On a superficial level, an Outer Continental Shelf oil and gas mineral lease is an ordinary two-party contract between the federal government and a willing third party, write Anthony C. Marino and C. Jacob Gower of Slattery, Marino & Roberts of New Orleans.

“However, an OCS lease implicates far more than the usual ‘four corners’ of the contract because lessees and their agents must navigate a labyrinth of rules and regulations to remain in compliance with their lease obligations. Given the large volumes of oil and gas production from the OCS, understanding this maze is a daunting, yet important, task,” they write.

Hall Estill of Oklahoma is expanding its oil and gas practice with the addition of Leah Rudnicki to the firm’s Oklahoma City office.

“Leah’s distinctive background as in-house counsel, leader of an oil and gas company and extensive litigation experience will further enhance our expanding oil and gas practice,” Michael D. Cooke, Hall Estill’s managing partner, said. “She will provide our clients valuable strategic business advice along with superb litigation counsel.”

Rudnicki, who was most recently a partner at Reed Smith in Houston, is an Oklahoma native who graduated from the University of Oklahoma College of Law in 2001.

“I have a long history with Hall Estill beginning in 1997 with a summer job while completing my undergraduate degree at the University of Oklahoma, and I’m grateful to be back,” Rudnicki said. “Hall Estill has a solid vision and robust strategy for the future, and I look forward to serving our clients on issues that are important to their business.”

Less than 10 years after law school, Leah was president of a private independent oil and gas operator with operations assets in Oklahoma and Texas. Under her management, the business grew from 17 operated wells in Oklahoma to nearly 300 operated wells in Oklahoma and Texas and from two to more than 30 employees.

In a release, Hall Estill said that, as a litigator in private practice, Rudnicki has represented, counseled and advised a diverse range of clients, from small independent businesses to Fortune 500 companies in various disputes in front of state courts, federal multi-district panels, arbitration panels, and local and federal administrative agencies. Most recently, her practice has focused on general advice, litigation, and dispute resolution for oil and gas clients, including, landowner/joint venture disputes, drilling in city limits, alleged breach of joint operating agreements and lease agreements, issues related to horizontal drilling, fracking and disposal wells (water pollution/earthquakes), and royalty/JIB accounting disputes.

Rudnicki previously worked as in-house litigation counsel for a Fortune 500 oil and gas services company. In this position, she advised the company’s corporate litigation department and health, safety, environment, and security departments on a wide range of issues, including responding to potential new regulations affecting the oil and gas service industry. She was instrumental in updating, implementing, and communicating internal policies, preparing a strategy for effectively managing a national toxic tort docket and assessing successor liability claims.

As the dreaded packet arrives in the mail from a Bankruptcy Court, many mineral owners are being introduced to the third “B” of the oil business — Boom, Bust, Bankruptcy. Wade Caldwell and Zach Fanucchi of Barton, East & Caldwell in San Antonio offer a quick primer, published on EagleFordForum.com, for mineral owners faced with this situation.

The authors say a mineral owner should usually look at bankruptcy issues in the following order:

• What kind of bankruptcy has been filed?
• What kind of legal relationship do I have with the bankrupt company?
• What can I do in response to the bankruptcy filing?
• How does this affect the royalties I am owed, or that will become due?
• How does this affect my lease?

They explain the different types of bankruptcy, tell mineral owners what they can do in response, describe the complete process, tell how long it can take, and explain how the process can affect a lease and royalties.

Read the article.

A decade-old oil leak that could last for another century was caused by an “act of God” during a hurricane in the Gulf of Mexico, the president of the company responsible said Wednesday, according to an Associated Press report.

“This event hits home for us,” said Taylor Energy President William Pecue, the last remaining full-time employee at the New Orleans-based company. “This is our community. We live here and it is very special to us.”

The AP said the public meeting at an LSU research center is a requirement of a court settlement that Taylor Energy reached in September with environmental groups, which accused the company of withholding information about the leak.

Read the article.

Rigzone.com reports that oil and gas chief information officers (CIO) faced with budget cuts in 2016 will implement plans for preserving innovation while making low-cost investments to minimize business operational costs, according to a recent forecast by IDC Energy Insights.

