Force majeure provisions: Dusting off a law school exam topic for the COVID-19 pandemic

As the COVID-19 pandemic increasingly causes business disruption across the United States and the world, the issue of force majeure will become increasingly relevant. On a near daily basis, national, state and local governments are implementing stringent containment policies. States of emergency have been declared, schools and institutions of higher education closed, travel restrictions imposed, businesses shuttered, sporting events cancelled, large gatherings banned and worship services cancelled. While the long term effects of the pandemic are yet unknown, it is certain that these containment strategies will present unique challenges as businesses struggle to adapt to the new realities presented by COVID-19, including the ability to comply with various contractual obligations. In evaluating the range of options available to deal with performance under a contract amidst the uncertainty, parties should consider how the concept of force majeure will impact their rights, obligations and remedies. For more, read the full story.

National, Ohio

COVID-19 Resource Center Available

Amid growing concerns about the COVID-19 (coronavirus) outbreak, businesses and employers are forced to respond quickly and accurately to this evolving situation. A cross-disciplinary team of Bricker attorneys is regularly monitoring COVID-19 news and guidance to help our clients assess the potential impacts on their operations. 

If you have questions regarding COVID-19 and it's impact on energy matters or regulatory proceedings in Ohio, or if a situation arises and you need legal counsel, please visit our Resource Center for more information.

 

National, Ohio

Ohio’s natural gas producers shift focus from production to profits

A change is underway for Ohio’s natural gas producers; after focusing on boosting production the past few years, they are now looking at ways to increase profits, the Akron Beacon Journal reports. Jeff Fisher, CEO of Ascent Resources, told attendees at the annual Ohio Oil & Gas Association meeting, “[i]nvestors are demanding that we put growth aside and manage the business with the idea of making profit,” according to the article. Producers have been so successful at boosting production that demand growth “has been phenomenal,” but supply “has been a little more phenomenal,” Fisher said. Matt Hammond, the association’s president, said while he doesn’t expect double-digit production increases to continue, the mood among those at the meeting “remains good.” For more, read the full article.

Ohio

Vendel named Chief of ODNR’s Division of Oil and Gas Resource Management

Eric Vendel, who has served as lead attorney for the Ohio Department of Natural Resources (ODNR)’s Division of Oil and Gas Resource Management since 2012, will become the new chief of that division, according to an ODNR news release. ODNR Director Mary Mertz made the announcement of Vendel’s selection, saying his “extensive legal and administrative experience in oil and gas regulation” make him the “ideal candidate,” according to the release. As lead attorney for the division, Vendel has “drafted and reviewed oil and gas rules and regulations, Chief’s orders, contracts, and compliance agreement,” among other duties. He holds a J.D. from Capital University Law School, a master’s degree in organic chemistry from The Ohio State University, and a bachelor’s degree in chemistry from Wittenberg University. For more, read the full release.

Ohio

Last-quarter Ohio oil production up 17 percent over same quarter previous year

The Ohio Department of Natural Resources (ODNR) announced the state’s horizontal shale wells “produced 6.8 million barrels of oil” during the fourth quarter of last year, an increase of 17 percent over 2018 fourth-quarter totals, CantonRep.com reports. Natural gas production during the same quarter was 685 billion cubic feet, an increase of 3 percent over the same quarter in 2018, according to the article. ODNR reported production from 2,452 wells, which averaged 2,774 barrels of oil, 279 million cubic feet of natural gas and 90 days of production. For more, read the full article.

Ohio

EQT may sell “small portion” of royalties from natural gas production

Pittsburgh-based EQT Corp., the largest independent natural gas producer, “is in talks to have an investor take a 1 percent royalty interest in revenue from natural gas production,” the Pittsburgh Business Times reports. The company’s new management team “has been working to cut drilling costs and improve the company’s financial picture” as the domestic shale industry is experiencing sharp declines, according to the article. EQT said during the third-quarter conference call “it was evaluating ways to monetize its interest in natural gas production.” Then-Interim CFO Kyle Derham said, “[w]e are confident this strategy could generate significant proceeds that can be used to de-lever without a significant impact on development returns.” For more, read the full article.

Pennsylvania

Continued low natural gas prices spark new round of impairments

Several oil and gas companies have been “forced to recalculate and reduce the value of their assets to reflect a down market,” as continued low natural gas prices “have been putting a damper on corporate earnings for many months,” the Pittsburgh Post-Gazette reports. CNX Resources Corp. recently “wrote down $46 million in assets in Central Pennsylvania,” according to the article, following a “blockbuster $10 billion impairment by Chevron Corp. last month, more than half of which was attributed to Appalachian oil and gas assets.” EQT Corp, the largest natural gas producer in the country, “is expected to write down between $1.4 billion and $1.8 billion in assets” next month. The wave of impairments means “some oil and gas leases will be allowed to expire without follow-up and some potential drilling locations are now off the table.” For more, read the full article.

Pennsylvania

Ohio oil production gains outpaced natural gas gains for third quarter of 2019

While oil and natural gas production in Ohio’s shale region saw gains in the third quarter of last year, oil production gains were higher than natural gas on both a percentage and annual basis for that period, according to a recent article in The Daily Reporter. Horizontal wells “produced more than 7.2 million barrels of oil and nearly 673.97 billion cubic feet of natural gas for the quarter compared with more than 5.54 million barrels of oil and 605.71 billion cubic feet of natural gas for the third quarter of 2018,” the article reports. Those numbers “reverse the script” from 2018, “when oil production trailed natural gas on a percentage basis.” Ohio’s shale region has produced “more than 18 million barrels of oil and more than 1.9 million cubic feet of natural gas” in the first three quarters of 2019. For more, read the full article.

Ohio

Ohio’s natural gas and oil production jumped again in third quarter of 2019

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management’s quarterly report released in December showed natural gas and oil production in Ohio “jumped up again” in the third quarter of last year, Farm and Dairy reports. Horizontal wells “produced 673,962,146 Mcf, or 673 billion cubic feet, from the beginning of July to the end of September,” a 9-percent increase over second-quarter production. Third-quarter oil production was up 24 percent. The report listed 2,419 horizontal shale wells in production. For more, read the full article.

Ohio

Utica Shale’s third-quarter production sets new state records

Figures released by the Ohio Department of Natural Resources (ODNR) show Ohio’s horizontal shale wells produced a record 7,200,304 barrels of oil and 673,962,146 Mcf (674 billion cubic feet) of natural gas in the third quarter of 2019, The Daily Jeff reports. These totals, which represent increases of 29.84 percent and 11.27 percent for oil and natural gas production respectively over the same quarter last year, set new state records for quarterly production. The ODNR report lists 2,470 horizontal shale wells, with 2,419 of those reporting production during the quarter. For more, read the full article.

Ohio
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