[Type here][Type here]January 1, 2018
Negotiating Natural Resource Agreements
Spring Semester 2018
Instructors:
Prof James M. King – (303) 756-6583
Prof Tonye Tony Oki – (720) 436-4009
Class Schedule: The class meets on Mondays and Wednesdays at 6 p.m. (promptly) in Room 313of the Ricketson Law Building.
Per the Law School’s Schedule:
First class is Monday, January 8 8, 2018.
No class on
Monday, January 15 (Martin Luther King Day)
Monday March 12 andWednesday March 14 (Spring Break).
There will be class on Presidents Day
Last class will be Monday, April 23.
Final paper will be due the last day of finals, May 17
Communications: We will communicate with you by e-mail. PLEASE SEND AN E-MAIL TO BOTH INSTRUCTORS AT THE E-MAIL ADDRESSES ABOVE so we have your e-mail address. It does not have to be a DU e-mail address.
Office Hours: Ad Hoc as arranged by students and professors. You may call either of us during business hours.
Overview: The course is intended to introduce students to the types of issues and agreements commonly encountered and negotiated in various types of transactions, both domestic and international, in the oil and gas industry and hardrock mineral industry. The course will address the legal frameworks and principles that govern and work as constraints on agreements, consideration of negotiation analysis and techniques and practical detailed exposure both to contract issues that transcend specific agreements and to specific types of contracts encountered in the natural resources industry. While lectures will be used to expedite covering larger amounts of material, we hope for lively discussion and class participation from everyone. We welcome and encourage input from the students.
Grading. Grades will be normalized per College of Law standards. Our experience has been that,regardless of whether he or she is an MRLS, JD or LLM candidate, any student can achieve success in the class. The course is designed to account for the variation in levels. We anticipate a number of negotiating exercises (with written product outputs) and a paper as the grading basis. We will discuss with you in the first class the means of evaluating student performance. This will be your first negotiating exercise. An in-class final will not be given.
Course reading: We will discuss the course textbook with you at the first class. We have been using Donald G. Gifford, Legal Negotiation Theory and Practice (2d Ed. 2007). A new edition has now been published, but Prof. Oki and Prof. King have not reviewed it. The second edition and first edition have the materials we need and can be obtained used or online at much lower prices. However, we recommend you wait until after the first class to purchase any text. Designated chapters of the Gifford book and other texts or law review articles will be assigned. Except for the Gifford textbook, copies of articles will either be placed on reserve in the library or will be distributed directly to you in paper format or by e-mail. In some cases, links will be provided. Numerous examples of agreements used in the industry will also be distributed by e-mail sufficiently in advance of the class where they will be discussed to allow you to review them. We expect you to consider them carefully as you read them, attempting to anticipate which of the provisions are the most important and why. Listed readings may be supplemented later.
Disability accommodation: If you have a disability/medical issue protected under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act and need to request accommodations, please visit the Disability Services Program website at You may also call 303.871.2372, or visit in person on the 4th floor of Ruffato Hall, 1999 E. Evans Ave.
Attendance/Class Participation. Attendance and class participation will be a component of your grade. It will be very difficult to get anything out of the class or to get a satisfactory grade without attendance at all or almost all sessions. The law school attendance policy (which presently requires attendance at no less than 80% of the classes) will apply. You can expect to be called on to respond to specific questions about issues raised by the reading materials and to participate in negotiating exercises. It is particularly important that you be present to participate in the negotiating sessions.
Syllabus/Course Schedule: The following is a preliminary outline of the subjects to be covered. It is subject to change both as to timing and subject matter as the course progresses. There is no assurance all topics will be covered, as we intend to spend such time as necessary to cover each topic we commence.
Legal Drafting:Issues to Consider, The Title, The Parties, The “Whereas” Clauses, The Definitions, The Grant, Restrictions, Term/Duration of the Agreements Consideration, Warranties / Infringements, Boilerplate Provisions Modification Provisions, Signature Provisions
General issues of contract formation, documentation, execution, performance and enforceability
Contract formation issues
Letters of Intent/Heads of Agreement
Authority of Negotiators
Formalities of execution
Recording/registration
Legalization across borders
Choice of laws; venue
Readings:
Fact patterns and sample letter of intent—to be distributed.
