–Gas gathering/storage agreements & liquefied natural gas (LNG) –Pipeline contracts –Portions of joint operating agreements may “touch and concern” land • In some ways, analysis similar to “typical” executory contracts The contract itself is often the only tool that a producer has for asserting control over the value chain once production leaves their custody. If a gathering or disposal agreement is a contract that imposes real property covenants on the oil and gas lease, it affects not only the value of lessee’s interest in production but also the lessor’s royalty interest. Amanda Bronstad | Fantastic opportunity! With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. Visit your My Account page to make your selections. Genesee Energy Oil & Gas Furnace Maintenance Agreements Studies have shown that regularly scheduled maintenance may reduce your utility costs by up to 20%. }); In response to the ongoing pandemic, many federal agencies and state legislatures have revised their rules to allow for broader utilization of online solutions to remotely conduct business. ALM Marketing Services var myDate = new Date(parseInt(1610638906000)); Judge Christopher Sontchi at the U.S. Bankruptcy Court for the District of Delaware ruled in October that none of Extraction Oil & Gas Inc.'s agreements with a number of gathering, processing and transportation firms satisfied the requirements for a real property interest "running with the land" per Colorado state law, as opposed to obligating the debtor or another party to fulfill its terms at a later date. Increases Gas Gathering and Processing Capabilities in Carthage Area. The Pipeline Safety Act of 1992 gave PHMSA the authority to regulate rural gas gathering lines. oil and gas leases that pose issues with rejection under § 365. The lender, identified as Virage SPV 1 LLC, filed the disclosure Tuesday in U.S. bankruptcy court, while the brother of Girardi Keese founder Tom Girardi says his sibling is “not capable of making rational decisions" and has asked a bankruptcy judge to appoint him to speak on Tom Girardi's behalf. GAS CONTRACTS AND AGREEMENTS GAS CONTRACTS AND AGREEMENTS Unlike oil, gas cannot be moved by truck or similar methods; it must be gathered and sent to a sales point. var pday = moment(myDate).format("MMMM DD, YYYY"); var myDate = new Date(parseInt(1609277917000)); var pday = moment(myDate).format("MMMM DD, YYYY"); As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. In your inbox. Contact Us / What's New for Interactive Electronic Signing in 2021? On a well by well basis, this is equally important on a small acquisition as a large one. The health and safety of our customers and Genesee team members and their families remain top priority as we are taking necessary proactive and preventative measures to … Transaction in Partnership with Tailwater Capital. Legal Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events. Similarly, inAlta Mesa, a Texas bankruptcy court recently ruled, applying Oklahoma law, that certain gathering agreements also created such real property covenants. My last example is not one for faint of heart and one that I hope no-one runs into after reading this article. In re Sabine Oil & Gas Corp., Bankr. Coronavirus-Related Leave After the FFCRA Expires, The Three Keys to a Successful B2B ABM Program. Virtual. The services performed under a gas gathering agreement typically include treating the raw gas from the wellhead to remove hydrogen sulfide and carbon dioxide, dehydrating the gas to remove excess water, moving the gas from the wellhead to a processing plant, and compressing the gas. $("#sub2").append( pday ); The result is an asset burdened with the equivalent of a 50% override, something that no amount of reservoir due diligence can overcome. For example, in. $("#sub0").append( pday ); Dan Kennedy has spent the last 8 years negotiating oil and gas agreements, including 5 years focusing on midstream agreements at ConocoPhillips Company. The gathering system can transport over 450 MMcfd of raw gas. P.C. Sponsored by: Accusoft or viewing does not constitute, an attorney-client relationship. Francis J. Lawall and Marcy J. McLaughlin Smith | This information is not intended to create, and receipt document.addEventListener('DOMContentLoaded', function() { Customer Service / In a highly anticipated decision— Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC (In re Sabine Oil & Gas Corp.), 734 Fed. The agreements are related to gas gathering systems, which include a network of small pipelines that carry gas away from wells for further processing. As oil is transported and processed through its value chain into its component products, it can be stored, trucked, railed, or piped from one location to the next. This article will introduce dedication, which is one of the primary components of these agreements and also raises awareness of related key legal and commercial issues. FAQ / A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors. The legal requirements of a covenant running with the land vary slightly from state to state, but the dispositive attributes of the covenant wer… }); Webcast Date: Tuesday, January 26, 2021 | Expert panelists will weigh the typical pros and cons that come with buying or building solutions. Our Team Account subscription service is for legal teams of four or more attorneys. document.addEventListener('DOMContentLoaded', function() { Unless the contract is properly drafted, the second producer may be required to split connect the well to connect to their midstream provider or risk violating their agreement. Fantastic opportu... VAN DER VEEN, O NEILL, HARTSHORN, AND LEVIN is pleased to welcome Former Solicitor General/Acting Attorney General of Pennsylvania, District Attorney of Montgomery County and experienced litigator Hon. We have millions of legal documents and clauses that you can search for free. Sabine Oil & Gas Corp. (In re Sabine Oil & Gas Corp.) , 2017 BL 83510 (S.D.N.Y. One producer force pools the other, drills a well on their portion of the pooled acreage, and connects the well to their gatherer. Oil and Gas Industry Update: Second Circuit Upholds Rejection of Sabine Gas Gathering Agreements. Use them for competitive intelligence, drafting documents or to get information about transactions within a particular industry or sector. