber, minerals like oil and gas, coal, salt, or sulphur. Overall, collections on oil and gas amount to nearly 92% of all severance tax collections in the state.[4]
Continue Reading Louisiana Department of Revenue Targets Energy Companies in Rash of Oil Severance Tax Audits
BOEM Releases Long Awaited New Financial Assurance Notice to Lessees and Operators
The Bureau of Ocean Energy Management (BOEM) released its long awaited new Notice to Lessees and Operators (NTL) updating the procedures and criteria used to determine when and if additional supplemental financial assurance is required for an Outer Continental Shelf (OCS) lease, pipeline right-of-way, or right-of-use and easement. New BOEM NTL No. 2016-N01, dated July 12, 2016, takes effect on September 12, 2016 and supersedes and replaces NTL No. 2008-N07, which was commonly referred to by industry as the “supplemental bond” NTL.
Continue Reading BOEM Releases Long Awaited New Financial Assurance Notice to Lessees and Operators