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Article on “A Primer On Best Practices In Oil And Gas Bankruptcies — Producers"
In an article published on July 23, 2021 in SHALE Oil & Gas Business Magazine, Jarrod Martin and Tyler Greenwood discuss certain provisions that producers should pay attention to in order to protect their valuable leases.
“Such considerations are a necessary endeavor for any producer,” explain Martin and Greenwood. “Although no energy company is a stranger to the cyclical and tumultuous effects of the oil and gas market, the ever-growing threat of a new ‘Delta’ strain of COVID-19 and the new administration’s revocation of the Keystone XL pipeline permit presents a new frontier of the ever-changing regulatory regime.”
They further discuss whether the COVID-19 and delta variant would be covered under a force majeure provision. “It is rare a lease will specifically reference a type of contagion,” said Martin and Greenwood. “Usually, it will fall under umbrella terms such as “epidemic,” “pandemic,” or “public health crisis,” in which case it will be covered.” These terms may be notably absent in oil and gas leases, as they focus on defining events or acts such as “civil or military acts,” or “government orders or regulations.”
“Keep in mind what performance a force majeure provision actually excuses,” said Martin and Greenwood. “Most leases should specifically detail how the force majeure provision is incorporated.”
To read the article in full, click here.