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United States Court of Appeals for the Fifth Circuit
July 31, 2020, Filed
No. 19-20271, Consolidated with: 19-20282
[*199] TOTAL E&P USA, INC. ("Total") appeals two district court judgments2 holding it liable for the cost of abandoning certain offshore oil and gas assets. Marubeni Oil & Gas (USA), Inc. ("MOGUS") cross-appeals one district court's denial of its motion for judgment as a matter of law on damages related to the abandonment. We AFFIRM the judgment in Case No. 19-20271 and REVERSE and RENDER judgment in Case No. 19-20282.
The Assets and [**2] Operating Agreements
These consolidated appeals involve the abandonment of assets in the "Canyon Express" oil and gas development in the Gulf of Mexico. Canyon Express contains three oil and gas fields. The fields are connected by a shared pipeline structure known as the Canyon Express Pipeline System ("CEPS"). Two Canyon Express properties are at issue here: (1) CEPS itself and (2) a connected oil and gas field known as MC 305.3
In 2000, Total and several other companies entered into the CEPS Operating Agreement (the "CEPS Agreement"). The CEPS Agreement governed the parties' "respective rights, duties and obligations" in building, running, and eventually abandoning the "Common System," or CEPS. It referred to the parties as "Common [*200] System Owner[s]." It also listed each Common System Owner's "Equity Interest" in CEPS based on its ownership in the connected oil and gas fields.
Total was the original "Operator" of CEPS under the CEPS Agreement. As Operator, Total was required "to operate, maintain, upkeep, repair, [and] administer" CEPS. Total also received rights-of-way from the government to install CEPS.
Two provisions of the CEPS Agreement are important here. The first, Article [**3] 11.3, governs abandonment of CEPS. Article 11.3 states:
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
824 Fed. Appx. 197 *; 2020 U.S. App. LEXIS 24357 **; 2020 WL 4460002
TOTAL E&P USA, INC., Plaintiff - Appellant Cross-Appellee v. MARUBENI OIL & GAS (USA), INC., Defendant - Appellee Cross-Appellant TOTAL E&P USA, INC., Plaintiff - Appellant v. MARUBENI OIL & GAS (USA), INC., Defendant - Appellee
Prior History: [**1] Appeals from the United States District Court for the Southern District of Texas. USDC No. 4:16-CV-2674, USDC No. 4:16-CV-2671.
Total E&P USA, Inc. v. Marubeni Oil & Gas (USA), Inc., 2017 U.S. Dist. LEXIS 215784 (S.D. Tex., Sept. 11, 2017)Total E&P USA, Inc. v. Marubeni Oil & Gas (USA), Inc., 2016 U.S. Dist. LEXIS 142421 (S.D. Tex., Oct. 14, 2016)
abandonment, obligations, royalty interest, costs, district court, decommissioning, damages, parties, summary judgment, matter of law, satisfaction, Participating, assigned, argues, rights, cases, oil, assignor, setoff, properties, provisions, operating agreement, time of abandonment, bankruptcy court, rights-of-way, proceedings, judgments, quotation, proceeds, reserved
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