With respect to Privity, at the time the contract came into operation, the Tribunal found no simultaneous interest in real estate and, therefore, the absence of horizontal privity. On October 14, 2020, the Delaware Borough Bankruptcy Court dealt with three adversarial proceedings concerning the repatriation of Oil and Gas, Inc. (Case 20-11548, Bankr. D. Del.), if the midstream agreements contained an enforceable CRWL, and concluded in all three cases that this was not the case. These conflicting procedures concern the following midstream collectors: (1) Elevation Midstream, LLC (“Elevation”), (2) Grand Mesa Pipeline, LLC (“Grand Mesa”) and (3) Platte River Midstream, LLC (“Platte River”) and DJ South Gathering, LLC (“DJ South”).2 The Elevation Ruling, Grand Mesa Ruling, and Platte River and DJ South Ruling (together the “Rulings Rulings”) depart from a recent duo of cases that impose CRWL in mid-game agreements. While extraction rulings focus on a debtor`s mineral rebate, recent cases in which valid CRWLs have been found have focused on a debtor`s leaary interest. One aspect of Chesapeake, which is expected to significantly influence future case law in this area, is whether a midstream contract can be refused by a debtor if it contains an opposable CRWL. The court found that Law 365 contains no exclusions with respect to crwl and no known rule or prohibition prohibits the mutual existence of a performance contract and a CRWL. Id. at 6. The court stated that “[i] does not stretch the imagination to imagine a contract that both includes an alliance that runs with the country and is executed.” Id.
In such a case, the court proposes that “the appropriate analysis be of the usefulness previously granted by the debtor to the unrepulated party, which remains after the refusal and what future benefit of the debtor will be excused by the refusal.” Id. The court predicts that “[d]epending on the respective language of the subject agreement, a plethora of outcomes are possible.” Although this issue was not tried because it found that the agreement did not contain an enforceable CRWL in court, this language should feed into the debtors` arguments in future cases that support the refusal of midstream agreements and the appropriate excuses for the debtor`s future performance of certain obligations in those agreements. It remains to be seen to what extent such arguments will be successful and the CRWL language in individual agreements, which links contractual obligations to the CRWL, will be essential in this analysis. It is customary for E-P companies to attempt, in Chapter 11, to impose midstream contracts under Bankruptcy Act 365. The refusal was not authorized by the bankruptcy courts when such agreements create enforceable agreements with the country (“CRWL”) because a CRWL is a real estate interest of the Midstream collector and not just a contractual right. Therefore, before a debtor can attempt to refuse midstream agreements, the bankruptcy court must first decide whether there is an enforceable CRWL. However, the recent decision of In re Chesapeake Energy Corporation of the Southern District of Texas Bankruptcy Court in dicta raises doubts as to whether a valid CRWL could save a midstream contract from rejection (although the CRWL, a real estate interest, would likely remain intact after the rejection).