Midstream Agreements Can Still 'Run With The Land'

Law360 (October 18, 2019, 4:52 PM EDT) -- In an order issued on Sept. 30, the United States Bankruptcy Court for the District of Colorado, construing Utah law, held that a gas gathering and processing agreement and a salt water disposal agreement each constituted "covenants that run with the land," and could not be extinguished through a Section 363 bankruptcy sale.[1]

In the order, the bankruptcy court expressly distinguished the recent In re Sabine Oil & Gas Corp. decision[2] that sent shockwaves through the upstream and midstream segments of the oil and gas industry.

As the first reported decision to test Sabine, this order provides upstream and midstream companies,...

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