Chrysta Castañeda has been awarded The National Law Journal’s Elite Trial Lawyers Award for 2018.

The Castañeda Firm, based in Dallas, represents litigation clients in the energy industry.

“One of Ms. Castañeda’s most notable recent victories was a $145 million verdict on behalf of T. Boone Pickens and Mesa Petroleum, which was recognized as one of the largest in the nation in 2016 by NLJ and one of the largest in Texas by Texas Lawyer,” the firm said in a release.

Castañeda served as lead trial counsel for Pickens’ company in the long-running dispute, which resulted in a five-week trial in Pecos, Texas.

Read details of the award.

An arbitrator’s failure to disclose his longstanding business relationships with one of the parties requires setting aside the arbitration awards, the U.S. District Court for the Southern District of Texas ruled, according to Bloomberg Law.

Reporter Brian Flood writes that Patrick Long, part of a three-member arbitration team, heard a contractual dispute over joint oil and gas operations between OOGC America LLC and Chesapeake Exploration LLC. But the court found that Long lied when he “claimed that he did not have professional or social connections with the parties or witnesses.”

“In reality, Long was a long-time business partner of Yong Siang Goh, the board chairman of FTS International Inc., an affiliate of Chesapeake Exploration,” Flood writes. “In addition, Long failed to disclose that he had represented FTS as a lawyer, that FTS’s deputy general counsel was a former partner at his law firm, and that his law firm had employed Goh’s daughter.”

The court vacated the awards.

Read the Bloomberg Law article.

The Texas Supreme Court has held that the discovery rule delayed the running of the statute of limitations on behalf of the holder of a recorded right of first refusal to purchase mineral interests, reports the Energy & the Law blog of Gray Reed & McGraw.

Gray Reed partner Charles Sartain explains: “The trustees sued the Tregellases for buying the minerals without allowing the Trust to exercise its ROFR, contending that a contract was formed when they sued more than four years after the Tregellases’ purchase; the suit was their acceptance of the right to purchase the minerals, they said.”

The appellate court held that the trust suffered an injury when the minerals were sold, but the discovery rule delayed limitations.

Read the article.

Just because voters in two states rejected measures that energy companies opposed, but that doesn’t mean the fight is over for oil and gas companies, warns Buchanan Ingersoll & Rooney in a website post.

Colorado voters turned down an initiative that would have dramatically limited the use of hydraulic fracturing. And Washington voters rejected a proposed carbon fee on fossil-fuel emissions.

“Though it’s early, East Coast lawmakers in states like Connecticut, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and Vermont may introduce their own carbon-pricing legislation in the near future. And of course, Washington isn’t quite ready to give up yet either,” according to the post.

Read the article.

A Louisiana appellate court has added to the relatively sparse body of appellate rulings in pipeline expropriation matters with an unpublished opinion affirming that landowners whose property is expropriated must prove their entitlement to severance damages to a “legal certainty.”

Writing in the Liskow & Lewis Energy Law Blog, Laura Springer Brown discusses the case of  Enterprise Products Operating, LLC, v. Southwood Terminal, L.L.C.

In its ruling, the court affirmed a two-part test for severance damages: The landowner must prove a diminution in value, “and only then could the jury continue on to the issue of the amount of damages.”

Read the article.

Image by Elvert Barnes

A federal judge temporarily blocked construction of the controversial Keystone XL pipeline, ruling late Thursday that the Trump administration had failed to justify its decision granting a permit for the 1,200-mile long project designed to connect Canada’s oil sands fields with Texas’s Gulf Coast refineries.

The Washington Post characterized the order as a  major defeat for President Trump, who attacked the Obama administration for stopping the project in the face of protests and an environmental impact study.

Post reporters explain that the order “requires the administration to conduct a more complete review of potential adverse impacts related to climate change, cultural resources and endangered species. The court basically ordered a do-over.”

Read the Washington Post article.

The Dallas Morning News reports that Texas businessman Christopher Faulkner, better known by his now infamous moniker “Frack Master,” has admitted to securities fraud, tax evasion and money laundering and faces up to 12 years in prison, federal officials said Tuesday.

Reporter Jess Mosier writes that Faulkner, the former CEO of Dallas-based Breitling Energy, became a star in business circles for his high-profile media appearances defending hydraulic fracturing or fracking. He used fake college degrees and skimpy business experience to convince Dallas business elite and Texas political elite that he was an oil and gas expert.

“The SEC effectively shut down Breitling Energy and related businesses after suing Faulkner and 11 others in 2016 for misusing $23.8 million of the $80 million they raised for oil and gas investments,” according to Mosier. “Besides the prison time, Faulkner must pay back the nearly $24 million made from his schemes, under the terms of his settlement.”

Read the Dallas News article.

The National Transportation Safety Board is well known for its sleuthing on plane crashes. However, oil and gas executives often need better education about how the agency tackles one of its other responsibilities—investigating pipeline accidents, advise attorneys with the national law firm LeClairRyan.

