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Miki Kolobara To Conduct a Seminar Titled
“Understanding the NAESB Master Agreement for Natural Gas & NGLs”

We are pleased to announce that Miki Kolobara will conduct a two-day seminar titled "Understanding the NAESB Master Agreement for Natural Gas & NGLs" on October 4-5, 2018 in Houston. This seminar is intended to be an in-depth, practical analysis of the NAESB master agreement and special provisions relevant to successfully drafting and negotiating NAESB documentation. The seminar will provide a detailed review of the NAESB provisions and identify the most relevant shortcomings that can be remedied in the special provisions to the master agreement. Also, the seminar will outline the best practices for drafting and negotiating NAESB special provisions and transaction confirmations, credit support documentation, and cross-product and cross-affiliate master netting agreements in the current regulatory environment.

The attendees will learn various operational factors impacting NAESB transactions including, but not limited to selling and buying natural gas at illiquid delivery points, pipeline curtailments and force majeure events, natural gas buy-backs and swing volume adjustments, asset management agreements and capacity releases, buying and selling intra-day gas, volumetric adjustments in physically settled transactions, and many more.

Also, the seminar will also provide insight into the best practices and standards for drafting effective transaction confirmations, netting agreements, and asset management agreements frequently used in the gas marketing process. This seminar also will outline practical steps to addressing the relevant operational issues such as natural gas capacity curtailments, force majeure events, natural gas buy-backs, and bookouts.

For more information and registration, click here:


Miki Kolobara To Conduct An ISDA® Master Agreement Seminar

Miki Kolobara will conduct a two-day seminar titled UNDERSTANDING ISDA® AGREEMENT IN THE EVOLVING REGULATORY ENVIRONMENT on April 5-6, 2017, in Omaha, NE.  This seminar is intended to help attendees better understand the key provisions of the ISDA® Master Agreement, Credit Support Annex and various Schedules.  In addition, attendees will learn the most relevant and recent regulatory developments regarding mandatory margin requirements, position limits, collateral management, and reporting requirements.

In recent years, participants in over-the-counter (“OTC”) derivatives markets have experienced an unprecedented regulatory burden. Because of Dodd-Frank, EMIR and similar regulations, the documentation for OTC derivatives is becoming increasingly complex and uncertain.  Many companies are looking for clarity about their ability to hedge due to regulatory and financial risk associated with derivatives documentation.  In order to facilitate an in-depth analysis of the OTC documentation drafting, analysis, and review, Miki Kolobara perform an in-depth review of key provisions of the ISDA® Master Agreement, Credit Support Annex and various Schedules and Protocols.  In addition, attendees will learn the most relevant and recent regulatory developments regarding mandatory margin requirements, position limits, collateral management, and reporting requirements.

In order to assist the attendees to better understand the drafting, negotiating, and enforceability risks, this seminar will analyze and discuss Some of the topics to be covered during this seminar will cover the following topics:

 Click on the following to access the seminar agenda and registration information.

For more information about this seminar please contact Kolobara Law Firm by email at or by phone at 402-881-3987.

Bankruptcy Court Allows Rejection of Midstream Gathering Agreements

On March 8, 2016, U.S. Bankruptcy Court Judge Shelley C. Chapman permitted Sabine Oil & Gas (“Sabine”) to reject its gathering agreements with two pipeline operators as “executory contracts.” Although the Court’s decision is non-binding as to the underlying issue of the whether the contracts created a property interest in the underlying mineral estate, the ruling could nevertheless create a chilling effect on industry-typical practices regarding such agreements. Prior to this decision, pipeline operators (and the banks providing them financing for building the gathering and processing facilities) have believed that a well-drafted gathering and processing contract for certain minimum delivery obligations would survive a driller’s bankruptcy.

Before filing for bankruptcy, Sabine had entered into gathering contracts with pipeline operators where Sabine agreed to dedicate all oil and gas from certain designated areas, subject to specified minimum volume or payment requirements, to the pipeline operators. The agreements, governed by Texas law, specifically provide that the agreements themselves create a “covenant running with the land.” After filing for Chapter 11 protection in the Southern District of New York, Sabine filed a motion to reject the gathering agreements under the Bankruptcy Code as unduly burdensome “executory contracts.” The pipeline operators objected, arguing that the gathering agreements are covenants that run with the land and, therefore, cannot be rejected in bankruptcy. If the agreements are, in fact, covenants that run with the land, they would not be subject to rejection in bankruptcy.

The legal issue before the Court, then, was whether the gathering agreements are executory contracts subject to rejection in bankruptcy (thus creating a breach of contract and putting the pipeline operators in the category of general unsecured creditors), or if the agreements create a property interest that attaches to the mineral estate and continues with the land, unaffected by the bankruptcy.

