Assigning gas balancing rights in the absence of a gas balancing agreement
When two or more working interest owners share an undivided interest in a natural gas well, it is not uncommon for production imbalances to occur. Sometimes such imbalances are remedied pursuant to a gas balancing agreement (GBA) entered into by the interest owners. However, if no GBA is entered into, the common law rules of cotenancy and any other agreement between the parties will be used to cure the production imbalance. In [open quotes]Weiser-Brown Oil Co. v. Samson Resources Co.[close quotes], the Court of Appeals for the Eighth Circuit held that, absent a GBA, a co-owner has no contractual right to recoup underproduction, only a right to an accounting as between cotenants, and that this right to an accounting does not run with the land to subsequent cotenants, but is only personal to the cotenant who has underproduced. This note analyzes the [open quotes]Weiser-Brown[close quotes] decision by first addressing the common law of cotenancy and how the common law is affected by the existence of an operating agreement. The conclusion reached is that, under an operating agreement, the right to make up an underproduction, even absent a GBA, is an assignable contract right, and that this right runs with the land to inure to subsequent grantees of the original part to the operating agreement.
- OSTI ID:
- 5526992
- Journal Information:
- Energy Law Journal; (United States), Vol. 14:2; ISSN 0270-9163
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
POLICY AND ECONOMY
03 NATURAL GAS
99 GENERAL AND MISCELLANEOUS//MATHEMATICS, COMPUTING, AND INFORMATION SCIENCE
NATURAL GAS
DISPUTE SETTLEMENTS
PRODUCTION
PUBLIC LAW
NATURAL GAS WELLS
OWNERSHIP
ACCOUNTING
AGREEMENTS
CASE LAW
CONTRACTS
LEGAL ASPECTS
LIABILITIES
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
LAWS
WELLS
294003* - Energy Planning & Policy- Natural Gas
031000 - Natural Gas- Legislation & Regulations
990400 - Law