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Phillips Murrah Directors Discuss Oil and Gas Lease Cancellation Lawsuits at Petroleum Alliance Lunch and Learn

Phillips Murrah presentation to Petroleum Alliance

Directors John M. Bunting and Zac K. Bradt discuss legal actions related to a lease cancellation lawsuit.

Defending Against and Preventing Lease Cancellation Lawsuits

As leasing and drilling activities have increased over the last few years, so have lawsuits by mineral owners seeking to cancel existing oil and gas leases. More often than not, those suits allege that existing wells have ceased producing in paying quantities, and therefore the leases are no longer held by production or “HBP”.

On August 13, Phillips Murrah P.C. hosted a lunch and learn presentation at The Petroleum Alliance of Oklahoma headquarters. Phillips Murrah Directors Zac Bradt and John Bunting discussed the factors courts consider in determining whether a well is producing in quantities sufficient to hold the lease and provided some tips on how to minimize the risk of having the court rule that a lease has terminated for lack of production in paying quantities.

Phillips Murrah presentation to Petroleum Alliance“It is important for oil and gas producers to have an understanding of how courts are interpreting oil and gas lease terms,” said Phillips Murrah Director Liz Brown, who is also a member of the Petroleum Alliance of Oklahoma Board of Directors.

In her introduction statement to the well-attended program, Liz explained that a typical situation ripe for this type of litigation is when a producer has an old lease with a one-eighth royalty and marginal production that is holding acreage in hot areas for oil and gas development such as in the SCOOP or the STACK.

“There have been quite a few recent court decisions exploring what constitutes production in paying quantities,” Liz continued. “I’m glad Zac and John took the time to share their insights with us, so that our members can have a better understanding of what the courts are looking at in making these determinations.”

Some of the other information provided at the recent Lunch and Learn included an explanation of the habendum clause and other lease terms, suggestions as to how a producer can position itself to defend against a lease cancellation lawsuit, and a comparison of how the courts in Texas and Oklahoma interpret production in paying quantities for purposes of determining whether a lease is held by production.

About the presenters:

portrait of Elizabeth K BrownElizabeth K. Brown is a Director whose practice is focused on serving her privately-held business clients at a strategic level as outside general counsel where she assists in managing the many legal issues that arise in running a business, including structuring and negotiating business transactions, managing litigation, settling disputes, assisting with tax planning and designing the estate and succession plan for the family business owners.


Photo of Director Zac K. Bradt

Zac K. Bradt is a Director and an attorney in the Energy & Natural Resources Practice Group. He represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.


Photo of Director John M. Bunting

John M. Bunting is an attorney practicing all facets of commercial litigation and insurance coverage law. His experience includes representing clients in complex commercial disputes; representing energy producers, disposal well operators, and oilfield service companies; representing auto dealers in disputes with manufacturers and competitors; and helping business clients obtain insurance coverage.


Video courtesy of the Petroleum Alliance of Oklahoma

Phillips Murrah Directors to present: Defending (and Preventing) Lease Cancellation Lawsuits

Petroleum Alliance logo

presented by

Phillips Murrah logTuesday, Aug. 13
11:30 a.m. to 1 p.m.
Petroleum Alliance of Oklahoma Headquarters
500 N.E. 4th Street, Oklahoma City

As leasing and drilling increase, so have lawsuits by mineral owners seeking to cancel existing leases. More often than not, those suits allege that existing wells have ceased producing in paying quantities, and therefore the leases are no longer HBP.

Photo of Director Zac K. Bradt

Zac K. Bradt

The presenters of this Lunch & Learn will be Phillips Murrah Directors Zachary K. Bradt and John M. Bunting. They will discuss how operators can defend against lease cancellation lawsuits, including factors that Oklahoma courts consider when determining whether a well is producing in quantities sufficient to hold a lease.

They will also discuss how operators can resolve such disputes outside of court; and how to prevent a lease cancellation suit by determining whether an existing lease is HBP prior to purchasing it.

To register, click HERE.

Presenters:

Photo of Director John M. Bunting

John M. Bunting

Zac K. Bradt is a Director and an attorney in the Energy & Natural Resources Practice Group. He represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

John M. Bunting is an attorney practicing all facets of commercial litigation and insurance coverage law. His experience includes representing clients in complex commercial disputes; representing energy producers, disposal well operators, and oilfield service companies; representing auto dealers in disputes with manufacturers and competitors; and helping business clients obtain insurance coverage.

Phillips Murrah Director Liz Brown elected to Board of Oklahoma’s largest petroleum association

Phillips Murrah would like to congratulate Elizabeth K. Brown, Shareholder/Director and member of the Firm’s Energy and Natural Resources Practice Group, on being elected to the Board of Directors of the newly formed oil and gas industry advocacy organization, The Petroleum Alliance of Oklahoma. Liz formerly was a member of the OIPA Board of Directors until its recent merger into the Alliance.

Liz’s election to the Petroleum Alliance of Oklahoma Board of Directors will allow her to continue her involvement in oil and gas industry matters. She brings to the Board not only her experience in representing oil and gas businesses in legal matters, but also her practical knowledge of oil and gas operations that she has gained through managing The Gloria Corporation, a privately held oil and gas company founded by her father and based in Ada, Oklahoma. Having been raised in the oil business, Liz has been actively involved in every aspect of running a small, independent oil company.

Photo of Liz Brown at Gloria Corporation wellsite

Pictured here are Liz and her brother, Mike Kemp, in the field reworking one of the Gloria Corporation wells in Pontotoc County.

“Running a second-generation, family-owned oil and gas business is both rewarding and challenging” Liz said. “I feel very fortunate to have been able to continue the business my father started years ago.”

Also notably, Liz is one of four women who serve on the 41-member Board. She joins Valerie Mitchell (Corterra Energy Operating, LLC), Geree Wald Morton (Plaster & Wald Consulting Corp.), and Samantha Omey (ExxonMobil Corporation).

“I am honored to have been elected to serve on the Board of Directors of the newly formed Petroleum Alliance of Oklahoma to, among other things, bring attention to issues affecting smaller producers who make up a significant segment of the oil and gas industry,” Liz said.

Liz’s law practice with Phillips Murrah is focused on serving her privately held business clients as outside general counsel where she assists in managing the many legal issues that arise in running a business. Her role often involves structuring, negotiating and handling mergers and acquisitions, managing litigation, settling disputes, assisting with tax planning and designing estate and succession plans for family business owners.

The Petroleum Alliance of Oklahoma was formed in November 2018, when two of the state’s industry groups merged. Oklahoma Independent Petroleum Association and the Oklahoma Oil and Gas Association combined memberships to create a larger, stronger association with the aim to more effectively represent members in legislative and regulatory matters.

The new organization is now the largest trade association representing the oil and natural gas industry in the state, with more than 2,300 individuals from about 1,300 companies – companies that account for more than 90 percent of the state’s oil and natural gas production.