The Court did not resolve the property interest issue in its ruling. Rather, the Court decided that Sabine satisfied the “reasonable business judgment” standard that is applied in determining whether executory contracts have been properly accepted or rejected by the debtor. For procedural reasons (the issue was before the Court on a Motion to Reject rather than an adversarial proceeding or contested matter, and the Court found that a substantive legal ruling must occur in the context of one of the latter), the Court explained that it’s decision was non-binding. However, it left no doubt as to what the final, binding determination would be if properly brought before the Court:

If it is ultimately determined that the covenants at issue in the Agreements do not run with the land, as the Debtors and the Court believes to be the case, the Debtors will be free to negotiate new gas gathering agreements with any party, likely obtaining better terms than the existing agreements provide. If, however, the covenants are ultimately determined to run with the land, the Debtors will likely need to pursue alternative arrangements with [the pipeline operators] consistent with the covenants by which the Debtors would be bound. In either scenario, the Debtors’ conclusion that they are better off rejecting the [gathering] Agreements is a reasonable exercise of their business judgment. Therefore, even though, as explained below, the Court’s conclusion that the covenants at issue do not run with the land is non-binding, the Court finds that the Debtors’ decision to reject each of the [gathering] Agreements to be a reasonable exercise of business judgment.

Applying Texas law, the Court noted that “language in a contract containing a covenant is the primary evidence of the parties’ intent, but terminology is not dispositive.” Instead, applying admittedly archaic property law principles, the Court determined that a covenant runs with the land when, among other elements, and it “touches and concerns the land.” The Court also considered whether there was “horizontal privity of estate,” which traditionally involves a property owner reserving, by covenant, an interest in the property for a third party.

Under the Court’s analysis, the primary terms of the gathering agreements relate to the rights and obligations regarding the oil and gas rather than to the land or leasehold interests from which they came. Further, the right to transport and transform the oil and gas products is not one of the property rights of a mineral estate under Texas law. The Court went on to find that to “touch and concern the land,” a covenant must affect the owner’s interest or its use of the land, and the gathering fee covenant had no direct impact on the land or on Sabine’s property rights.

While this ruling may fuel a driller’s desire to re-negotiate more favorable terms with pipeline operators, the impact of the non-binding ruling is still limited to the specific terms of those gathering agreements and the state law governing those agreements.

There are plenty of contract drafting questions to consider in light of the ruling. The Court distinguished certain cases where covenants were found to grant property interests, and arguably drafters could work to more closely mirror those covenants and the underlying provisions to create a genuine property interest.

Another option may be to consider an entirely different drafting approach, such as structuring the gathering agreements as forward contracts and/or swaps, especially in light of the CFTC’s recent willingness to include transportation and tolling agreements in the definition of a swap. Such a designation could potentially bring these contracts under the safe harbor provisions of the Bankruptcy Code, and the parties’ initial intent to have a gathering agreement survive a driller’s bankruptcy could be preserved.

Minimizing Energy Trading Compliance Risk in the Evolving Legal Environment

Kolobara Law Firm was selected by a prominent energy seminar organization, PGS Energy Training, to conduct a two-day seminar titled “Minimizing Energy Trading Compliance Risk in the Evolving Legal Environment” in Houston, TX on December 9-10, 2014. This seminar will provide an in-depth analysis of the current state of energy commodities and derivatives regulations. In particular, the seminar will examine some of the most relevant Dodd-Frank rules and regulations and their affect on the day-to-day operations of energy market participants. For example, we will examine the trade-option definition and its impact on the full requirement transactions, variable baseload transactions, swing load and fuel requirement contracts. Also, there will be a detailed examination of the new position limits rule, including the affiliate aggregation of positions and bona fide hedging definition.

The seminar will provide a roadmap for risk management and trading compliance, starting with mandatory policies and procedures. Further, we will examine some of the most critical contractual issues and provisions including the ISDA, NAESB, EEI, and WSPP master agreements, the relevant annexes, trading confirmations, and credit support documentation. Also, the seminar will analyze the regulatory requirements for mandatory training for the front and middle office personnel and the best practices for creating and implementing a culture of compliance.

For additional information or to register for this seminar, please click here

Kolobara Law Firm’s Miki Kolobara Quoted in Bloomberg Article

Bloomberg News recently conducted an interview with Miki Kolobara, managing attorney at Kolobara Law Firm, LLC. The interview focused on a recent market manipulation case in the energy trading arena. Mr. Kolobara shared his experience on the importance of adequate training and an ongoing compliance program for all market participants engaged in energy trading. Also, Mr. Kolobara emphasized the financial, regulatory, and legal benefits of creating and maintaining a culture of compliance for energy trading entities. The article can be viewed here.