Tag: attorney

25Apr
The Texas Supreme Court Decides Whether “Subject To” Clause Alters Who Must Bear NPRI Burden

The Latest Shot Fired in the Fixed Versus Floating Royalty Battle

This is a deed interpretation case out ofthe San Antonio Court of Appeals, arisingfrom the 218th Judicial District Court of Karnes County, Texas.

In 1991, the Harrells executed a warranty deed (“1991 Deed”) that conveyed approximately 10 acres of land to the Dragons. The 1991 Deed was subject to prior reservations and it contained the following new reservation by the Harrells:

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13Jan

Texas: Statutory Subordination of Mortgages

Texas House Bill 2207, effective January 1, 2016, statutorily subordinates certain real estate mortgages to oil and gas leases, introducing an interesting tweak to the long-standing and well-established “first in time, first in right” rule. However, this statute is not without its limitations.  For example, it only applies to foreclosure sales for which the foreclosure notice occurs or the judicial foreclosure action commences on or after January 1, 2016.  Additionally, the statute goes on to clarify that, although the lease is to survive the foreclosure, the right to use the surface estate may be terminated and extinguished by the foreclosure to the extent the security interest had priority over the lessee.

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29Dec

Oilfield Bankruptcy and Game Plan

Oil and gas price volatility is as much a part of the energy business as drill bits. Few predicted that the current down-cycle would be as long or as deep as it is proving to be. While global events could turn and prices improve, lower prices seem to be a reality for now. Lower prices impact the finances of everyone in the energy industry. Insolvencies, business failures, and bankruptcies are inevitable in this environment; and when they occur, they affect everyone, at all levels and in all aspects of the industry. Though industry participants can’t change the price of oil, they can protect their interests in other ways. In times like this, fortune favors the prepared.

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28Sep

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

Originally appearing in the Energy Expert Analysis Section of Law360.

law 360 logoLaw360, 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 »

© 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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