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team. The pertinent question from the bankruptcy hearing was at the forefront of this appeal: whether the aforementioned gas gathering agreements, in which Sabine dedicated to the appellants production from wells within a designated area where Sabine held leases, constitute covenants running with the land, a real property interest that cannot be rejected or accepted as an executory contract in bankruptcy. Many of these are expired, however, one is a simple volumetric production payment, easily overlooked. Mintzer Sarowitz Zeris Ledva & Meyers LLP With Profound Sadness Mourn the Loss of Jason G. Wehrle. S.D.N.Y. As gas and oil producers struggle to adjust to a new reality, transportation services agreements … *May exclude premium content document.addEventListener('DOMContentLoaded', function() { Appx. Midstream companies invest substantial capital to construct the infrastructure needed to gather and process the producer’s gas. Failure to properly understand these contracts can lead to higher than expected cost through unidentified fees, poor economic performance through reduced profit margins, or increased downtime. January 13, 2021. These Oil Gas Processing Agreements are actual legal documents drafted by top law firms for their clients. Commentary Rejecting Midstream Gathering Agreements in Bankruptcy—Yes, No, Maybe? Touch and Concern One of those nuances was recently identified by the U.S. Court of Appeals for the Tenth Circuit, Stephanie K. Rawitt | The resultant surge in restructuring activities, including Chapter 11 proceedings, among gas and oil producers is the highest in years. An example of a dedication clause in a contract follows: With a few notable exceptions (see In re Sabine Oil & Gas Corp., Bankr. Copyright © 2021 ALM Media Properties, LLC. About Us / Get the timely legal news and critical analysis you cannot afford to miss. Call today! Privacy Policy. 9, 2017)—Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York affirmed 2016 bankruptcy court rulings authorizing chapter 11 debtor Sabine Oil & Gas Corp. ("Sabine") to reject certain gas gathering and handling agreements. Consequentially, gas transportation requires a near-direct pathway from the producing wellhead to the end-user. | In the Badlands case, a Colorado bankruptcy court applying Utah law found that the gas gathering and processing agreement at issue in the case created real property covenants that could not be rejected. This article originally published in North Houston Association of Professional Landmen's Spring Newsletter. This agreement promises to deliver 50% of the production from the wells in exchange for an upfront payment that was already paid to the predecessor. Legalweek(year) will bring together thousands of legal professionals for a series of 5 innovative virtual legal events. | However, there can be important nuances in the challenged transaction that may provide a subsequent transferee with a substantial defense. Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR! So, in the words of King George from the Broadway musical, "Hamilton," “What comes next?”. Nothing on this site should be taken as legal advice for any individual In 2020, we’ve become all too familiar with the struggles of some of our most profitable retailers, airlines, movie theaters, and manufacturers, as well as the gas and oil producers upon which many of these industries rely. This guarantee is called dedication and can be tied to certain wells, acreage, or production volume. Premier mid-sized firm seeks an associate with 2 to 6 years of experience to join its thriving Real Estate Practice Group. He now works as an Oil & Gas, Corporate, and Intellectual Property Attorney at Kearney, McWilliams & Davis, PLLC. Premier research university seeks 7+ year attorney with strong background drafting and negotiating complex contracts to partner with busines... Top Boston litigation boutique seeks 2nd-4th year associate with major law firm training to join collegial group. February 02, 2021 - July 14, 2021 May 25, 2018)—the U.S. Court of Appeals for the Second Circuit in a summary order upheld a 2017 ruling by district judge Jed S. Rakoff that … Mar. The recent downturn forced these companies to enforce this language, drastically cutting into producer revenues. A Colorado bankruptcy court has departed from the widely reported holding in Sabine Oil that permitted a debtor to reject a certain midstream gathering agreement. Legal Compass includes access to our exclusive industry reports, combining the unmatched expertise of our analyst team with ALM’s deep bench of proprietary information to provide insights that can’t be found anywhere else. By adding crude gathering, Blue Mountain can now