A lawsuit that accused a Fort Worth lawyer of cheating another lawyer out of his share of legal fees in the $51 million Chesapeake Energy settlement has been dismissed, reports The Fort Worth Star-Telegram.

A state district judge in Fort Worth shut down the litigation against Dan McDonald in which attorney Jim Ward was seeking up to a third of the millions in legal fees stemming from the Chesapeake case.

“In May, McDonald announced the settlement of his massive lawsuit against Chesapeake, once the face of the Barnett Shale gas drilling boom. In about 400 lawsuits representing more than 13,000 clients, McDonald accused Chesapeake of deducting higher-than-necessary production costs from royalty checks,” writes reporter Max B. Baker.

Read the Star-Telegram article.

As oil prices remain volatile, trade secret and intellectual property protection continues to be a key component of ensuring profitability, according to Orrick’s Trade Secrets Watch. But the law in this area may be evolving quicker than industry insiders would like.

The article discusses a Pennsylvania case, Robinson Township v. Commonwealth, that may make it more difficult for some energy companies to protect the trade secret status of some of their most valuable information. In that case, the Pennsylvania Supreme Court struck down several remaining provisions of the state’s controversial P.L. 87 legislation, the Pennsylvania General Assembly’s short-lived and controversial attempt in 2012 to provide uniform laws and regulations governing oil and gas development in the Commonwealth.

“At the national level, the story is consistent with Pennsylvania’s — in the sense that the law and its direction remains variable,” the article says.

Read the article.

Skadden, Arps, Slate, Meagher & Flom’s Energy Regulation and Litigation Group has produced the fourth edition of the Skadden Energy Law Handbook, which includes a summary of recent developments.

On its website, the firm says the handbook contains 16 chapters covering a broad range of issues arising in the context of FERC, CFTC and antitrust regulation of the energy sector (e.g., market manipulation, merger review, electric reliability and open access transmission tariffs, among others).

The updates cover such topics as compliance programs, audits and investigations, criminal and civil penalties, FERC market manipulation enforcement, CFTC regulation, antitrust enforcement, reliability, affiliate rules, natural gas, false statements, and more.

Download the handbook.

Reuters tells the story of “Chapter 22” companies, oil and gas industry firms that return to bankruptcy court after their first Chapter 11 overhaul failed to fix their problems.

Reporter Jessica DiNapoli describes the scene at Global Geophysical Services LLC, where a few employees are winding down what is left of an oil and gas industry data provider that only three years ago had a staff of more than 1,000 and offices around the world.

“A casualty of high debt and a cash crunch, the company filed for bankruptcy in early 2014 before tumbling oil prices pushed scores of other energy firms over the edge. Last year, it became one of nearly 20 companies that have already exited bankruptcy, but is now one of the first to have filed for creditor protection again,” she explains in the article.

She quotes Edward Altman, a professor emeritus at the Stern School of Business at New York University, as saying that nearly a fifth of all U.S. companies that exit bankruptcy as a going concern seek creditor protection again within about five years.

Read the Reuters story.

S&P Global Platts has posted a free on-demand webinar taking a look at the potential impact the recent presidential election could have on petroleum, natural gas, power and metals.

The webinar covers:

• Impact on oil and gas markets
  • Arctic and Atlantic Coast production
  • The future of fracking
  • Pipeline projects – will they get built?
  • Supply/demand implications
• Impact on metals markets
  • US infrastructure impact on steel
  • What to do about “steel dumping”?
  • Economic uncertainty and gold
• Impact on renewables and environmental regulations
  • Is the War on coal over?
  • Buildout of renewable power generation
  • The future of biofuels

View the on-demand webinar.

Two new opinions, one from the San Antonio Court of Appeals and one from the El Paso Court of Appeals, again tackle the task of construing mineral and royalty conveyances and reservations, reports John McFarland in his Oil and Gas Lawyer Blog.

He explains that many such cases have arisen as a result of recent shale plays, where lands never before productive have suddenly become valuable, leaving courts have to clear up muddy deed language.

In his blog post, he discusses Laborde Properties, L.P. v. U.S. Shale Energy II, LLC and Greer v. Shook.

Read the article.

ScottMadden, Inc., an energy consulting firm, recently released its Fall Energy Industry Update.

