LEGAL ISSUES PERMIAN INVESTORS SHOULD KNOW

摘要

Five years have passed since commodity prices cratered and the energy industry faced an onslaught of producer bankruptcies.For almost as long,producers and midstream companies have squared off over whether dedications in gathering and processing agreements are real property interests-and therefore immune from the reach of the bankruptcy court-or executory contracts that may be shed by a debtor through the restructuring process.The Permian Basin continues to be an attractive investment opportunity,thanks in no small part to its vast reserves of stacked,oil-bearing formations located within Texas-a state that has traditionally been pro-business and pro-development.Texas has also developed a body of statutory,regulatory and court-made oil and gas law giving investors and operators the certainty necessary to understand and account for the legal risks associated with oil and gas development.However,even in the Permian Basin,oil and gas development has always been a risky venture,and that is as true today as it was during the heyday of conventional development,if not more so.Permian Basin development poses certain legal risks that nonoperating investors in particular should be aware of.