Understanding Adverse Possession: Part One
Adverse possession is a doctrine under which a person in possession of land owned by another party may acquire valid title as long as certain statutory requirements are met. In other words, an adverse party may obtain title to property they do not own if they possess it long enough under certain conditions. This doctrine... Read More
Production in Paying Quantities in Texas
The price of oil crashed and remained depressed through the first half of 2020. Operators were foreseeable victims of this price action, but lessors were also affected, and many experienced a reduction in royalties received from production. Lessors distressed by lower payments may seek to cancel a lease by claiming that the lessee has failed to produce in paying quantities and maintain the lease past its primary term. In this context, it is especially important... Read More
Shut-In Provisions: Maintaining Leasehold in a Low-Price Environment
The language of a shut-in royalty clause in an oil and gas lease is a “creature of contract” that determines when and how a lessee may shut-in a well during depressed market conditions. If a well on leased or pooled land is capable of producing in paying quantities (1), but is unable to do so due to lack of market, a... Read More
Texas’ First Purchaser Statute Only Has Teeth in Texas
This year, global oil markets experienced a significant surplus of supply over demand for oil, near-record domestic production and a global demand shock brought forth by the coronavirus containment measures. The imbalance between a surplus supply of oil and a historic destruction in demand for oil during the beginning of the year caused the price of WTI crude oil to drop to an historic low of –$37.63 per barrel on April 20, 2020. Producers, especially those in the U.S., reacted... Read More
Inactive Wells: Will You Be Left Holding the Bag?
Non-operators may be left holding the bag when it comes to inactive wells. In some cases where an operator files for bankruptcy, Texas law states that non-operators may be responsible for plugging an inactive well. Failure to comply with this mandate carries a litany of consequences from the Texas Railroad Commission (RRC). Inactive and abandoned wells are governed by Texas Natural Resources Code, Title 16, Part 1, Chapter 3 of the Texas Administrative Code and overseen and enforced by the RRC. The... Read More
Save American Vital Energy Jobs Act
On June 23, 2020, United States Senator for Texas, John Cornyn, introduced the SAVE Jobs Act, to assist the American energy sector in retaining jobs during the challenging economic times that have followed the shutdowns caused by COVID-19. Save American Vital Energy Jobs Act, S. 4041, 116th Cong. (2019-2020). The bill aims to provide administrative clarity and short-term regulatory relief to the American energy sector in a time of economic... Read More
Families First Coronavirus Response Act: Paid Sick Leave
One of the Federal Government’s responses to the COVID-19 Pandemic was the Families First Coronavirus Response Act (FFCRA). The FFCRA is a response to the growing need to support families with wage earners who have been affected by the virus, whether directly or through their responsibility for a family member or child affected by COVID-19. The FFCRA requires certain public employers as well as private employers with fewer than 500 employees to extend paid sick leave or expanded family... Read More
Bankruptcy Protection Tailored for Small Businesses
The Small Business Reorganization Act of 2019 (SBRA), effective as of February 19, 2020, was enacted to provide Main Street business debtors with a more streamlined path for restructuring their debts. In response to the economic distress caused by the COVID-19 coronavirus pandemic, the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act; P.L. 116-136)... Read More
Overtime Payments & the Fluctuating Workweek
In the COVID-19 era it is more important than ever for employers to understand the workplace and the rules and guidelines that govern it. Employees are working a varied number of hours from week-to-week, and in some cases, workweek hours are based on immediate demand. A recent regulatory decision from the Department of Labor highlights a rule, newly named the Fluctuating Workweek Method of Computing Overtime, that may benefit employers dealing with these circumstances by offering savings on employee overtime payments. Fluctuating Workweek Method of Computing Overtime,... Read More
Royalty and Suspension Relief in Response to COVID-19
On April 21, 2020, the U.S. Bureau of Land Management (BLM) issued interim guidance providing for federal lease royalty reductions and suspensions in response to the COVID-19 pandemic. The initial guidance provided procedures whereby operators could apply for royalty rate reductions and suspension of operations or production due to force majeure in accordance with Section... Read More