A Flock of Trouble: Liability Under Oil and Gas Joint Operating Agreements After Seagull v. Eland

The Court's decision in Seagull effectively makes all predecessors in title to an interest liable for breaches caused by a successive leaseholder unless they have presciently acquired express approval of their assignments. The interests in JOAs can be, and usually are, assigned numerous times. In fact, a leasehold interest in a JOA such as that being discussed here can be assigned dozens of times over the decades that a JOA may be effective. This decision, extending liability to all predecessors in interest, dramatically changes the liability landscape of a JOA, effectively making all predecessors in interest liable for the malfeasance of one successor in interest that may be several times removed from the initial or subsequent assignee.