Master Service Agreements for Oil and Gas: Key Provisions, Court Treatment

Similar documents
Allocating Risk in Real Estate Leases: Contractual Indemnities, Additional Insured Endorsements and Waivers of Subrogation

Completion Guaranties in Construction Lending: Key Provisions for Lenders and Guarantors

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Construction OCIP/CCIP Insurance Programs: Potential Coverage Gaps and Other Coverage Pitfalls

Exercising Setoff and Recoupment Rights in Bankruptcy

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Brian E. Hammell, Esq., Sullivan & Worcester, Boston

Universal Health Services v. Escobar: Avoiding Implied Certification Liability Under FCA

Survivor Benefit Plans and Military Divorce: Defending Against or Claiming Former-Spouse SBP Coverage

Commercial Lease Negotiations: Property and Liability Insurance, Proof of Coverage, AI and Loss Payee Issues

Property Management and Leasing Agreements: Key Provisions for Multi-Family, Office, Retail and Industrial Properties

QDRO Drafting Boot Camp: Preparing QDROs for 401(k)s and Similar Defined Contribution Plans

Clearing Title for Defects Due to Mortgage-Related Issues, Legal Description Errors, and Foreclosure

Allocating Operating Expenses in Commercial Real Estate Leases: Negotiating Strategies for Landlords and Tenants

IP Agreements: Structuring Indemnification and Limitation of Liability Provisions to Allocate Infringement Risk

ERISA Retirement Plan Investment Management Agreements: Guidance for Plan Sponsors to Minimize Risks

for Landlords and Tenants Negotiating Insurance, Indemnity and Mutual Waiver of Subrogation Provisions

Zombie Corporations and CERCLA Liability: Identifying, Reviving and Pursuing Zombie PRPs

IP Agreements: Structuring Indemnification and Limitation of Liability Provisions to Allocate Infringement Risk

Construction Builder's Risk and CGL Insurance: Scope of Coverage, Covered Losses, Exclusions, AI Endorsements

Structuring Equity Compensation for Partnerships and LLCs Navigating Capital and Profits Interests Plus Section 409A and Tax Consequences

M&A Indemnification Deal Terms: 2017 Survey Results

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Scott D. Brooks, Partner, Cox Castle & Nicholson, San Francisco

Structuring Equity Compensation for Partnerships and LLCs Navigating Capital and Profits Interests Plus Section 409A and Tax Consequences

Opinion Letters in Commercial Real Estate Best Practices to Minimize Risk When Crafting Third Party Opinions on Loans and Acquisitions

Trucking and Auto Injury Cases: Deposing Accident Reconstruction and Biomechanical Experts

UCC Article 9 Blanket Asset Lien Exclusions and Purchase Money Security Interests

M&A Buyer Protection Beyond Indemnification and Escrows

New Section 199A: Structuring Real Estate Transactions to Take Advantage of the Qualified Business Income Deduction

Uninsured and Underinsured Motorist Claims: Leveraging Insurance Stacking

Drafting Shareholder Agreements for Private Equity M&A Deals

Insurance Coverage for Statutory and Liquidated Damages and Attorney Fees: Policyholder and Insurer Perspectives

Personal Injury Claims for Uber and Lyft Accidents: Navigating Complex Liability and Insurance Coverage Issues

Using Inverted Leases to Finance Renewable Energy Projects

Minority Investors in LLCs: Contractual Limitations, Waivers of Fiduciary Duties, Other Key Provisions

Interest Rate Hedges in Real Estate Finance: Placing Swaps, Caps, and Collars on Floating Rate Loans

Creatively Completing The Capital Stack: Real Estate GP Private Equity Funds

Horizontal vs. Vertical Exhaustion of Insurance: Priority of Coverage and Settlement for Less Than Policy Limits

Protecting Business Assets From Creditors in Litigation: Strategic Choice of Entities, Avoiding Fraudulent Transfers

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Investment Adviser Advertising Rule: New SEC Guidance and Best Practices for Compliance

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Auto Injury Claim Recovery: Maximizing Pain and Suffering, Loss of Future Earning Capacity Damages

Fraudulent Conveyance Exposure for Intercorporate Guaranties, Integrated Transactions and Designated-Use Loans

Drafting Asset Purchase Agreements: Reps, Warranties, Covenants, Conditions, Indemnity and Other Key Provisions

Scott J. Bakal, Partner, Neal Gerber & Eisenberg, Chicago Robert C. Stevenson, Attorney, Skadden Arps Slate Meagher & Flom, Washington, D.C.

Resolving Medicare and Medicaid Liens in Personal Injury Cases Negotiating Healthcare Liens or Claims for Reimbursement, Maximizing Settlement Awards

ERISA Pre-Approved and Customized Benefit Plans: Overhauled IRS Procedures and Determination Letter Process

James P. Bobotek, Partner, Pillsbury Winthrop Shaw Pittman, Washington, D.C.

