Justia Energy, Oil & Gas Law Opinion Summaries

In a bankruptcy adversary proceeding, Capco brought claims of fraud and various business torts against Ryder, Tana, TRT, and Tristone. The claims arose out of a transaction in which Capco purchased from Tana certain oil and gas reserves located in the Gulf of Mexico (the Properties). The bankruptcy court granted summary judgment in favor of Ryder, Tana, TRT, and Tristone and dismissed the claims. The court held that Capco failed to present evidence to demonstrate a genuine issue of material fact about whether Ryder was contracted to provide an independent reevaluation of the Properties and advice at the meeting regarding Capco's decision to close on the Properties. The court also held that because the purchase and sale agreement contained a clear intent to disclaim reliance, the lower courts correctly held that Capco was unable to claim fraudulent inducement based on the prior representations of Tana, TRT, and Tristone. Accordingly, the judgment was affirmed. View "Amco Energy, Inc., et al. v. Tana Exploration Co., et al." on Justia Law

Plaintiff sued Shell for breach of contract, unjust enrichment, and fraud, based on claims that Shell underpaid royalty due under a mineral lease to plaintiff's grandmother. At issue was whether limitations barred a royalty owner's claims against the operator of the field. The court held that the fraudulent concealment doctrine did not apply to extend limitations as a matter of law when the royalty underpayments could have been discovered from readily accessible and publicly available information before the limitations period expired. When, as in this case, the information was publicly available and readily accessible to the royalty owner during the applicable time period, a royalty owner who failed to take action did not use reasonable diligence as a matter of law. Accordingly, because the parties did not dispute that the pertinent information was readily accessible and publicly available, plaintiff's claims were time-barred as a matter of law. View "Shell Oil Co., et al. v. Ross" on Justia Law

Independence County and the City of Clarksville entered into a power purchase and sale agreement that included an arbitration provision. After the City informed the County that it was going to terminate the agreement, the County filed a motion to compel arbitration. The circuit court denied the motion, ruling that the arbitration agreement was unenforceable because (1) the City validly exercised its right to terminate the agreement, and without the revocation of the entire agreement, the City was released from the obligation to arbitrate; and (2) the arbitration agreement lacked mutuality of obligation. The Supreme Court affirmed, holding that the circuit court did not err in ruling that the arbitration agreement was unenforceable due to the absence of mutuality of obligation, and the arbitration agreement was void on that basis. View "Independence County v. City of Clarksville" on Justia Law

El Paso operated an interstate pipeline that transported natural gas to California and other western states, and Freeport shipped gas on El Paso's pipeline to power its various mining, smelting, and refining facilities. El Paso and Freeport separately challenged several orders of the Commission issued in connection with El Paso's 2005 rate filing and subsequent settlement. The court denied the petition for review and held that the Commission's reasoning was sound when it found that the CAP Orders had neither changed the bargain underlying the 1996 Settlement nor abrogated Article 11.2 of the Settlement. The court also held that the Commission reasonably determined the converted FR contracts were "amended" within the meaning of that term in Article 11.2; Article 11.2 applied to turnback capacity; the applicable rate cap for turnback capacity was determined by the shipper's delivery point; Article 11.2 did not apply to capacity created by the Line 2000 project; and where the Commission adopted the presumption that the capacity of El Paso's system on December 31, 1995 was 4000 MMcf/d. The court further found that the Commission's approval of the Settlement appropriate under the so-called Trailblazer Pipeline Co. approach. Accordingly, the Commission's orders were not arbitrary or capricious and the petitions for review were denied. View "Freeport-McMoran Corp. v. FERC" on Justia Law

In this consolidated appeal, three sets of landowners asserted claims against Arrington for breach of contract, promissory estoppel, and unjust enrichment relating to Arrington's failure to pay cash bonuses under oil and gas leases. The district court granted summary judgment to the landowners on the breach of contract claims and thereafter dismissed the landowners' other claims with prejudice on the landowners' motions. The court rejected the landowners' assertion that the lease agreements could be construed without considering the language of the bank drafts; the drafts' no-liability clause did not prevent enforcement of the lease agreements; Arrington entered into a binding contract with each respective landowner despite the drafts' no-liability clause; the lease approval language of the drafts was satisfied by Arrington's acceptance of the lease agreements in exchange for the signed bank drafts and as such, did not bar enforcement of the contracts; Arrington's admitted renunciation of the lease agreement for reasons unrelated to title precluded its defense to the enforceability of its contracts; Arrington's admission that it decided to dishonor all lease agreements in Phillips County for unrelated business reasons entitled the landowners to summary judgment; there was no genuine issue of material fact as to whether Arrington disapproved of the landowner's titles in good faith. Accordingly, the district court did not err in granting summary judgment on the breach of contract claims. View "Smith, et al. v. David H. Arrington Oil & Gas, Inc.; Foster, Jr., et al. v. Arrington Oil & Gas, Inc.; Hall, et al. v. Arrington Oil & Gas, Inc." on Justia Law

