walnelawfirm

  • Energy Transactions and Operations

    Our energy clients come from all across Texas and around the world. Our services are engaged when they buy into or exit from domestic oil or gas operations or the occasional international concession. As their counsel, we are here to help identify the potential risks involved with the purchase or sale and assist them in reaching their goals. Our lawyers have decades of experience representing operators and investors in negotiating and preparing leases, conveyance instruments, operating agreements and other contracts relating to the acquisition and disposition of oil and gas properties. And we understand the challenges they face on a business level—we have been in their shoes.

    With our comprehensive business and legal experience, we provide guidance at every stage of a trade. We negotiate and draft the necessary documents and perform the due diligence review of the assets being purchased. We understand that, to be a viable acquisition, any producing property must have certain characteristics. Our lawyers evaluate everything, including regulatory compliance, liens and encumbrances, consent requirements, preferential rights and breaches or failures of conditions affecting the overall status of title to or ownership of the real or personal property at issue, and engineering reports, economic projections and other financial information affecting the revenue stream being purchased. But no deal is perfect, and we help our clients discern whether imperfections can be overcome or compel withdrawing from the trade.

    Our attorneys have negotiated, documented and closed a variety of energy transactions including:

    • Purchase and Sale Agreements
    • Farmout agreements
    • Assignments of Net Profit Interests
    • Joint Operating Agreements
    • Participation agreements
    • Area of Mutual Interest agreements
    • Oil and gas leases
    • Pooling and unitization agreements
    • Saltwater Disposal Agreements

     

    Representative Experience

    • Multi-state producing property acquisition by an insurance company affiliate
    • Multi-state producing property acquisition by an insurance company affiliate
    • Purchase of working interest in a large-tract horizontal well drilling program by a substantial international exploration and production company
    • Multi-state producing property acquisition by an insurance company affiliate
    • Purchase of operated working interests by an affiliate of a Sweden-based company
    • Counsel to the purchasers in numerous oil and gas lease acquisitions
    • Grants of oil and gas leases, seismic permits and surface use agreements by substantial mineral interest owners
    • Saltwater disposal agreement creating a third-party connection to the operator’s disposal facility
    • Assisting a working interest owner’s effort to prevent a non-paying co-participant from riding a well down under a light non-consent penalty, which otherwise would have prevented the drilling of the well (confirmed by the Texas Supreme Court in the litigation that ensued)
  • Energy Finance

    Our firm represents several regional banks in all aspects of their reserve-based oil and gas loan facilities, from negotiations and due diligence examinations to drafting and preparation of loan documents. Our lawyers provide services and produce instruments of the quality our clients expect from midsize and large law firms, and because we are small, we do so at a much lower cost to the banks’ customers.

    We know the unique risks associated with oil and gas collateral. Our clients must make certain unavoidable assumptions when analyzing the reservoir engineer’s report and ultimately determining the present worth of and potential future revenues from any oil and gas property securing their loans. Our lawyers carefully evaluate conveyance instruments, regulatory filings, historical revenue receipts and other information to ensure that our clients’ interests are protected by adequately valued and unencumbered collateral.

    This experience benefits our borrower-clients as well. Because we understand the lender’s needs, we help borrowers navigate the lending process as efficiently as possible, providing guidance as to any records, books, reports or other information that must be produced before closing.

    Representative Experience:

    • Representation of the lender in a $20 million revolving line of credit facility secured by numerous properties in multiple jurisdictions
    • Representation of the lender in a $15.6 million revolving line of credit facility for a small Houston based independent
    • Representation of the lender in a $15 million revolving line of credit facility secured by shallow offshore properties
    • Representation of the US subsidiary of a foreign exploration and production company in connection with a $100 million limited recourse financing by an international banking institution
    • Representation of a domestic independent exploration and production company in connection with a $20 million senior secured credit facility provided by a foreign banking institution
    • Representation of an exploration and production company engaged in a corporate refinancing in connection with the title due diligence component of the transaction
  • Regulatory Compliance and Corporate Governance

    Participants in oil and gas operations are responsible for the compliance of their properties with state and federal regulations. At the state level, there are filing, reporting and bonding requirements that must be approved by the state regulatory authority at every stage of a property’s development. Depending on the number of wells drilled, the type of production involved, the number of times the property is conveyed, the existence of disputes among participants and many other facts, these regulatory requirements can be cumbersome. We regularly counsel clients with respect to these matters to ensure their oil and gas properties are managed properly.

    Our corporate clients must comply with certain statutory requirements relating to business organizations in general. A significant part of our representation involves forming, registering and ensuring that our clients operate their businesses in accordance with applicable laws.

  • Mineral Owners

    Our lawyers have negotiated and drafted hundreds of oil and gas leases for mineral owners over the years. We have prepared everything from very simple leases of small interests or small tracts to comprehensive, more sophisticated leases appropriate for large tracts and large interests, often focusing as much on the protection of the surface as the development of the minerals. We understand the concerns of our landowner clients, and we take pride in protecting and maximizing the value of their interests while negotiating and drafting leases that are fair and beneficial to all parties involved.

    Much of our work in this area also stems from unusual but important issues arising after the lease is granted, facilities are constructed and pipelines are laid. We have counseled clients on issues relating to the termination of easements and leases, the rights of a mineral owner under a pooling agreement, mineral trusts and the duties of the trustee, environmental matters and surface damage.