Shipowners expect that parties entering into a joint enterprise agreement with one of the AAPL models will be required to carefully consider the extent to which the exkulpations and compensation clauses should apply to the operator of the contract territory. If the parties find that the due clause should apply only to unauthorized claims, the AAPL JOA form model should be modified to clarify the types of claims covered by the exkulpations clause. In addition, non-operators should consider revising the AAPL JOA model form to include additional agreements protecting them from the operator`s contractual failure, even though the language of the exkulpations clause has been revised. The main risk of entering into a joint enterprise agreement occurs when a co-tenant does not fully understand the agreement. An example from the Landman blog provides an example of what can happen if a co-tenant has not performed due diligence before signing. We invented company names to facilitate the prosecution. Since the third-party agreement with GreaseMonkey exists, PetrolAssets is not required to pay a portion of the proceeds from the new well to RevenueBoom. In other words, Burford Perry LLP`s lawyers have cooperated with oil and gas companies, as well as with disputes over mining rights in all kinds of litigation under common enterprise agreements. We have achieved positive results for our clients through arbitrations, court proceedings and comparisons. A recent conceited decision by the Texas Supreme Court, owners of Wood County Energy, LLC, et al., clarified the extent to which non-operators` oil and gas operators can be held liable under the 1989 American Association of Petroleum Landmen (AAPL) and AAPL 1989 JOA agreement.
Common enterprise agreements generally include a discharge provision that eliminates the liability of an operator, without gross negligence or intentional fault of the operator. Because an operator takes the risk of drilling on behalf of its other tenants and does not do so for profit, the discharge provision limits the liability of the operator. However, the Texas and 5th Circuit jurisprudence raises various questions as to whether an excuse clause should apply to the operator`s infringement in addition to its operations at the drilling site.