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Sullivan Mountjoy, PSC

SM Legal

Oil And Gas Law And Litigation

Oil And Gas Law
And Litigation

If you are just getting started in the oil and gas business, we can help you with leasing issues, regulatory issues associated with becoming an operator of oil and gas wells, as well as real estate and title work. We are well-versed in complex areas, including how to address unknown or missing mineral owners.

Acquisitions

If you are acquiring oil and gas leases, our attorneys have experience in all phases of acquisition, from letters of intent and purchase and sale agreements, to assisting with due diligence, including title investigations and curative work, regulatory evaluation and assistance, and document preparation and closings. Our firm has coordinated several multi-million dollar acquisitions and sales of oil and gas properties.

Operations

Our attorneys can assist you with many aspects of oil and gas operations. Issues can arise with respect to permitting and related administrative issues. We can guide you through the administrative hearing processes and help to ensure your project is on the proper regulatory footing.

Landowner disputes are very common, especially when severed minerals are involved. Our attorneys have experience in handling landowner issues in the preliminary permitting phase as well as negotiating oil and gas rights and property damage claims. We have experience in many highly-specialized areas associated with production from shales and tight formations, including horizontal well permitting, pooling and unitization, strat tests and fracking.

We are also experienced in environmental aspects of oil and gas laws, including initial compliance assistance with the cornucopia of different environmental laws, including those pertaining to air, water and waste, as well as endangered species. Our representation has included assisting operators subject to civil and administrative enforcement for alleged violations. We also have unique and broad experience assisting operators with TENORM and NORM.

Oil and Gas Litigation

Our firm has a long history of involvement in litigation relating to oil and gas rights and related issues. In 2006, the firm successfully served as lead counsel in the first Kentucky decision involving ownership of Coalbed Methane. This firm also has extensive experience in litigation involving ownership rights, surface owner disputes, lease termination, many other oil and gas issues.

Wrapping Things Up

When the time comes to divest oil and gas holdings, Sullivan Mountjoy, PSC can guide you through that process as well. Whether the plan is to sell leases, or to plug and abandon existing production, firm attorneys will provide assistance regarding the legal and regulatory steps that are necessary to minimize liability with respect to past operations.

Frequently Asked Questions

I’ve finished a construction project—how do I get paid?

If the owner of a project on which you’ve worked refuses to pay you, you may have several options. First, you can assert a mechanic’s lien against the premises, which will make it difficult for the owner to sell or finance the property. Mechanic’s liens are discussed below. There are strict timelines that must be followed to assert such a lien, so a builder should act promptly if payment is an issue.

Second, you can file a lawsuit for breach of contract, asking the court to order payment. Third, if the withheld payment constitutes retainage, it is possible that the owner has wrongfully withheld too much retainage in violation of the Kentucky Fairness in Construction Act. We have recovered funds due to our clients in just such situations and can assist you as well.

Do I need to have all the mineral owners in a given tract under lease in order to drill an oil or gas well?

If there are several mineral owners in a given tract, it is not necessary to have them all under lease prior to drilling a well. If unknown or unlocatable interests are a problem, you can take actions before administrative bodies or in court to protect your interests prior to incurring the risk and cost of drilling a well.

What types of Permits will I need to operate an oil and gas lease?

Depending on the types of activities and operations to be performed, numerous permits may be required. Kentucky has three agencies with primary responsibility for oil and gas operations – the Division of Oil and Gas, the Division of Water, and the Division of Waste Management, all of which have permitting programs for specific areas, including oil and gas well permits, water discharge permits, waste disposal permits, stream crossing permits, floodplain construction permits and others. And in certain circumstances, permits from the Department of Transportation, local governments, or other regulatory authorities are required.

What do I need to consider when buying an oil and gas lease?

The due diligence process for buying existing oil and gas production should address several issues, including the past production on the lease, whether secondary recovery has taken place, the existence and condition of surface facilities and equipment, the permitting status of wells, water and waste management facilities, the existence of operating agreements and other working interest owners, and title issues. Our firm has extensive experience in assisting clients through this process.

Our Team

Representative Clients

  • Countrymark Energy Resources, LLC
  • Chesapeake Appalachia, LLC
  • Ashland Inc.