1Jan

Dirty Tricks & Cheap Moves in the Oilpatch

High risk, high reward.  We in the oil and gas industry have been toughened; have been forced to learn to traverse the risk, and to reap the rewards.  Heck, oil and gas exploration and production is practically as synonymous with the “American Dream” as we can get.  The plentiful rewards that lie at the end of a successful oil and gas venture lead many into an epic journey fueled by palpable ambition and great effort.  We’ve all heard amazing tales tracing the paths of the oil and gas trailblazers, the ones who got lucky, and those who were willing to sacrifice to get there (if not, see “The Prize“).  But every possible path to high reward is guarded by a common vault-door: acceptance of high risk.

Unfortunately, as these stories show us, this risk to reward balance can and has lead many to lying, cheating, dishonesty, half-truths and otherwise misleading conversations, deals and agreements (again, see “The Prize”). However, this is all directly in conflict with the prevailing “unspoken rule” in the oil and gas business: honesty and fair dealing.  Call it what you will, “old boys club,” “gentlemen’s business,” “good ol’ boys,” etc.  The oil and gas industry is undeniably all about the relationships you have built, and the trust and rapport you have developed.

Nevertheless, in helping my clients negotiate and close all sorts of deals and resolve various disputes, I have inevitably ran across several “dirty tricks” and “cheap moves.”  The following is an explanation of some of these dirty or cheap oil and gas negotiation tactics, how to avoid them, and suggestions for responding when the tactics are spotted.
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26Dec

Farmout Agreements: The Basics, Negotiations and Motivations

Farmout Agreements are one of the most widely used agreements in the oil and gas industry.[1]Special thanks to Professor Lowe for his excellent article on this subject, Analyzing Oil and Gas Farmout Agreements, Sw. L.J. 759 (1987). However, there is no largely adopted model form. As such, they vary a great deal. Kanes Forms has provided several Farmout Agreement Forms, but these have not been adopted as an industry standard, and so every farmout agreement approached must be fully analyzed and every term must be understood. This multi-part article will summarize the common ground, and provide a framework for analyzing the various options for certain provisions. Read More »

Footnotes[+]

5Mar

Terminology Behind Federal Leasing

“Common” Oil and Gas Law

As time passes, the “academic minds” have recognized more and more that Oil and Gas Law is not simply a mixture of advanced property law and advanced contract law.  To the contrary, the advent and progression of the energy era as well as continued advancement into non-conventional plays has seen the formation of a robust energy culture, so sophisticated and business savvy that its typical negotiations have become forms, those forms became largely standardized, and has allowed a body of case law to envelope its every detail to the point that a new body of law has emerged: oil and gas law. [1]See Bruce M. Kramer, “Property and Oil and Gas Don’t Mix: The Mangling of Common Law Property Concepts,” 33 Washburn LJ 540 (1993). Read More »

© Copyright 2012-2018, McGinnis Lochridge LLP. All Rights Reserved. DISCLAIMER: The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.
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