Bankruptcy Ruling Deepens Split On Gas Gathering Pacts

Law360 (January 7, 2020, 5:11 PM EST) -- On Dec. 20, 2019, the U.S. Bankruptcy Court for the Southern District of Texas, in Alta Mesa Holdings LP v. Kingfisher Midstream LLC,[1] held that dedications in gathering agreements create covenants that run with the land and that cannot be rejected in bankruptcy, contrary to the holding in In re Sabine Oil & Gas Corp.[2] Although the dispute in Alta Mesa involved Oklahoma law, whereas Sabine involved Texas law, the court stated that the “requirements to form a real property covenant in Texas mirror those in Oklahoma.”

But the Texas court’s decision is in accord with a recent decision by the...

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