“When oil traded at $100/barrel, oil companies were more focused on expanding their geographic footprint, but the decline in oil prices now has companies focusing instead on reducing costs, either through layoffs or spending cuts. Reducing costs is the top priority behind IT spending, followed by improving efficiency and productivity of processes and boost revenues, Chris Niven, research director for IDC Energy Insights, told Rigzone.”

“Niven said IDC estimates that 25 percent of all oil and gas companies will be using cognitive plus advanced analytics in the oilfield by 2019 to improve performance and production by 10 percent,” wrote Karen Borman.

Read the article.

Platts has posted an on-demand webinar reviewing the natural gas markets winter-to-date and a taking forward look at the first quarter of 2016. Storage started the winter at all-time record levels and prices have seen dollar handles, but with a strong El Nino in effect, what will the beginning of 2016 have in store?

Analysts Jeff Moore and Bob Yu discuss:

• Storage: How will year-ending storage inventories look? Will we reach capacity in 2016?
• Prices: What’s the price outlook for the beginning of next year? Could 2016 be the first year on the road to recovery?
• Demand: How are freeze-offs affecting winter production? When will LNG demand show up in 2016?
• Weather: How is El Nino affecting the energy markets so far? What are some scenarios for 2016?

Watch the on-demand webinar.

Joe Jamail, the Texas billionaire who became the richest practicing attorney in the U.S. after winning jury verdicts in civil lawsuits that included a $10.5 billion award for Pennzoil Co. in its landmark case against Texaco Inc. during the 1980s, has died, reports Claims Journal. He was 90.

He died in Houston from complications with pneumonia, the Austin American- Statesman newspaper reported, citing university officials it didn’t name.

“His representation of Pennzoil in a case against Texaco over the purchase of Getty Oil Co. led to a record jury verdict of $10.5 billion and helped make him one of the U.S.’s most sought-after lawyers during his five decades in practice,” according to the Claims Journal

Read the article.

The third program in Norton Rose Fulbright‘s global litigation school web seminar series discusses unconventional oil and gas development in the United States and the dramatic rise in claims associated with that activity.

“These claims have ranged from environmental claims alleging that hydraulic fracturing, a process used in unconventional oil and gas development, is causing contamination to underground fresh water aquifers to claims for nuisance due to the increased noise and dust associated with the drilling,” the firm says on its site. “It has also led to an increase in the number of heavy truck accidents and lawsuits involving crude by rail and several high profile derailments.”

Watch the video.

In an industry known for its inventiveness, energy companies may turn to a new source of capital outside traditional debt or equity markets or even large asset sales, reports Sidd Dadhich in an article posted on the website of The Texas Journal of Oil, Gas, and Energy Law.

“The crowdfunding phenomenon has given entrepreneurs passed over by institutional investors access to much needed capital. The 2012 Jobs Act made equity crowdfunding, which gives investors a piece of the company they fund, easier for accredited investors,” according to the article.

The SEC did not open up equity crowdfunding to individuals (or couples) with net worths below $1 million, but newly released rules will enable non-accredited investors to join in equity crowdfunding under certain constraints, beginning in January 2016.

“If companies and crowdfunding portals can adequately manage the litigation risk, the possibility of opening investment opportunities to the ‘little guy’ will be a welcome prospect for all parties involved,” Dadhich writes.

Read the article.

Principal Energy Institute has posted a free on-demand webinar designed to help energy project developers, operators and investors understand the risks associated with those projects, and how to mitigate them. The presenter is energy risk expert, Christopher Lohmann , VP of Alternative Energy Solutions, Energi, Inc.

Large renewable energy projects require substantial capital investments, and depend on predictable, long-term cash flows in order to provide investor returns that can attract that capital, the institute says on its website.

The webinar addresses the questions of:

• What are the risks in renewable energy projects, and to which party can they be assigned?
• How can risks be managed, and at what cost?
• Which risks can be eliminated?

Watch the on-demand webinar.

Anadarko Petroleum Corp. must pay a $159.5 million civil fine for its role in the 2010 Gulf of Mexico oil well whose blowout that caused the largest U.S. offshore oil spill, reports Reuters.