On its website, ScottMadden says this issue focuses on strategic drivers that are propelling the industry like nuclear challenges, changing energy supply and demand patterns, and federal-state policy friction:

• Nuclear Challenges and Responses: Low natural gas prices, challenging capacity markets, continuing investment needs, and weak carbon price signals are putting pressure on existing nuclear plants, especially in competitive markets. What are the risks and implications?
• The Duck Curve: Everyone talks about the duck curve, but what really drives it? Our analysis confirms the duck curve is real and growing faster than expected. In addition, we found some interesting, unexpected, and important nuances. It turns out that the conventional wisdom is not supported by the data.
• Emerging Federal-State Policy Friction: Historically, the boundary between federal and state jurisdiction in the wholesale and retail energy markets has been called “a bright line.” Was it? Is it? How is this unfolding, and what does it mean?

Download the update.

Starting next year, the federal government will require that all new or replaced gas lines for hundreds of thousands of apartments and small businesses across the U.S. must be equipped with special valves that can shut off gas automatically when a line is ruptured.

In a post on its website, Androvett Legal Media & Marketing reports that the government’s Oct. 11 announcement expands the mandatory installation of excess flow valves beyond new single-family homes. The valves, priced at around $30, don’t prevent gas lines from being ruptured, such as when a backhoe accidentally hits one. But by limiting the amount of gas that escapes, federal regulators say the valves can prevent a buildup of fuel that can contribute to explosions or fires.

“These simple and inexpensive devices can save dozens of lives and millions of dollars in property damage each year,” says Dallas attorney Tom Carse. “But gas companies, contractors and consumers need to understand how and where the valves should be located. Otherwise the devices will provide very little or no protection.”

In August, Carse filed suit against Atmos Energy on behalf of 20 people who suffered physical and emotional injuries and property damage after a 2015 gas explosion destroyed four homes and heavily damaged nine others in their Waxahachie, Texas, neighborhood.

The lawsuit claims that Dallas-based Atmos Energy was negligent in how it located and installed the excess flow valves during construction of the subdivision. Court documents claim that the explosion occurred when an Atmos gas line was cut by contractors who were working to install underground fiber-optic cable.

Attorneys representing oil and gas royalty owners with interests in the Texas Eagle Ford Shale have filed a federal lawsuit against Talisman Energy USA Inc. based on claims that the company manipulated oil and gas production volumes by as much as 20 to 30 percent and consistently shorted royalty payments, according to a news release posted by Androvett Legal Media and Marketing.

Attorneys from Texas-based Provost Umphrey Law Firm, L.L.P., are representing Eugene and Kimberly Cran of DeWitt County in their claims against Warrendale, Pennsylvania-based Talisman.

The article explains how a change in the operating agreement between Talisman and  Norway-based energy company Statoil in the Eagle Ford joint venture resulted in the Crans receiving monthly checks from both companies. But the production numbers accompanying the checks didn’t match — with Talisman reporting smaller total production.

Read the news release.

While the oral arguments about the merits of the Clean Power Plan are heard by the U.S. Court of Appeals for the D.C. Circuit, the American Wind Energy Association (AWEA) remains confident the plan will be upheld by the courts, reports Renewable Energy Magazine.

The Clean Power Plan is the Environmental Protection Agency’s rule placing the first-ever federal carbon pollution limits on American electric power plants, writes Robin Whitlock.

Tom Kiernan, CEO of AWEA, issued a statement, saying in part: “The clean-energy train has already left the station in the form of affordable renewable energy already making major carbon pollution reductions today. The Clean Power Plan reasonably builds on these existing trends in the power sector that have allowed many states to reliably and cost-effectively slash carbon pollution at a rapid rate over the last decade through investment in clean sources of electric generation, like wind power. We fully expect the D.C. Circuit to agree that EPA correctly took these facts into account in considering well-established pollution control measures, such as renewable energy, when establishing carbon reduction standards for power plants under the plan.”

Read the article.

Image by Mike Mozart

New York Attorney General Eric Schneiderman is investigating why Exxon Mobil Corp. hasn’t written down the value of its assets, two years into a pronounced crash in oil prices, reports The Wall Street Journal.

Schneiderman’s office already is looking into Exxon’s past knowledge of the impact of climate change and how it could affect its future business.

“Since 2014, oil producers world-wide have been forced to recognize that wells they plan to drill in the future are worth $200 billion less than they once thought, according to consultancy Rystad Energy,” reports Bradley Olson. “Because the fall in prices means billions of barrels cannot be economically tapped, such revisions have become a staple of oil-patch earnings, helping to push losses to record levels in recent years.”

