Oil and Gas
Through the years, oil and gas representation has been a large part of the firms practice. Oil and gas is a unique area of representation because of the large economic impact it has on the economy and also because of its volatile nature.
Oil and Gas Leases
For the past ten years a larger percentage of our legal practice involved oil and gas lease negotiation and representation. This involved negotiating the highest lease bonus amount we could derive for our clients, along with the most favorable lease terms. However, since the down turn of the oil and gas economy in 2015, the number of leases has dramatically declined.
We still see oil companies seeking oil and gas leases either to explore new areas or consolidate their holdings. It is absolutely imperative for a mineral owner to obtain the most favorable lease terms and, of course, the highest lease bonus.
Oil and Gas Lease Cancellations
In the present oil and gas economy, one of the areas that we believe has the most potential impact for our clients is to work towards cancelling old oil and gas leases. Many of the existing oil and gas leases dating from the 1960s, 1950s, and even the 1940s are held by production that is not economically feasible; however, the oil companies continue to maintain these leases for speculative purposes. With the present downturn, we believe it is an appropriate time to work towards cancelling these leases.
It is important to note that during good economic times, the termination of these leases are time consuming and can be expensive because of their economic impact. While they are still time consuming, because there is less value at stake in the present time, it has been our experience that they are less expensive to litigate.
As you may be aware, there have been numerous oil companies that have filed for reorganizational bankruptcy. From a mineral owner's perspective, the general consensus is that the state bankruptcy law protects the mineral owner and consequently it is not necessary to file a creditor claim. However, it is our cautious belief to take the additional step of filing a claim. While it may ultimately prove to be unnecessary, we believe in being cautious and taking every step possible to protect our client's interests.