ERISA Compliance and Monitoring 401(k) Investments: Safe Harbor Rules and Appointing Advisers

Builder's Risk Insurance for Construction Projects: Legal Issues Evaluating Scope of Coverage and Resolving Coverage Disputes

Tax Challenges for NPO Counsel: Excess Benefit Transactions for Executive Comp and Other Financial Dealings

Allocating Risk in Real Estate Leases: Contractual Indemnities, Additional Insured Endorsements and Waivers of Subrogation

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Construction Subcontractor Default Insurance: A Viable Alternative to Performance Bonds?

UCC Article 9 Blanket Asset Lien Exclusions and Purchase Money Security Interests

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Bankruptcy Section 506(c) Surcharge on Secured Collateral

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Builder's Risk Coverage for Construction Defects and Accidents Caused by Defective Workmanship

Asset Sale vs. Stock Sale: Tax Considerations, Advanced Drafting and Structuring Techniques for Tax Counsel

Distressed Loan Workouts: How Equity Cure Rights Work, Negotiating Loan Restructuring and Forbearance Agreements

Springing the Delaware Tax Trap: Drafting Limited Powers of Appointment to Increase Asset Income Tax Basis

401(k) Plan Nondiscrimination Testing: Guidance for Employee Benefits Counsel

Structuring Credit Facilities for Private Equity Funds: Subscription, NAV and Hybrid Loans

High Volatility Commercial Real Estate Loans: Guidance for Developers and Lenders on HVCRE Rules and Loan Covenants

Severance Plans and ERISA Compliance: Limiting Liability in Design and Implementation of Severance Arrangements

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

ERISA Considerations in Structuring Credit Facilities with Private Investment Funds

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Corporate Governance of Subsidiaries: Board Roles and Responsibilities, Interplay With Parent Board, Liability Risks

Estate Planning and Tax Reform: Wealth Transfer Structures Under the New Tax Law

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: James O. Lang, Shareholder, Greenberg Traurig, Tampa, Fla.

Using Partnership Flips to Finance Renewable Energy Projects: Evaluating Tax Risks, Navigating IRS Safe Harbors

UCC Article 9 Update: Searching and Filing Under New Amendments

Foreign Investment in U.S. Real Estate: Impact of Tax Reform

Private Investment Funds and Tax Reform

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Matthew B. Grunert, Partner, Andrews Kurth Kenyon, Houston

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Dean C. Berry, Partner, Cadwalader Wickersham & Taft, New York

Using Partnership Flips to Finance Renewable Energy Projects: Evaluating Tax Risks, Navigating IRS Safe Harbors

Private Equity Real Estate Fund Formation: Capital Raising, Regulatory Issues and Negotiating Trends

Structuring Commercial Loan Term Sheets, Proposals and Commitment Letters: Key Terms for Lenders and Borrowers

FCPA Due Diligence in M&A Amid Increased Enforcement

Insurance Requirement Provisions in Technology Contracts: Mitigating Risk, Maximizing Coverage

Bank Affiliate Transactions Under Scrutiny Complying With Regulation W's Complex Restrictions on Business Dealings with Affiliate Institutions

Lending to Series of LLCs: Navigating UCC and Bankruptcy Code Risks and Providing Closing Opinions

Fiduciary Compliance in ESOP Transactions: Recent DOL Settlement Agreements

Tax Strategies for Real Estate LLC and LP Agreements: Capital Commitments, Tax Allocations, Distributions, and More

Protecting Trademarks Abroad: Madrid Protocol vs. National Filing Directly in Foreign Jurisdiction

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Reporting Costs of Health Insurance on Employee W-2s: New Requirements

UCC Article 9 Update on Searching and Filing: Best Practices for Secured Lenders Under the Amended Rules

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Securities Accounts and Other Investment Property Establishing Control Under the UCC to Perfect Security Interests in Special Collateral Types

U.S.-Israeli Estate Tax Planning for Dual Citizens

Best Efforts and Commercially Reasonable Efforts in M&A Agreements: Drafting and Interpretation Challenges

SBA Lending: Documenting, Closing and Servicing 7(a) and CDC/504 Loans

Acquiring Real Estate From a Bankrupt Seller: Legal Issues Evaluating Acquisition Options and Navigating Complex Bankruptcy Court Procedures

Data Breaches in ERISA Benefit Plans: Prevention and Response

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features:

Transcription:

Presenting a live 90-minute webinar with interactive Q&A Master Service Agreements for Oil and Gas: Key Provisions, Court Treatment TUESDAY, MARCH 13, 2018 1pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: C. Peck Hayne, Jr., Member, Gordon Arata Montgomery Barnett McCollam Duplantis & Eagan, New Orleans Scott A. O'Connor, Member, Gordon Arata Montgomery Barnett McCollam Duplantis & Eagan, New Orleans William W. (Bill) Pugh, Shareholder, Liskow & Lewis, Houston The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.

Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-755-4350 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program. For additional information about continuing education, call us at 1-800-926-7926 ext. 2.

Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to Conference Materials in the middle of the lefthand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

5 MSA BASICS An MSA provides a frame of reference and a means of retaining a contractor or a subcontractor to perform work on a given project on either a one-time or long-term basis. 3/13/2018

6 MSA BASICS 1. An MSA is more of a framework than a standalone contract. 2. Work orders provide specific details and scope of work. 3. Oral or written orders subject to the MSA create the detailed contracts. 4. MSAs are particularly useful for defining broad concepts common to oil & gas operations. 5. An MSA unifies assumptions and expectations for multiple parties. 6. It avoids or minimizes misunderstandings and, consequently, litigation. 3/13/2018

AN MSA PROGRAM 7 MUST BE INTEGRATED 1. An MSA must not be considered in isolation. 2. More than a contract, it s a program to standardize effort and to manage risk. 3. Most beneficial when companies have as few MSA forms as possible. 4. Least beneficial when poorly managed and when different contractors are bound by different MSA forms with different terms and conditions (at least on issues that may affect multiple parties, such as indemnity). 3/13/2018

3/13/2018 8

9 TYPICAL SUBJECTS IN AN MSA 1. How a work order is made and memorialized. 2. How payment is made. 3. Warranties for the contractor s services and goods. 4. Indemnity and insurance. 5. Use of subcontractors. 6. Responsibility for liens/privileges. 7. Procedures for accidents and incidents. 8. Choice-of-law. 3/13/2018

TYPICAL SUBJECTS IN AN MSA 9. Confidentiality provisions. 10. Intellectual property. 11. Term; termination. 12. Integrating pertinent statutory or regulatory requirements. a. Peculiarities of potentially applicable Anti-Indemnity Statutes. b. For work on the OCS: SEMS, Bridging Agreements. c. Federal labor laws. d. LA law: workers comp language for La. R.S. 23:1061. e. Anti-Terrorist/Money Laundering representations. 3/13/2018

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

In re Larry Doiron, Inc., 879 F.3d 568 (5th Cir. 2018) (en banc) In 2005, Apache Corporation entered into a master services contact with Specialty Rental Tools & Supply, L.L.P. In 2011, Apache issued an oral work order that directed Specialty to perform flow-back services to remove obstructions affecting the flow of a gas well in navigable waters in Louisiana. The only access to the well was via a stationary production platform. This work order did not require a vessel, and neither party anticipated that a vessel would be necessary to perform the job. Eventually determined that a barge equipped with a crane would be needed to move equipment. 55

During these operations, one of Specialty s employees was accidentally injured by a Doiron crane operator and he brought suit in federal court against Doiron. Doiron sought to enforce the indemnity provisions from the MSA, but the injured employee sought to have those declared unenforceable under the Louisiana Oilfield Indemnity Act, La. Rev. Stat. 9:2780. Federal law would have allowed enforcement of the indemnity provisions. Dispute hinged on weather the MSA was a maritime contract or not. v. 56

Louisiana Oilfield Indemnity Act La. Rev. Stat. 9:2780(A)-(B): A. The legislature finds that an inequity is foisted on certain contractors and their employees by the defense or indemnity provisions, either or both, contained in some agreements pertaining to wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, to the extent those provisions apply to death or bodily injury to persons. It is the intent of the legislature by this Section to declare null and void and against public policy of the state of Louisiana any provision in any agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee. B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee. 57

Prior Precedent Under the Fifth Circuit s prior precedent in Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990), the district court had to look at six factors to determine if the contract was or was not a maritime contact: (1) What does the specific work order in effect at the time of injury provide? (2) What work did the crew assigned under the work order actually do? (3) Was the crew assigned to work aboard a vessel in navigable waters? (4) To what extent did the work being done relate to the mission of that vessel? (5) What was the principal work of the injured worker? and (6) What work was the injured worker actually doing at the time of injury? Following this test, the district court held that federal maritime law applied. 58

A More Sensible Approach On appeal, the Fifth Circuit panel, while bound by Davis & Sons, admitted that the test was too inflexible to allow the parties or their attorneys to predict whether a court will decide if a contract is maritime or non-maritime or for judges to decide the cases consistently, and urged for rehearing en banc. Upon rehearing, the full Fifth Circuit considered more recent Supreme Court jurisprudence and created the following test: First, is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters? The answer to this inquiry will avoid the unnecessary question from Davis & Sons as to whether the particular service is inherently maritime. Second, if the answer to the above question is yes, does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract? If so, the contract is maritime in nature. Nevertheless, the Fifth Circuit did not fully dispose of Davis & Sons, and stated that its factors may be relevant when the scope of the contract is unclear. 59

The Result Applying this test for the first time, the full Fifth Circuit found that the contract was non-maritime in nature. Reasoned that the vessel used to lift equipment was an insubstantial part of the job and therefore the contract was non-maritime, thus permitting the application of Louisiana law and voiding the indemnity provision. 60

Thank you C. Peck Hayne, Jr. phayne@gamb.law Scott A. O'Connor soconnor@gamb.law William W. (Bill) Pugh wwpugh@liskow.com 61