Bowers Oil & Gas, Inc. v. DCP Douglas, LLC

Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG's wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan's successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party's sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed suit asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. Upon review, the Supreme Court affirmed. The Court found no breach of contract in the successor's removal of the pipelines connecting BOG to the gas gathering system and that the Gas Purchase Contract was properly terminated for economic cause. Furthermore, the Court found no clear error in the district court's rejection of BOG's claim for breach of the implied covenant and fair dealing. View "Bowers Oil & Gas, Inc. v. DCP Douglas, LLC" on Justia Law