Some of our Baton Rouge readers may have seen that the Louisiana Supreme Court has recently issued a favorable ruling for Midstates Petroleum Company. The business litigation surrounding this case resulted from a claim that another oil company, Clovelly Oil Company, made regarding some development interest in property in the Pine Prairie field. This property is presumably the site of future development and exploration for oil. The company is currently operating in central Louisiana, Oklahoma and Kansas.
Business law cases such as these can be very complex and difficult to understand. In this case, Clovelly argued that Midstates was subject to the terms of a Joint Operating Agreement that was apparently entered into in 1972, based on Midstates’ lease of some interests in land in Pine Prairie field. However, the court unanimously ruled that the Joint Operating Agreement would not apply to leases entered into after 1972 and therefore Clovelly could not assert any claim to these leases.
Businesses in Louisiana have many legal needs. It is important to gather as much information as possible prior to drafting purchase agreements, operating agreements and leases. A properly drafted document can save a great deal of money and stress for businesses, as well as helping to avoid future litigation.
If a business owner or operator is faced with the prospect of business litigation, it is important to gather as much information as possible regarding legal options and strategies. Any type of business litigation can have a tremendous impact on the sustainability of a business, and it is essential to act wisely in these situations.
Source: businesswire.com “Midstates Petroleum Announces Favorable Louisiana Supreme Court Ruling Regarding Pine Prairie/Clovelly Litigation“, March 20, 2013