The catastrophic gas explosions that destroyed dozens of homes in Massachusetts this month have called attention to the NTSB’s role in investigating such incidents, noted Mark A. Dombroff, an Alexandria-based member of LeClairRyan and co-leader of its Transportation Industry practice. “Most, but not all, in the pipeline business are aware that something like this will immediately trigger a federally mandated and led investigation,” he said. “But their counterparts in aviation tend to be far better prepared to contend with the highly specific—and high-stakes—investigative process relied upon by NTSB.”

Read the article.

Indemnity provisions are widely used in the energy industry as a method of contractually apportioning liability between parties. These provisions are a staple in Master Service Agreements and can be unilateral or mutual, explains Zoe Vermeulen in a post on the website of Kean Miller LLP.

The author discusses oilfield anti-indemnity acts in Texas, Louisiana, New Mexico and Wyoming,.

The article also covers construction anti-indemnity acts.

“Like the Oilfield Anti-Indemnity Acts, these construction anti-indemnity acts vary widely from state to state and have many exceptions and nuances. And awareness of and familiarity with these statutes is also critical to adequately evaluating the viability of a contractual indemnity provision,” writes Vermeulen.

Read the article.

A recent article posted on the website of Haynes and Boone analyzes nationwide trends in the filing and certification of royalty class action cases, which result in much greater exposure to producers than individual royalty owner cases. For example, in the past five years, producers have settled class actions for amounts in excess of $80 million.

“Ninety-six putative class actions filed during the period from 2001 to the present are analyzed in this article. Since Congress enacted the Class Action Fairness Act of 2005 (CAFA), most of these cases were litigated in federal court,” write David Ammons and Mike Stewart.

“These cases deal almost exclusively with alleged underpayment of natural gas royalties (oil royalty litigation rarely arose during the period analyzed).”

Read the article.

Holland & Hart will host a panel discussion titled “Shifting Tides: What Will the 2018 Elections in Colorado, New Mexico, Wyoming, and Alaska Mean for the Energy Industry?”

The event, which includes lunch, will be Friday, Oct. 12, 2018, 11 a.m.-1 p.m. in the firm’s Denver office.

Key governors’ races in the energy-producing states of Colorado, New Mexico, Wyoming, and Alaska are in full swing, the firm says on its website. The panel will discuss how these races, along with potential shifts in the make-up of state legislatures, might affect energy policy and future development in these critical states.

Moderator: Sean Parnell
Attorney | Holland & Hart LLP
Former Alaska Governor

Speakers:

COLORADO
Eric Waeckerlin
Partner | Holland & Hart LLP

Tracee Bentley
Colorado Petroleum Council Executive Director

NEW MEXICO
Ryan Flynn
New Mexico Oil & Gas Association Executive Director

WYOMING
Susan Aldridge
Anadarko Petroleum Corporation Director, Wyoming Regulatory and External Relations

Joe Milczewski
Anadarko Petroleum Corporation Government Relations Manager

Location:
Holland & Hart LLP
555 17th Street,
Suite 3200
Denver, CO 80202

For more information contact Lauren Israel at 303.295.8201 or lmisrael@hollandhart.com.

Register for the event.

Minimum volume commitment contracts (MVCs), often referred to as throughput agreements, are agreements under which a shipper or producer—a counterparty—undertakes to transport an agreed minimum volume of a commodity such as natural gas, NGL or crude oil through a third-party operator’s assets, such as pipelines or processing plants, over a specified period, explains a post on the website of Opportune.

“In the midstream industry, these contracts are typically utilized to enable the operator to recoup the costs of constructing infrastructure, such as a processing plant or pipeline lateral, for the benefit of the counterparty. Under these agreements a counterparty pays a shortfall or deficiency fee if the MVC is not met for a specified period—monthly, quarterly or annually,” the authors write.

Read the article.

The U.S. Environmental Protection Agency’s proposed Affordable Clean Energy (ACE) rule would establish guidelines for states to develop plans to address greenhouse gas emissions from certain existing fossil-fuel-fired power plants.

A post on the Beveridge & Diamond website says ACE would replace the Obama Administration’s 2015 Clean Power Pla, which EPA has proposed to repeal on the basis that it exceeded EPA’s authority.

“In particular, the current Administration does not believe it has authority under Section 111 of the Clean Air Act to require regulated entities to take actions “outside the fenceline,” as contemplated by the CPP.  Accordingly, the ACE plan would impose only “inside the fenceline” requirements on electric generating units,” write authors Brook J. Detterman and Grant Tolley.

Read the article.

Marcellus Shale landowner coalitions — their form, function and impact — will be the topic of a one-hour, web-based seminar offered by Penn State Extension at 1 p.m. on Thursday, Aug. 23, 2018.

Presenting the webinar will be Grace Wildermuth, a Penn State doctoral degree student in the Department of Agricultural Economics, Sociology, and Education. She will discuss research from her thesis on landowner coalitions.

Topic will include:

• coalition models and forms
• benefits and detriments of membership in a coalition
• best practices identified by members of coalitions
• specific effects of participation in a coalition for agriculturalists
• potential future applications of the landowner coalition model.

Register for the webinar.

The Department of Energy has announced a final rule that will expedite the approval process for small-scale exports of natural gas, reports Cadwalader.

