Joint Operating Agreements: Assignment; Liability of Assignor

摘要

In 1994, Eland purchases a fractional share of the working interest in two OCS leases that are subject to two joint operating agreements. Seagull is the operator under the terms of the JOAs. In 1996, Eland sells its interests to Nor-Tex through an auction sale. Under the terms of the assignment, Nor-Tex assumed the obligations created by the JOAs. Nor-Tex fails to pay its working interest owner share of the costs of operating the wells. Seagull then sues both Eland and Nor-Tex for the unpaid invoices. Nor-Tex eventually files a Chapter 7 bankruptcy petition. The trial court finds that Eland is responsible for debts incurred by its assignee after the assignment. The Court of Appeals reverses and finds that under the unambiguous language of the JOAs, there is no contractual obligation to pay working interest invoices after the assignment.