Kean Miller LLP, Lafayette, LA
Disbursing Oil & Gas Revenue – Who Pays Who When
Production is good, but paying production can be tricky. Oil and gas leases, joint operating agreements, pooling orders, and statutes all create obligations on producers, lessees, and operators to disburse proceeds. Problems often arise over who has the primary obligation for such payments. In some instances, the operator may have a duty to directly pay the lessors of even the non-operators, while in others the obligation may depend on contractual rights or arise from statutory requirements. If the operator elects or is required to pay all proceeds of production, issues of liability necessarily arise. This presentation will examine judicial decisions and state payor statutes that establish deadlines and conditions for payment. It also will consider the responsibility for disbursing oil and gas revenue on a state-by-state basis while noting how a joint operating agreement, pooling order, unleased mineral owner, or other unique situation can impact the outcome.
Bryan Cave Leighton Paisner LLP, Denver, CO
Suncor Energy (U.S.A.) Inc., Denver, CO
Calling the Repo Man: Enforcing and Avoiding Liens in the Oil Patch
Regardless of the commodity cycle, operators encounter insolvent non-operators, disputes with contractors over amounts owing, and subcontractors who have not been paid by a general contractor. Most oil and gas producing states have enacted legislation that provides some level of protection to parties that claim they haven’t been paid money owed. This presentation will look at the statutory liens available in the oil patch, the circumstances under which they arise, and the extent to which they apply. It will also discuss perfection, enforcement, and potential avoidance of these liens. Finally, the presentation will address how these statutory liens relate to other liens such as tax liens, operator’s liens under joint operating agreements, and other contractual liens securing financings.
Elias, Books, Brown & Nelson, P.C., Oklahoma City, OK
Crowley Fleck PLLP, Bismarck, ND
Pooling Actions by Unleased Mineral Owners and Responses by Operators
The majority of oil and gas producing states allow compulsory pooling of an unleased mineral owner into a spacing unit. After a spacing unit is created or an application for permit is granted, operators may have little incentive to acquire leases from mineral owners in a spacing unit. This presentation will identify the avenues an unleased mineral owner may utilize under a variety of scenarios, including participation in a well, self-development, the mineral owner’s grant of a lease to an affiliated entity, and protests to applications for pooling, increased density, or other regulatory permits. The presentation will discuss how an operator may respond to these actions by unleased mineral owners.