JB Mineral Services, LLC (JB), appealed the grant of summary judgment declaring an oil and gas lease terminated and awarding statutory damages, costs, and attorney fees to Dahn P. Beaudoin and J. Willard Beaudoin, as trustees of the William Beaudoin Irrevocable Mineral Trust (Beaudoins). JB sought to lease the Beaudoins' oil and gas interests, and sent a lease, a supplemental agreement and a document it alleged was a "120-say sight draft" for $165,000. Later, JB sent a revised lease and a 25-day sight draft to Beaudoins, reflecting JB's claim that Beaudoins owned 3.68 fewer mineral acres than covered in the original lease. The revised lease would also have extended the term of the lease approximately six months longer than a July 2009 lease. Beaudoins never executed or agreed to the revised lease and did not present the second sight draft for payment. Beaudoins claim that the "termination date" under the supplemental agreement was January 12, 2010, which was 120 business days after they signed the lease and supplemental agreement in July, 2009. JB's position was that it had until January 20, 2010, to pay a supplemental bonus payment by funding the July 2009 sight draft. Beaudoins' counsel responded by faxed letter dated January 20, 2010, reiterating that the lease had already terminated and was invalid. JB never authorized payment of the July 2009 sight draft, but recorded the original July 2009 lease on January 20, 2010. Beaudoins sued JB to have the lease declared invalid and for statutory damages, costs, and attorney fees. Upon review, the Supreme Court affirmed summary judgment in favor of the Beaudoins, finding the district court did not err in concluding JB failed to timely pay or tender the sum required to continue the 2009 lease and that the lease automatically terminated by its express terms. View "Beaudoin v. JB Mineral Services" on Justia Law

This action involved a challenge to the decision by a purchaser to terminate a share purchase agreement and related consulting services agreement based on the purchaser's contention that certain conditions precedent to closing those agreements had not been met by the seller. Purchaser brought an action for declaratory judgment and injunctive relief, seeking a determination that it properly terminated the share purchase and consulting services agreements and was entitled to the return of its down payment on the purchase price from escrow. The court found that the agreements between the parties unambiguously provided that the Development Fees were contingent on the commencement of actual development of the projects and that the purchaser was under no obligation to develop the projects. Therefore, the court granted purchaser's motion for partial summary judgment on that issue and held that seller was not entitled to any Development Fees as a result of purchaser's decision to terminate the transaction. View "Invenergy Solar Dev. LLC v. Gonergy Caribbean Sarl, et al." on Justia Law

Plaintiffs are producers of coal bed methane gas; defendant is large coal-mining company. Gas extraction firms need access to coal from which to extract gas and coal companies need to have gas removed from their mines before mining. To form an alliance for that purpose, plaintiff began by acquiring options to buy coal-mining rights; it planned to sell the options in exchange for the right to extract gas from its partner's coal. The parties signed memorandum of understanding, which stated that it did not constitute a binding agreement, and, later, a non-binding letter of intent. Plaintiff began transferring coal rights to defendant as contemplated by the letter of intent, but defendant delayed reciprocating. Ultimately defendant announced that it was terminating the letter of intent. The trial court entered summary judgment for defendant on a fraud claim. The Seventh Circuit affirmed, stating that "when a document says it isn't a contract, it isn't a contract" and that plaintiff did not establish promissory fraud or justifiable reliance.View "BPI Energy Holdings, Inc. v. IEC (Montgomery), LLC" on Justia Law

Plaintiff brought suit seeking declaratory judgment and asserted claims for breach of contract and bad faith when its insurers asserted that certain sublimits in plaintiff's policy capped reimbursement for damages caused by flood and that those sublimits applied to both property damage and business interruption losses. Plaintiff claimed that the sublimits only applied to property damage. The court concluded that there was no factual dispute regarding whether an insurance brokerage employee shared the same understanding as the underwriters and whether that understanding bound plaintiff. Consequently, the interpretation of the contract did not depend "on the credibility of extrinsic evidence or on a choice among reasonable inferences that can be drawn from the extrinsic evidence," and thus the district court did not err when it granted insurers' judgment as a matter of law on the declaratory judgment and breach of contract claims. View "Penford Corp., et al. v. Natl. Union Fire Ins. Co., et al." on Justia Law

In 1999, Christopher Sullivan learned through a business acquaintance, Robert Weaver, acquired all interests in a particular oil and gas lease. The then-current operators of the wells on the lease, QEP Energy, made regular payments to Mr. Sullivan for several years. In early 2006 QEP determined that the total payments to Mr. Sullivan by all operators on the lease exceeded his interest in the leases. QEP therefore ceased further payments and sought reimbursement of the overpayment from Mr. Sullivan. He disputed the claim, asserting that QEP owed him additional payments. QEP brought this action in Utah state court, seeking a declaration of the amounts due Mr. Sullivan. It also sought recovery from Mr. Sullivan for the alleged overpayment. Both parties filed motions for partial summary judgment on their claims for declaratory relief. The district court held that the terms of Mr. Sullivan's interest (from when he acquired the original interest in the lease) unambiguously described he should have only received a three percent production-payment. The court granted partial summary judgment in favor of QEP, and dismissed Mr. Sullivan's claims with prejudice. Mr. Sullivan appealed. Upon review, the Tenth Circuit agreed with the district court's analysis of the leases in question and affirmed its decision in favor of QEP. View "QEP Energy Company v. Sullivan" on Justia Law