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Drill Deeper

News and Updates on Oil & Gas Legal Issues

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Reading, Writing and Retainage

Posted in Legal Updates

A recent Louisiana Fourth Circuit decision has clarified what is prompt payment of obligations due under a public works contract.  In Woodrow Wilson Construction LLC v. Orleans Parish School Board, 245 So.3d 1 (4/18/18), rehearing denied (5/15/18) the Fourth Circuit reinforced a public entity’s duty to promptly pay sums due and payable under contract, or… Continue Reading

Take Heed to Avoid Being Cast a Single Business Enterprise

Posted in Legal Updates, Louisiana Corporate Law, Oil and Gas Operations

The Louisiana Third Circuit’s recent decision in Duhon v. Petro “E,” LLC, 2018-57 (La.App. 3 Cir. 7/11/18), stands as a reminder to companies of the exposure to liability they may face under the single business enterprise (SBE) theory.  Reversing a summary judgment dismissal, the court ruled that the plaintiff, an aggrieved landowner, presented facts sufficient… Continue Reading

Enforcement of Non-Compete Agreements in Louisiana Still an Uphill Battle

Posted in Employment Law, Legal Updates

Under Louisiana law, “[e]very contact or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession trade, or business of any kind, except as [otherwise] provided [by law], shall be null and void.”  See La. R.S. 23:921(A)(1).  The Louisiana First Circuit’s recent decision in Envirozone, LLC v. The Tarp Depot, Inc.,… Continue Reading

ALERT- Severance Tax Audit Update

Posted in Legal Updates, Tax

In December of 2017 and again in March of 2018 producers won victories in oil severance tax disputes with the Louisiana Department of Revenue before the Board of Tax Appeals and in the First Circuit Court of Appeal. The Department of Revenue, however, has appealed these rulings and continues to raise the same issues in… Continue Reading

A Primer on Consent-To-Assignment Clauses Under Louisiana Law

Posted in Legal Updates

As the name suggests, a consent-to-assignment clause is one way of preventing an obligor from subsequently transferring its contractual rights and obligations to a third party assignee without the prior consent of the original obligee. The original intent behind including these clauses in contracts, such as leases, was to ensure that the assignee would be… Continue Reading

Louisiana Department of Revenue Attempts to Rewrite Crude Oil Purchase Agreements in an Effort to Collect More Severance Taxes

Posted in Legal Updates, Tax

The Louisiana Department of Revenue and Louisiana oil producers continue to battle over the imposition of severance tax on oil and condensate produced in Louisiana.  Gordon Arata Montgomery Barnett partner Martin Landrieu has posted previously on the Department’s attempt to charge hundreds of thousands of dollars in “delinquent taxes” the Department claims is owed under… Continue Reading

Courts At Odds Whether Non-Operator Lessees Can Invoke LA. R.S. 30:103.1 and LA. R.S. 30:103.2

Posted in Legal Updates

Under La. R.S. 30:103.1 and 30:103.2, an unleased owner in a commissioner’s unit is entitled to reports on production and costs from a well in the unit and, in certain circumstances, statutory penalties if such reports are not timely provided.  But is a non-operator lessee entitled to the same relief?  Two recent courts have reached… Continue Reading

Texas appellate court rules that mineral leases with municipalities are worth more than the paper they are written on

Posted in Legal Updates

On February 7, 2017, a Texas appellate court ruled that the city of Dallas must face a $200 million lawsuit filed back in 2014, where a driller alleged that the city acted improperly by entering into a mineral lease with the company and then denying it permits to drill—effectively rendering the lease worthless. See City… Continue Reading

Louisiana’s Law of Reversionary Mineral Interests Revisited

Posted in Legal Updates, Louisiana Mineral Code

Can a landowner in Louisiana whose land is burdened by a mineral servitude sell the land and reserve the reversionary mineral rights or sell the reversionary rights to another?  Although almost no jurisprudence addresses these issues, the Louisiana Third Circuit did so recently.  On November 2, 2016, in Sterling Timber Associates, L.L.C. v. Union Gas… Continue Reading

Protecting Operators Who Act In Reliance on an Order of the Commissioner of Conservation

Posted in Legal Updates, Louisiana Office of Conservation

The Commissioner of Conservation is the head of the Office of Conservation, a division of the Department of Natural Resources and the agency with primary regulatory responsibility for oil and gas operations in Louisiana.  As the Office of Conservation is a state agency, actions taken by the Commissioner are subject to the usual rules and… Continue Reading

Boustany Introduces “Ending Legacy Lawsuit Abuse Act”

Posted in Legal Updates

U.S. Rep. Charles Boustany has introduced the Ending Legacy Lawsuit Abuse Act (H.R. 6169), which is aimed at preventing forum-shopping by attorneys representing landowners in “legacy lawsuits” based on historical oil and gas operations.  The bill would amend the Federal Water Pollution Control Act to allow defendants to remove certain lawsuits implicating federal waters from… Continue Reading

