On September 21, 2015, the North Dakota Supreme Court issued its opinion in Border Res., LLC v. Irish Oil & Gas, Inc., — N.W.2d —-, 2015 WL 5519421, 2015 ND 238 (N.D. 2015), where it reviewed two primary issues:
(1) whether a field land services company owed a fiduciary duty to an oil and gas company, and whether such duty was breached, when the land services company acquired leases within the “review area” and did not offer those leases to the oil and gas company, and
(2) whether the price to be paid to the land services company for other leases sold by the oil and gas company in a package transaction was the “blended price” of the overall transaction, or an allocated value of the specific leases acquired by the land services company.
This case is likely of interest to in-house and field landmen, as it provides additional guidance as to the nature and scope of the relationship between an oil and gas company and field landmen. Additionally, it provides insight into the extent the AAPL standards of ethics and conduct bind landmen, and the importance of clearly addressing parties’ relationship and payment structure in service agreements.
