In the Media
Brandon Duke Discusses Texas Safe Harbor Provision with Bloomberg Law
In the Media
Brandon Duke Discusses Texas Safe Harbor Provision with Bloomberg Law
February 13, 2023
Winston & Strawn Of Counsel Brandon Duke discusses the Texas Natural Resources Code’s safe harbor provision with Bloomberg Law.
A case currently in the Texas Supreme Court for the second time is aiming to clarify when and how oil and gas operators can legitimately withhold lease payments while title disputes are resolved. A Texas law allows oil and gas operators to suspend lease payments if they have “reasonable doubt” about whether a “payee” has the right to receive payment related to the sale of the oil and gas. This case arises from a 2011 lawsuit between 1776 Energy Partners and Longview Energy Co., in which Freeport-McMoRan Oil & Gas LLC suspended its payments to 1776 following the lawsuit under the safe harbor provision, saying it cast doubt over the title.
Brandon stated the safe harbor provision was intended to favor operators, but that the Court would likely “stick to the statute as closely as possible” and read safe harbor provision narrowly. While the ruling might help this particular party, because of some unique facts of this case, its overall impact “might be less prominent” than expected, he said.