But in his ruling, U.S. District Judge Carl Barbier in New Orleans said Anadarko was not at fault for the spill.

His order said “the company’s 25 percent ownership stake in the Macondo well made it part of the “polluting enterprise” responsible for the April 20, 2010, disaster, which began with an explosion on the Deepwater Horizon drilling rig, killing 11 workers.”

Read the article.

Lawyers with Dallas-based Gruber Hurst Elrod Johansen Hail Shank won a $33 million verdict in a gas transportation contract dispute and a $28 million verdict in a fraud/fiduciary breach claim in the oil patch in recent weeks.

A Minnesota federal court has entered a $32.9 million judgment on behalf of Great Lakes Gas Transmission Limited Partnership, a Houston-based interstate natural gas pipeline company, finding that an Indian conglomerate violated the company’s contract to provide natural gas transmission services. The judgment was entered on September 16 by U.S. District Judge Susan Richard Nelson, following a jury trial in Duluth.

“This case has been resolved after more than six years of attempts by the defendants to avoid the simple principle of honoring a written contract,” says attorney David W. Elrod of Gruber Hurst Elrod Johansen Hail Shank, who represented Great Lakes throughout the litigation. “Given the issues involved and the size of this judgment, the case offers important precedents for determining an appropriate discount rate in future litigation involving long-term contracts, as well as federal court jurisdiction.”

In the other case, a Texas jury has awarded more than $60 million to two groups of oil and gas investors who were defrauded of significant profits from oil and gas production leases covering thousands of acres in West Texas. The Aug. 19 verdict includes more than $28 million awarded to Lowry Hunt of Mansfield’s L.W. Hunt Resources and Richard Raughton of Fort Worth, and is believed to be the largest ever in Fisher County and the surrounding counties.

The 3½-week trial heard in Judge Glen Harrison’s 32nd District Court included evidence that attorney Kerwin Stephens of Stephens & Myers in Graham and Abilene oilman Chester Carroll of Alpine Petroleum concocted a fraudulent scheme to cut existing partners out of an oil and gas partnership and take the profits for themselves.

An article in Kane Russell Coleman & Logan’s new Energy Law Today blog reports on a case before the 5th U.S. Circuit Court of Appeals that raises the question: “When will an anti-indemnity statute bar an often well-crafted legal indemnity term in a master-service agreement?”.

The case is Tetra Techs., Inc. v. Continental Ins. Co., No. 15-30446.

“In Tetra, the commercial fight was between Tetra, which sought to enforce an indemnity clause against its subcontractor, Vertex Services.  Continental, Vertex’s insurer, tried to block any indemnity payment, relying, in large part, on the LOAIA,” writes Andrea (A.J.) Johnson.

“The district court held that the decommissioning of a platform in a salvage operation did not come under the LOAIA, and, thus, Tetra’s claim for indemnity was enforceable. In opposition, appellant Continental contends that the trial court too restrictively interpreted the [Louisiana Oilfield Anti-Indemnity Act].”

Read the article.

A West Texas jury has awarded more than $43 million to a group of oil and gas investors after finding that their business partners had breached fiduciary duties by crediting themselves for financial contributions they never made and by excluding the investors from a lease acquisition project after it became apparent that the project would be tremendously successful.

Dallas attorneys Frank L. Branson, Eric T. Stahl and Debbie Branson of The Law Offices of Frank L. Branson represented one of the investor groups, consisting of Dallas-based Tiburon Land and Cattle LP and Trek Resources Inc. on behalf of the Three Finger/Black Shale Prospect Partnership. The Fisher County trial was heard in 32nd District Court in Roby.

“In Fisher County a deal is a deal,” said Branson in a report on the firm’s website. “It was very clear to the jurors that the defendants did not honor their word and took opportunities that did not belong to them, and that’s a very serious matter in West Texas.”

Read the article.

Hidden perils in oilfield master service contracts have the potential to bring even a thriving company to its knees, making even big business with big clients a big mistake, writes  Jordan J. La Raia in Gardere’s Texas Energy Law blog.

