Farmout Agreements
Definition: An oil and gas Farmout agreement is a commitment by the owner of an oil and gas lease, the Farmor, to assign all or part of the working interest in that lease to another party, the Farmee. It is not clearly established when the first Farmout agreement was executed, but by the 1940’s the […]
The Latest News About Fracking!
States Prevent Cities From Banning Fracking: Texas Law: In Denton, Texas, natural gas drilling has started again after an eight month old ban on hydraulic fracturing. Denton, outside Dallas, became the first Texas city to ban fracking followed by other cities that have restricted the method of fossil fuel extraction. Vantage Energy resumed operations at […]
What Is Oil Price’s Future As Industry Is Just Now Adjusting?
Today we have as our guest Allen Brooks who has given us permission to repost his blog on oil prices and how they serve as indicators of the oil and gas recovery. By Allen Brooks: The near month futures contract for West Texas Intermediate (WTI) is sitting just above $59 a barrel as of Friday’s […]
CASE STUDY: SUTTON VS. SM ENERGY CO – Perpetuating ORRIs By Continuous Operations Clauses
Issue: SM Energy Company filed a declaratory judgment action in Texas seeking confirmation of a lower court decision that a 1966 oil and gas lease terminated with respect to approximately 18,000 acres; that appellants’ ORRIs carved out of assignments of the lease were extinguished; and that SM was not obligated to pay appellants royalties based […]
How To Dissect a Lease
Intro: I have received a lot of questions by those new to the oil and gas business about how to break down a lease. For those of you who are veterans, please use this blog as a review, or forward it to any newbies who may benefit. The Contracts: When a client comes to me with information […]
CASE STUDY: HOOKS v. SAMSON LONE STAR, Ltd.
How Much Due Diligence is Due? Introduction: The Hooks v. Samson case is one of the most important recent decisions handed down by the Texas Supreme Court (January 2015) with regard to oil and gas policy issues. Industry professionals are abuzz about its ramifications and it will be in the business literature for a while. […]
Take Points: Horizontal Drilling – What and Where is the Point?
Definition: A take point in a horizontal well is a point along a horizontal drainhole where oil or gas can be produced from the reservoir or defined field. A horizontal well is tantamount to a series of vertical wells drilled along the linear path of the horizontal wellbore. Each take point is the equivalent of […]
Case Study: Chesapeake Exploration, L.L.C. v. Hyder – Royalty Clauses: Free and Clear or Cost Free
Background: The appeal arose out of a dispute involving the construction of the royalty and overriding royalty clauses in the Hyder oil and gas lease, between Appellants – Chesapeake Exploration, L.L.C. and Chesapeake Operating, Inc., and the Appellees – the royalty interest holders. Royalty owners filed suit against Chesapeake alleging a breach of the lease. […]
The Oil Field Night Before Christmas
‘Twas the night before Christmas, and all through the patch, Not a roughneck was stirring, not even to scratch. The drill pipe was stacked by the derrick with care, In hopes a new drill bit soon would be there. It had all gone so well for the first thousand feet, And it looked like the […]
Case Study: Sauder V. Frye – Unitization – Timely Recording Necessary to Perpetuate Non-Drillsite Tracts
Background: The case involved an oil, gas and mineral lease with A.L. Sauder, Jr., as lessee and Rex Allen Frye as lessor. The primary term of the Frye lease expired May 24, 1979. Sauder, Appellant, contended the lease was extended by the execution of a designation of pooled unit, which unit included the Frye lease. […]