Governor Edwards and Attorney General Landry Still at Loggerheads Over Potential Oil and Gas Lawsuits

Posted in Legal Updates

The internal tussle between Louisiana’s governor and attorney general over potential lawsuits against the oil and gas industry continues to rage.  On September 21, 2016, Governor John Bel Edwards reaffirmed that he continues to be in conflict with Attorney General Jeff Landry over the governor’s desire to sue the oil and gas industry for its… Continue Reading

PHSMA Proposes New Regulations for Transporting Hazardous Materials

Posted in Legal Updates

On April 1, 2016, I wrote about new legislation revamping federal energy pipeline rules and reauthorizing the Pipeline and Hazardous Materials Safety Administration (PHSMA), the federal agency that oversees pipeline safety.  The legislation was ushered through the Congress with bipartisan support and a sense of urgency from numerous congressmen who felt that new regulations in… Continue Reading

Certain Legal Deadlines Suspended in Louisiana Due to Flooding

Posted in Legal Updates, News

In the wake of the devastating floods that have affected south Louisiana, the State of Louisiana and the federal district courts in Louisiana have suspended certain legal deadlines. Following his declaration of a state of emergency, Governor John Bel Edwards signed an amended Executive Order on August 17, 2016 (amending a previous executive order of… Continue Reading

Amendment to Louisiana Risk Fee Statute Closes Loophole Shown by Recent Case

Posted in Legal Updates

Louisiana Revised Statute 30:10, commonly referred to as the Risk Fee Statute, was amended during the 2016 Regular Session of the Louisiana Legislature.  The statute as amended took effect June 13, 2016.  The amendment expressly allows an operator of a commissioner’s unit to assert the risk fee penalty against a non-operator lessee by sending the… Continue Reading

Louisiana Supreme Court Denies Writs

Posted in Legal Updates

By a vote of 4-3 on Friday, June 17, 2016, the Louisiana Supreme Court denied writs in reviewing the First Circuit’s decision upholding the Commissioner of Conservation’s permit to Helis Oil & Gas Company, LLC to drill an oil and gas well in St. Tammy Parish over the objection of the parish government.  We reported the… Continue Reading

Adjacent Lands Clauses in Mineral Leases

Posted in Legal Updates

The adjacent lands clause is often a forgotten clause in oil, gas and mineral leases. However, the clause can prove to be vital for an operator’s successful and cost effective development of a field.  In general, a mineral lease grants to the lessee the right to use the surface of the leased premises as reasonably… Continue Reading

Pipeline Safety Legislation Picks Up Steam

Posted in Legal Updates

On March 3, 2016, the Senate approved a bill revamping federal energy pipeline rules and reauthorizing the Pipeline and Hazardous Materials Safety Administration (PHMSA), the agency that oversees pipeline safety.  In addition to reauthorizing PHMSA, the Senate bill would instruct the agency to prioritize its regulatory agenda instead of new rulemaking; this would include new… Continue Reading

Preemptive Authority of Commissioner’s Actions Affirmed

Posted in Legal Updates, Oil and Gas Production

On March 9, 2016, the Louisiana First Circuit Court of Appeal issued an important decision affirming the supremacy of state law, and of the decisions and action of the Commissioner of Conservation, in regulating oil and gas production in the State.  St. Tammany Parish Government v. Commissioner, 2015-CA-1152 (La. 1 App. Cir. 2016). According to… Continue Reading

“New York City?? Get a Rope!” Considering Chapter 11 Venues for Distressed Oil and Gas Companies

Posted in Bankruptcy, Legal Updates, News

For distressed mid-sized E&P and oil field service companies in Louisiana, the thought of filing a petition for chapter 11 bankruptcy relief in New York or Delaware may leave as bad a taste in the mouth as that poor cowboy who got a jar of salsa made in New York City*—and for good reason. As… Continue Reading

Hayes Fund Comes Undone

Posted in Legal Updates

On December 8, 2015, the Louisiana Supreme Court tossed out the 3rd Circuit’s shocking award in Hayes Fund for First United Methodist Church of Welsh, LLC v. Kerr-McGee Rocky Mountain, LLC. Much to the dismay of many of us in the oil and gas community, the 3rd Circuit had reversed the district court’s ruling in… Continue Reading


Posted in Legal Updates, News

On November 12, 2015, the Louisiana State Mineral and Energy Board requested comments by December 4th regarding its to the current State Lease form, which has been in use for oil and gas leases from the Mineral Board since 2000. Gordon Arata attorneys closely reviewed the proposed form and requested an extension of the December… Continue Reading