Special counsel Brett A. Snyder writes:

The DOE explained that the new rule is intended to accelerate its processing of small-scale export applications and reduce administrative burdens for the small-scale natural gas export market.

Effective August 24, 2018, the DOE will issue an export authorization, without public notice and comment, to an applicant submitting a complete application to export natural gas, including liquefied natural gas (“LNG”), to countries with which the United States has not entered into a free trade agreement (“FTA”) that requires national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (i.e., non-FTA countries), if the application meets two criteria.

Read the article.

Bruce “Chip” Morris of Kane Russell Coleman Logan has posted a new podcast in the firm’s Energy Law Today blog about the top 10 mistakes employers can make—in the oilfield, and beyond—when drafting non-compete agreements.

Morris, a director in the firm’s Houston office, is the head of the firm’s Intellectual Property Group.

The 10 mistakes involve such areas as overbroad restrictions, choice of forum clauses, agreements that aren’t appropriate for all employees, and agreements that haven’t kept up with technology.

Listen to the podcast.

After 30 years of wrestling with the cumbersome six-part test for determining whether a contract to perform services related to oil and gas exploration on navigable waters is maritime, the 5th Circuit took up a case earlier this year in an effort to streamline the test and bring clarity to an area of the law mired in uncertainty, reports The Energy Law Blog of Liskow & Lewis.

Deciding that several of the factors were either redundant or unnecessary, the court carved away at Davis & Sons until it was left with a two prong test, write John Almy and William W. Pugh.

Those two prongs are:

(1) Is the contract to provide services to facilitate drilling or production of oil and gas on navigable waters? and

(2) Does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract?

Read the article.

Reuters reports that the former chief executive of Energy XXI Ltd agreed to settle civil charges that he failed to disclose to investors more than $10 million in personal loans obtained from company vendors and a candidate for the company’s board, the U.S. Securities and Exchange Commission said.

John D. Schiller Jr. didn’t admit or deny the charges, but he settled with the SEC by paying a $180,000 penalty and agreeing not to serve as an officer or director of a public company for five years, the SEC said.

The Reuters article explains: “The SEC alleged Schiller maintained an extravagant lifestyle using a leveraged margin account secured by his shares in the oil and gas producer. When oil prices tumbled in 2014 and he was faced with margin calls, Schiller accepted more than $7.5 million in personal loans from companies that did business with Energy XXI, the SEC claimed.”

Read the article.

A federal district court judge has affirmed a take-nothing defense verdict for the owner of an Oklahoma City-based company that unknowingly provided services in connection with a mineral royalties Ponzi scheme, finding that the company, Cianna Resources Inc., does not have to repay $21.7 million the scheme paid to Cianna for mineral interests and commissions.

“Our group of attorneys did an outstanding job and put together a powerful case,” said Sawyer Neely of Dallas-based Sayles Werbner, one of the attorneys who represented Cianna. “It certainly was a David-and-Goliath situation, and we appreciate that our hard work resonated with the jury.”

In a release, the firm described the case:

In 2008, Cianna Resources and owner Kyle Shutt entered into a sub-broker agreement with Oklahoma-based Ruthven Oil & Gas, LLC, for the purchase of mineral interests. Ruthven was working with Dallas-based Provident Royalties, Joseph Blimline and others, in what authorities described as a scheme involving nearly 7,800 investors and losses of more than $400 million.

The scheme collapsed and the company went bankrupt after natural gas prices fell. Mr. Blimline was convicted in 2012 for his role in the scheme, and a bankruptcy trustee later attempted to recover funds from investors who had profited before the collapse, including seeking $21.7 million from Cianna Resources.

The trial before U.S. District Judge Jane Boyle in Dallas lasted more than a week when the jury returned the defense verdict on March 28. The successful defense hinged on providing evidence that Cianna had acted in good faith and provided valuable services to an entity. On June 28, Judge Boyle entered a final judgment, denying the trustee’s motion for a new trial and rejecting requests to throw out the jury verdict.

Cianna was represented by Bill Johnson, David Elder, and Matt Brockman of Oklahoma City-based Hartzog Conger Cason & Neville, in addition to Mr. Neely.

The case is Segner et al v. Ruthven Oil and Gas LLC et al, case number 3:12-cv-01318, in the U.S. District Court for the Northern District.

The oil and gas industry is benefiting from a surge in start-up companies focused on digital transformation and radical change proving that the oil and gas start-up ecosystem is alive and growing.

Frost & Sullivan’s Oil & Gas Innovation Council will present a complimentary webinar titled “Start-ups Driving Innovation in Upstream Oil & Gas” on Tuesday, July 31, 2018, at 10 a.m. CDT.

Dylan Ellett, a Frost & Sullivan leading oil and gas analyst, and a panel of industry experts from start-up companies will showcase their solutions, impacts on the industry and real-world scenarios of success and hardships along the journey, from founding to investment.

• Discover start-up companies that are providing innovative solutions to industry challenges
• Hear real success stories and pain points from start-ups
• Interact with start-up companies

Register for the webinar.