provide our E&P customers a full suite of midstream services complementing our existing gas gathering and processing and water management services. To manage this process, production companies negotiate complex gathering and processing agreements with midstream service providers. It passes through hundreds of miles of gathering lines, treaters, dehydrators, compressors, processing plants, and fractionators. Advertise With Us/ Build Software Debate: Important Considerations to Explore, Follow It will also discuss how dedication relates to a land manager’s role in negotiating the purchase and sale of leases and gas production. The result is an asset burdened with the equivalent of a 50% override, something that no amount of reservoir due diligence can overcome. }); Find out how B2B marketers in the legal, financial, insurance, and commercial real estate markets are using ABM to successfully drive leads and get business from key accounts. $("#sub1").append( pday ); S.D.N.Y. A note to our customers: Genesee Energy is continuing to monitor the ever changing circumstances of the COVID-19 virus. Consider a situation where the sale of an asset comes with dozens of agreements, disclosed in the form of several dusty boxes (or more recently, hundreds of pages of illegible photocopies). (1) The midstream agreements "touched and concerned" the Debtors' oil and gas leases. Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Sponsored by: DocuSign Law Offices of Gary Martin Hays & Associates Solving the Buy vs. They recoup this cost and generate profit through guaranteed fees tied to the production itself for the life of the contract. Gas from several wells is gathered through a series of small pipelines (“gathering lines”) and then Both options are priced the same. All Rights Reserved. The Legal Intelligencer, Access to the entire ALM network of websites, Unlimited access to the ALM suite of newsletters, Build custom alerts on any search topic of your choosing. As to the first element, Judge Isgur found that gathering agreements "touch and concern" the oil and gas leases because "both the benefits and burdens of the covenants … case or situation. March 8, 2016), this language works with assignment language elsewhere in the agreement to ensure that any transfer of ownership of the dedicated well or acreage takes with it the terms of the agreement. The agreement between the city and an oil and gas operator identifies the specific location and number of wells to be governed by the Operator Agreement. Under the agreements Sabine was also required to pay certain expenses and minimum transportation fees regardless of throughput. In exchange, these midstream companies contract with producers for a promise of payment based on the volume of oil and gas gathered, processed, or transported, and dedications of the underlying oil and gas interests/mineral interests and associated acreage. It is with great pleasure that we welcome the esteemed former supreme Court Justice Richard T. Aulisi to our legal team at Belluck & Fox, LLP. Yearly regular tune ups also drastically reduce the likelihood of emergency This infrastructure costs billions of dollars and disruption along any part of this system can severely impact profitability by curtailing production, shutting in both oil and gas from affected wells. Pennsylvania Accountants, Tax Attorneys, and other Tax Professionals: If you're gearing up for the tax season just ahead, make sure the state's top tax book is in your ... Girardi Keese’s Alleged $10M Debt to Lit Finance Co. Includes Loan to Pa.-Based Firm in NFL Concussion Litigation, 10th Circuit Narrows Scope of Subsequent Transferee Recovery, What Comes Next? To understand how this may affect the performance of an asset, consider the following examples: In summary, it is in the producer’s best interest to ensure that these agreements are fully reviewed and that all the future impact of the terms and conditions are identified. The information on this website is for general information purposes only. Extraction Oil & Gas ... agreements with Denver-based Platte River Midstream and its DJ South Gathering business, and with Rocky Mountain Midstream and Elevation Midstream covering oil gathering. This agreement promises to deliver 50% of the production from the wells in exchange for an upfront payment that was already paid to the predecessor. Gas Gathering Agreement Application A producer will covenant to dedicate all production from its interest in oil, gas, and mineral leases within a designated area, to a designated gatherer, for the purpose of gathering gas for a term of years. Most importantly, for the producer, this means that any purchase of a dedicated asset comes with (whether good or bad) the commercial rates, the terms of services, and the mechanical efficiency and reliability of the system. January 14, 2021, Employees will still require leave if they test positive for the virus, are exposed to the virus, or need to tend to children who are physically not in school. HOUSTON, August 19, 2019 – Elevate Midstream Partners, LLC (“Elevate”), a full-service midstream company headquartered in Houston, Texas, today announced that it has entered into an eight-year gas gathering and treating agreement with Sabine Oil and Gas … Content that pertains to your needs is dedicated to a Successful B2B ABM Program of Jason G. Wehrle rejection §! Allows you to build your bundle and strategically select the content that pertains to your needs to construct the needed. 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