But Exxon is the only major oil producer not to take any write-downs, leading some analysts to question its accounting practices,” Olson writes.

Read the article.

When a 5.8 magnitude earthquake centered in Oklahoma shook that state and several others over Labor Day weekend, regulators in the Sooner State ordered 37 oil and gas wastewater disposal wells to shut down because of previous connections to quakes, according to a report by Androvett Legal Media and Marketing.

There also have been earthquakes in Texas that some researchers believe are tied to disposal wells used for wastewater fluids resulting from hydraulic fracturing/fracking operations. While state regulators continue to question a definitive link between these wells and earthquakes, some major oil and gas producers are already taking steps to try to avoid problems.

“The more sophisticated producers are already beginning to use technologies to recycle water used in fracking and to develop new formulas that substantially reduce both water usage and the amount that must be disposed by subsurface injection. Those changes will provide numerous benefits, which may include reducing the potential for seismic activity,” said Leonard Dougal, an environmental lawyer with Jackson Walker LLP in Austin who is also a former petroleum engineer.

“In most cases, however, the disposal of wastewater is contracted out to other service companies, and many producers aren’t involved in decisions about where those wells are drilled or how they are operated. But that separation may not totally free producers from a potential lawsuit given the recent widespread publicity about earthquakes. Producers also should take steps to reduce liability by avoiding use of disposal wells or contractors working in areas of known seismic activity.”

Oil & Gas Journal will present a webinar sponsored by Schneider Electric on computational pipeline monitoring (CPM) techniques and their use in detecting commodity releases on pipelines.

The free webinar will be Oct. 6, 2016, beginning at 1 p.m. Central time.

“This webcast will look at what is so special with natural gas pipelines compared to liquid pipelines and how these specifics impact the base assumptions associated with Computational Pipeline Monitoring (CPM) techniques. An evaluation will then be done as to whether the five well-known CPM techniques outlined in RP API 1130 are suitable for detecting commodity releases on natural gas pipelines,” the Journal says on its website.

The speaker will be Lars Larsson, a Senior Product Manager at Schneider Electric.

Register for the webinar.

Dozens of law professors banded together to assail a federal court’s recent decision striking down the Obama administration’s hydraulic fracturing rule, according to a report in E&E Publishing’s EnergyWire.

The report says 36 energy, public lands and environmental law experts filed a friend-of-the-court brief with the 10th Circuit, arguing that the U.S. District Court for the District of Wyoming got it wrong when it found fracking to be beyond the authority of the Interior Department and its Bureau of Land Management.

“The lower court’s decision has no basis in legal precedent or relevant statutes and violates basic canons of statutory interpretation,” the professors told the 10th U.S. Circuit Court of Appeals, which is reviewing the decision. “It reads a sweeping government-wide exclusion into a surgical amendment explicitly tied to one statute. As a result of this decision, the BLM cannot fulfill its statutory mandate to serve as the chief steward of our public lands.”

“In particular, the professors take issue with the lower court’s interpretation of the Safe Drinking Water Act, as amended by the Energy Policy Act of 2005,” writes E&E Publishing reporter Ellen M. Gilmer.

Read the article.

Horizontal wells drilled across lease lines were clearly not contemplated in a typical oil and gas lease, and lessors should not be forced to accept a formula for royalty payment to which they have not agreed, advises John McFarland of Graves Dougherty Hearon & Moody in an article published in Oil and Gas Lawyer Blog.

His article discusses some recent articles published on the subject of allocation wells. He describes an allocation well as one “that crosses one or more lease lines and that produces from more than one lease without pooling those leases and without any agreement with the royalty owners as to how production will be allocated among the leases crossed by the well.”

“Whether or not one calls it pooling, allocation of production from a well drilled across multiple tracts is a method of sharing production among the owners of those tracts. In Texas, that cannot be done without the lessors’ agreement,” he continues.

Read the article.

New details found in the leaked documents known as the Panama Papers indicate the magnitude of the use of shell companies in Africa to launder money, often illegally obtained from bribes, involving the sale of oil and other natural resources, according to an article published by Androvett Legal Media & Marketing. “That should prompt any oil companies doing business in Africa to quickly take stock of their contracts on that continent,” says Thomas Fox, a Houston consultant and lawyer who advises companies on international business and anti-bribery laws.