David S. Allman and Pablo Mir, “Easier Signed than Done—Execution, Authentication and Recording of Documents in Common Law and Civil Law Jurisdictions,” 52 Rocky Mtn. Min. L. Inst., Ch. 23 (2006).
Legal Negotiation:Negotiation Strategy; Negotiation as Client Representation, The Components of Negotiation Process, Distinguishing Style from Strategy
Reading: Gifford's Legal Negotiation: Theory and Applications (American Casebook Series®) (American Casebooks), 2d Ed. 2007.
Choosing effective negotiation tactics, the other party’s negotiation strategy, behavioral types; Ascertaining Clients Alternatives to Negotiated Agreement
Class Exercise
Royalties—Landowner, Overriding, Net Profits, Oil and Gas and Hardrock Minerals
Reading:Rogers v Westerman Farm Co., 29 P.3d 887 (Colo. 2001)
Rimledge Uranium & Mining Corp. v Federal Resources Corp., 13 Utah 2d 329, 374 P.2d 20 (1962).
United States Steel Corp. v. Whitley, 636 S.W.2d 465 (Tex. App. 1982).
S. Dempsey and R. Parcel, The Evolution of the Mining Royalty, 53 Rocky Mtn. Min. L. Inst. Ch. 30 (2007): Sections 30.1, 30.2 and 30.5.
Forms: (1) Net Smelter Returns Example; (2) Net Profits or Net Proceeds Example (3) Oil and Gas; Overriding Royalty Agreement
Legal Negotiation:Narrowing of Differences: Competitive Tactics For Narrowing Differences, Cooperative Tactics For Narrowing Differences, Problem Solving Tactics For Narrowing Differences.
Closure: Competitive closure tactics, Cooperative closure tactics and Problem Solving closure tactics.
Class Exercise
The practicalities and pitfalls of negotiating an agreement in a foreign jurisdiction.
Possible guest speaker.
Legal NegotiationMultiple Party Negotiation: Structuring Multi-Party negotiation, Negotiation Counseling, Specific negotiation maneuvers; communication techniques; relationship building; and journals, external fairness markers
Class Exercise
Acquisitions and Dispositions (Assets and Enterprises)
Confidentiality Issues and Agreements:
Reading:Sample Agreement (E-mail distribution).
F.R. Pletcher and A. A. Zoobkoff, Gotcha! Turning Confidentiality and Standstill Agreements Into Gold Mines, Rky. Mtn. Min. L. Inst., Ch. 28 (2007)—Copy to be supplied electronically.
Sections to read:
28.01;
28.02;
28.03[4];
28.04[1],
[2][a] and [f],
[3][c]
[5][a] and [b]
[6]
[7]
28.05[2]
Cases:Minera Aquiline Argentina S.A. v. IMA Exploration Inc., 2007 BCCA 319 (British Columbia Court of Appeals 2007);
Lac Minerals Ltd. v. International Corona Resources Ltd., 2 S.C.R. 574 (Supreme Court of Canada 1989). The Lac case is confusing because, after a brief summary of the holdings, the facts are stated in the dissent, which precedes the decision of the majority. Concentrate on the Lac facts.
Practical and unique legal aspects of negotiating with indigenous populations.
Possible guest speaker.
