Jonathan Baughman

Author: Jonathan Baughman

Jonathan represents clients in a wide variety of complex civil litigation and oil and gas disputes. From the initial case assessment through closing argument at trial, he has extensive experience associated with complex civil cases. In many cases, Jonathan’s work has involved dealing with thousands of documents, multiple witnesses and complicated issues. Jonathan has chaired the firm's Oil & Gas Practice Group since 2005, has been AV-Rated by Martindale-Hubbell® since 2005, and has been named to the Texas Super Lawyers Rising Star list, a Thomson Reuters service (2006-2007) and the Texas Super Lawyers list, a Thomson Reuters service (2012-2014).

28May

Recent Global Events and the Increased Importance of the Reasonably Prudent Operator Standard

Posted by: Jonathan Baughman in Uncategorized

Given the recent historic developments of the global pandemic and the dramatic drop in oil prices, the oil and gas industry is facing new issues never before encountered at this magnitude. For instance, storage of oil and gas is expected to reach full capacity. Pipeline companies are refusing to accept production in their pipelines. Global demand has come to a dead halt. The Railroad Commission has been asked to consider implementing statewide proration. In many cases, producers are facing the dilemma of involuntarily shutting in wells at the risk of possibly losing valuable leases. How long these events will last is currently unknown but many in the industry expect the industry fallout will stretch out over the next 12-18 months, if not longer.

It is inevitable that the law governing oil and gas will once again take on new developments. Undoubtedly, over the ensuing months many in the industry will be faced with challenges which will, by necessity, invoke the reasonably prudent operator standard in the context of the lessor/lessee relationship. This article provides a reminder of those duties and the interplay of the standard in the relationship between the lessor/lessee.

28Sep

Forecasting a Rise in Lease Termination and Royalty Litigation Amidst Prolonged Oil Slump

Posted by: Jonathan Baughman in Primers and Insights, Royalty Litigation

Originally appearing in the Energy Expert Analysis Section of Law360.

Law360, New York (September 25, 2015) — Over the last five years, American shale production has more than tripled. Since last October, however, the oil and gas industry has trudged through a long and pronounced slump in crude oil prices in what has been termed the “Oil Bust of 2015.” Oil prices dropped below $40 a barrel last month for the first time in over six years, and major relief from this slump may be distant as EIA recently announced that it expects crude to average $59 per barrel in 2016.

This low-price environment has been unfavorable for most royalty owners, as low oil prices generally lead to proportionately low royalty payments. It has also lead to a slow-down in additional drilling and development activity as many oil and gas companies slashed budgets for 2015 and 2016. Drilling contractors have stored hundreds of rigs, and oil and gas companies have drastically reduced their workforces. A strong indicator of this slow-down can be found in the Texas Railroad Commission drilling statistics, showing 964 permits issued last month in Texas, compared with 2,440 in August of 2014. Read More »