“It is imperative that any multinational company operating in Africa immediately check its contracts and payments to determine if it has been doing business with one of the shell companies listed in this most recent report,” says Fox, who is editor of the FCPA Compliance and Ethics Report. “If they fail to do that, those companies will be in a much worse position when they receive an inquiry from the U.S. Department of Justice or Securities and Exchange Commission.”

The latest revelations were published Monday by the International Consortium of Investigative Journalists (ICIJ) in collaboration with African news organizations. “These reports indicate that Panamanian law firm Mossack Fonseca established shell corporations for people in 44 of Africa’s 54 countries to assist in oil, gas and mining deals,” says Mr. Fox.

He notes that the first two waves of data published from the leaked documents came from politicians who used offshore tax havens to hide money and from U.S. citizens who used offshore tax havens to evade federal income taxes. “This third round of analysis puts the spotlight on those foreign officials who needed to launder money received from bribery and corruption.”

Fox, the former general counsel of an oilfield services company, has published several books on corporate compliance and the Foreign Corrupt Practices Act. He is the founder of Advanced Compliance Solutions.

A Fort Worth attorney who helped represent residents of Johnson, Tarrant and Dallas counties in a lawsuit against Chesapeake Energy and Total E&P USA is suing his co-counsel for a third of the legal fees from the nearly $53 million settlement, reports The Dallas Morning News.

Jim Ward of Wardlaw Services accuses Dan McDonald and his Fort Worth firm of breaching a 2014 agreement on how settlement proceeds would be handled and ignoring his contribution to the winning case.

“Oklahoma City-based Chesapeake and Total, an American subsidiary of a French firm, agreed in May to settle claims that they underpaid royalties to 13,000 plaintiffs in the Barnett Shale,” reports Austin Huguelet.

Huguelet explains: “In his lawsuit, Ward claims that while McDonald received ‘the recognition and spotlight’ as lead counsel in the case, the Wardlaw team spent two years assembling the research that served as a ‘blueprint for victory.'”

Read the article.

Chesapeake Energy will pay about $51 million to wipe out hundreds of lawsuits accusing the Oklahoma City energy giant of cheating North Texas property owners out of millions of dollars in natural gas royalties, according to a report in the Fort Worth Star-Telegram.

Max B. Baker reports that the law firm representing the property owners said 91 percent of their 13,000 clients — representing 97.15 percent of the natural gas production — agreed to accept the out-of-court settlement.

“The lawsuits alleged that Chesapeake deducted higher-than-necessary postproduction costs from royalty checks,” Baker reports. “They contended that the company used sham sales to affiliates to transport and market the natural gas to increase what it earned.”

Read the article.

BP Plc faces more than $20 million in penalties and surrendered profits after a U.S. regulator found that the energy giant manipulated commodity markets in Texas, according to a report by Bloomberg and published by The Business Times.

The case dates back to 2008, when — according to the Federal Energy Regulatory Commission — BP rigged prices at a Texas natural gas hub.

The order upholds an earlier ruling by the agency’s judge. BP had denied the allegations, Bloomberg reports.

“We find the violation here to have been very serious,” the commission said. “BP manipulated the market to profit from a natural disaster, and it did not stop after a trade or two but rather kept the scheme going for nearly three months.”

Read the article.

The U.S. Securities and Exchange Commission charged Dallas-based Breitling Energy Corp. and its CEO, “Frack Master” Chris Faulkner, of fraudulently spending tens of millions of dollars of investors’ money on lavish meals, expensive cars, strippers and escorts, reports Mark Curriden of The Texas Lawbook in the Houston Chronicle‘s FuelFix blog.

The SEC claims that Faulkner presided over an $80 million oil and gas fraud that included Breitling, Crude Energy, Patriot Energy  and Breitling Oil and Gas. Charges also named eight corporate executives, including Breitling Energy General Counsel Jeremy Wagers, who previously practiced law at Houston-based Vinson & Elkins and Skadden, Arps, Slate, Meagher & Flom in Houston, Curriden reports.

“Faulkner,  a frequent guest on CNBC, Fox Business News and CNN, , disseminated false and misleading offering materials, misappropriated tens of millions of dollars of investor funds and attempted to manipulate Breitling Energy’s stock, the SEC charged in a 63-page complaint filed Friday in federal court in Dallas. Faulkner was dubbed “frack master” by the media because of his advocacy of the industry, according to Breitling Energy’s web site,” according to the report.

Read the article.