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- Opportunity: Our client operated a large gas storage field in Western Oklahoma as part of a business engaged in the interstate transmission of natural gas. The field was regulated by the Federal Energy Regulatory Commission. The field was originally developed in the 1970s under agreements that allowed both the right to store gas and the right to develop minerals. The storage field is held by a large number of lease agreements with a large number of land owners. The leases protect the field from incursion by drilling so that gas can be injected into the formation and stored for sale in interstate commerce. Upon expiration of the 20-year primary term of the lease agreements, a number of plaintiffs brought claims alleging that the storage leases had expired because our client had not successfully drilled for oil and gas under the oil and gas lease portion of the agreements. They asked the court to declare that the right to use the storage formation had expired.
- Solution: After completion of discovery and exchange of expert reports, we moved for summary judgment on behalf of our client.
- Result: The U.S. District Court for the Western District of Oklahoma granted summary judgment finding in favor of our client’s interpretation of the gas storage agreements, holding that the storage field remained protected in all formations covered by the original contract.