Dispute Resolution in International Petroleum & Mineral Transactions
Alternative Means of Resolving International Disputes, Obstacles to Litigation of Disputes in International Arrangements, Problems of Suing Foreign Governments, Recognition and Enforcement of Judgments and Arbitral Awards, Considerations for Choice of Forum, Other forms of Disputes Resolution, General Principles of Arbitration Law / ADR
Gifford's Legal Negotiation: Theory and Applications (American Casebook Series®) (American Casebooks) 2007
Extracts from: Ralph H. Folsom et al, Dispute Settlement, International Business Transactions (A Problem Oriented Course Book) EIGHTH EDITION 2005 (Library Reserve)
John S. Dzienkowski, Dispute Resolution in International Petroleum Transactions, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010
International Transactions/Agreements in Natural Resources
Governing Laws:
Common Law jurisdictions, Civil Law Jurisdictions, Sharia Law Jurisdictions, Transnational Reach Domestic Laws, Blocking Statutes, International Laws, International Organizations, Sensitive Issues With The East Bloc Countries, Sensitive Issues With Developing Countries, Civil & Common Law Countries
Ernest E. Smith, Business and Commerce, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010
Owen Anderson, International Crude Oil Sales, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010
International Resources Trade Instruments:
International Contract Terms, Letters of Credit and other international trade instruments
Ralph H. Folsom et al, International Business Transactions, A Problem – Oriented Course Book, (p.259) Eight Edition, American Casebook Series 2005
Owen Anderson, International Crude Oil Sales, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010
Project Financing:
Mode of Financing, Sources of Project Financing, Types of Project Finance Devices, Types of Purchase and Sale Contracts, Risk Analysis, Advantages of Project Finance, Disadvantages of Project Financing.
Ralph H. Folsom et al, International Business Transactions, A Problem – Oriented Course Book, Eight Edition, American Casebook Series 2005 P.259
Earnest E Smith, Business and Commerce, Investment and Financing, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010;
John S Applegate et al, Toxic Torts, The Regulation of Toxic Substances and Hazardous Wastes, University Casebook Series, Foundation Press 2000 P.278
International Minerals Transactions:
Joint Venture Agreements, International Joint Operating Agreements, Farm-out Agreements, Co-ownership, Unitization, Marketing Hard Rock Minerals, Due Diligence in Hydrocarbons & Minerals Agreements/Transactions
Owen Anderson, Oil & Minerals Markets, International Petroleum Transactions Third Edition (Rocky Mountain Mineral Law Foundation) 2010
International Crude Oil Transactions and Gas Sales
International Crude Oil Transactions:
Term Contracts, Single Cargo Sale – Spot Sale, Exchange Sale, Forward Sale; Futures Swaps & Similar Devices, Counter-Trade, Marketing Provisions in Host Government Contracts
Joint Participation Agreements (Farmout, Farm-ins, Joint Ventures, LLC’s)
Reading:Meridian Minerals Corp. v. Nicor Minerals, 742 P.2d 456 (Mont. 1987).
Service Agreements Generally; Risk Allocation
Reading: Public Service Co. of Colorado v. United Cable Television of Jeffco, 829 P.2d 1280 (Colo).
Drilling and other Service Agreements (Mineral Exploration and Petroleum)
Construction Agreements; EPCM Contracts (Mining)
Financing (Enterprise Financing, Project Financing and UCC)
Property Acquisition Agreements
U.S. Regime
Private oil and gas leases
Private minerals leases
Federal onshore and offshore oil and gas leases
Exploration Agreements
Options to Lease or Purchase
Agreements for Resources Situated Outside the United States (e.g. Concessions)
Areas of Mutual Interest
Access
Surface Owner Agreements
Multiple Mineral Development
Readings:Forms – Mineral Lease (petroleum); Mining Lease (U.S. hard minerals); MMS Lease Form (offshore petroleum).
John S. Dzienkowski, “Concessions, Production Sharing and Participation Agreements for Developing a Country’s Natural Resources.” International Petroleum Transactions 3d Edition (Rocky Mountain Mineral Law Foundation) 2010 (On reserve);
Allen D. Cummings, “Old Area of Mutual Interest and Dedication Agreements – New Problems,” 52 Rky Mtn. Min. L. Inst., Ch 27 (2006)
Mineral Sales Contracts
Mine Operations Contracts
Goods
Contract Mining Agreements
Solar and Wind Farm Contracts
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