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Louisiana Oil & Gas Law

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The Louisiana Legislature passed “Act 312,” La. R.S. 30:29, in 2006 to provide a procedure for ensuring that amounts awarded to remediate environmental damage are actually spent on remediation.  Act 312 sets forth a multi-step scheme that is triggered once a party is found responsible for environmental damage, culminating with Department of Natural Resources (“DNR”) approving a plan “to evaluate or remediate” the environmental damage. La. R.S. 30:29(C)(2)(a). Thereafter the trial court “shall adopt the plan approved by the [DNR] unless another party proves by a preponderance of the evidence that another plan is more feasible,” id. 30:29(C)(5). 
Continue Reading Third Circuit Affirms Trial Court’s Refusal to Adopt DNR’s Most Feasible Plan in Sweet Lake Land & Oil Co. v. Oleum Operating Company

The White House has announced the nominees to fill four vacant seats on the U.S. Fifth Circuit and two seats in the Eastern District of Louisiana.
Continue Reading Nominees Announced for U.S. Fifth Circuit and Eastern District of Louisiana Seats

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

A recent decision from the Eastern District of Louisiana provides a mixed bag for pipeline companies or others whose operations involve canals.  Significantly, the decision from Judge Milazzo holds that during the existence of a right-of-way/servitude, Louisiana servitude law imposes a continuing duty to prevent canals from expanding and widening over time, unless unambiguous contractual language allows otherwise.
Continue Reading Federal Court Finds A Continuing Duty Under Louisiana Law To Prevent The Erosion of Pipeline Canals

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

A July 3, 2017 ruling from the 17th Judicial District establishes that a mineral servitude owner’s obligation under Mineral Code article 22 “to restore the surface to its original condition” means the condition of the property at the creation of the servitude—and not the property’s pristine, pre-operation condition.  The court’s commonsense ruling in Sterling Sugars v. Amerada Hess Corporation, No. 100091 (17th JDC) appears to be the first time a state court has directly interpreted the meaning of the phrase “original condition” in the Article 22 context.
Continue Reading Trial Court Rules that Article 22’s “Original Condition” Refers to Property’s Condition at the Creation of a Mineral Servitude

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