“The good news is that even today big and small operating companies usually expect to negotiate (even with the small guys) and a few small requests can make the difference between meeting budget and bankruptcy,” he writes, before discussing three red flags that could be found in the next contract.

Those flags include the areas of insurance, enforceable indemnities, and catastrophic events.

Read the article.

The Kay Bailey Hutchison Energy Center at the University of Texas School of Law will present a free webinar explaining the laws, both new and old, that govern land use for energy development in Mexico and other important considerations for working with land owners.

The webinar will be Wednesday, Oct. 21, at 1 p.m. Central time.

“Mexico has passed legislation to encourage international investment in the country’s energy sector with great opportunities for economic development in oil, gas, electricity infrastructure and power generation,” the Center says on its website. “However, land use controversies could impede progress. Energy-reform legislation passed last summer gives energy development priority in land-use disputes which has provoked resistance from land owners and political opponents to the reform. The law also establishes obligations for energy developers related to matters such as notice and payment.”

Topics will include:

• Energy Reform Legislation: Land Use and Land Owners
• Land Use Negotiation Process
• Landowner Compensation

Register for the webinar.

Charles Sartain, writing in Gray Reed & McGraw’s Energy and the Law blog, uses a football metaphor to describe how a negotiating party could fail to score an enforceable contract while near the end of the negotiation process.

He describes a case involving the sale of a 2,232-acre Texas ranch and the sale of an oil and gas lease on the property. A broker agreed to sell the tract even though he didn’t have a brokerage agreement, and time was of the essence. During the process, the broker and the seller made offers and counteroffers about the commission and other benefits to the broker.

The appellate court found that a counteroffer operates as a rejection of the original offer, thus no agreement was reached.

Read the article.

Oil prices, which held below $50/bbl in August 2015, are projected to remain below $60/bbl through 2016, writes Michael P. Lennon Jr., a partner in Mayer Brown. “As a result, the conventional belief is that oil and gas disputes will rise in the latter part of 2015 and into 2016, triggered in some measure by the banks’ next round of reserve-based redeterminations for oil and gas companies. Whether it is for this reason or some other, financial strain in the industry is likely to spin off disputes between producers and service companies and/or among working interest partners. Infrastructure and construction disputes also will be in the mix.”

His article outline three steps that could maximize opportunities for dispute avoidance. “If a dispute is not avoided, a party taking these steps should also be in a better position to manage and, hopefully, prevail in an eventual dispute,” he writes.

Read the article.

The Fourth Court of Appeals in Texas recently held that surface owners control the matrix of the underlying earth; thus, a surface owner can give permission to drill through the subsurface to an adjacent lease, reports Lauren N. Randle in The Energy Law blog published by Liskow & Lewis.

The case is Lightning Oil Co. v. Anadarko E&P Onshore, No. 04-14-00903-CV, 2014 Tex. App. Lexis 8673 (Aug. 19, 2015).

“According to the court of appeals’ decision, there was also no evidence that Anadarko would conduct a seismographic survey which could constitute a trespass under Texas law,” the article says. “Moreover, Lightning offered no evidence that Anadarko has bottomed or opened a well within Lightning’s lease. Absent proof of these actions and without the right to exclude Anadarko from drilling through Lightning’s mineral estate, Lightning’s claim of trespass failed.”

Read the article.

Steptoe & Johnson has posted the presentation slides from a recent webinar on the issues of oil and gas rights in a bankruptcy proceeding including the risks and the opportunities in restructuring and acquiring challenged assets in today’s ever-changing market.

Presenters were Brian R. Hopkins of the Charleston, W.V., office, and Arthur M. Standish of the Charleston, Houston and The Woodlands, TX, offices.

They discussed:

• What is the effect of a bankruptcy filing
• Three bankruptcy code provisions that commonly arise when lessor or lessee of an oil and gas lease files bankruptcy
• Whether a contract is an unexpired lease, executor contract, or real property transfer
• Consequences of assuming or rejecting oil and gas leases/contracts
• Risks and challenges in restricting an oil and gas company
• Opportunities of an oil and gas bankruptcy

View the presentation slides.