Exploration and Development Agreements
The largest part of Mr. Borrego’s practice consists of drafting and negotiating exploration and development agreements, as used in the onshore domestic oil and gas exploration industry, the offshore industry, and the international oil and gas industry. Because of the nature of the industry, it is difficult to characterize all types of agreements, a partial list would include: joint venture agreements, farmouts, farmins, participation agreements, bottom-hole, dry-hole and acreage contribution letters, joint operating agreements, oil and gas leases, production sharing contracts, concession agreements, drilling contracts, platform use contracts, group shoot agreements and bidding agreements, as well as licensing agreements for the use of seismic or other data. Frequently, these agreements require the drafting and negotiation of ancillary agreements to allow the parties to conduct the operations which are contemplated by the original agreements. By necessity, Mr. Borrego is involved in the drafting and negotiating of accounting procedures, easements, assignments, royalty and mineral deeds, bills of sale, compressor site agreements, master service agreements, construction contracts, time charter agreements, bareboat and helicopter charter agreements.
Because so much of the legal framework of the oil and gas industry was created in the onshore regions of Texas, Oklahoma and Louisiana, many of those instruments, and certainly the concepts, have been used as templates or models in the offshore and international oil and gas industry as well. A careful student of the antecedents of the joint operating agreement as used in the United States onshore industry will see that many of its aspects are to be found in the operating agreements which are used by international companies doing business throughout the world, as well as national oil companies seeking to do business with multi-nationals.
Acquisitions and Divestitures
Many companies build reserves through the process of acquisitions of existing reserves or producing properties. Likewise, companies may, for strategic or other reasons, determine that the continued ownership of properties in an area no longer comports with the company’s business plans. As a result, a portion of Mr. Borrego’s practice consists of drafting, reviewing, negotiating and advising clients with regard to the acquisition and sale of oil and gas properties and energy companies, through production purchases, royalty purchases or other asset based acquisitions, as well as through merger arrangements (including recapitalizations, leveraged buyouts and exchanges of stock or partnership units), and the purchase of properties through bankruptcy and other insolvency proceedings.
The acquisition of large blocks of producing and non-producing properties requires the coordination of many different professionals, including management, financial, engineering, accounting, land, legal and risk management professionals, and the coordination of their activities. Mr. Borrego has been involved in several hundred acquisitions, and can advise not only with regard to the legal aspects of the reviews of properties, both on the purchaser and seller side, but can also advise clients with regard to the coordination of the various aspects of the acquisition or divestiture of properties, and as needed, can supervise some of the professionals in respect of review and other activities.
Title to Oil and Gas Properties
Fundamentally, none of the agreements used in exploration and production are useful unless the ownership of the underlying oil and gas properties can be established to a reasonable certainty. In the domestic industry, historically, ownership has been established through the use of title opinions. The title opinions, whether acquisition, drilling, shut-in royalty, supplemental, division order, unit or financing opinions are among the more critical documents used to determine ownership of oil, gas and other minerals, and, in the case of financing arrangements, to determine the priority of liens. Mr. Borrego has examined title and prepared opinions in Texas since the beginning of his career, and, in addition, has reviewed opinions prepared by others in conjunction with the acquisition and divestiture of properties and in financing arrangements.
Financings
The oil and gas industry requires large amounts of capital, and the industry has historically relied upon investors and financial institutions to supply that capital. Mr. Borrego has represented borrowers, lenders, capital providers and investors, in the drafting, reviewing and negotiating of loans secured by oil and gas production or other assets, which includes drafting, reviewing and negotiating credit and loan agreements and mortgages or like documents, or other arrangements for the provision of capital. Additionally, in conjunction with securities and other counsel, Mr. Borrego has advised clients with regard to the sale of interests in limited partnerships or other arrangements, both public and private to finance the acquisition of properties or the exploration and development of properties, including debt and equity financing arrangements between producers and pension funds, insurance companies and other institutional investors.
Occasionally, there is a need to structure or re-structure financing arrangements when a producer finds itself in financial difficulties. This has resulted in Mr. Borrego’s involvement in the drafting, reviewing and negotiating of secured and unsecured debt in the course of, or as an alternative to, insolvency proceedings, or revising debt and other instruments.
International Activities
While it is true that the international industry has its roots in the domestic industry there are some agreements and documents which bear only a passing resemblance to their domestic antecedents, and, as time has gone by and national oil companies or oil ministries have become increasingly sophisticated those agreements have become increasingly complex. Mr. Borrego has been involved in the drafting, reviewing and negotiating of concession, production sharing and like contracts, exploration and production joint ventures, onshore and offshore operating agreements, lifting and terminalling agreements, drilling contracts, pipeline and refinery construction contracts and with the drafting, reviewing and negotiating of project or other financing agreements. Mr. Borrego has experience in the Middle East, Far East, Australia, Latin America and Europe and has represented foreign financial and other institutions in United States energy transactions. Having lived and worked in several foreign countries, speaking several languages and having been raised in the international oil business, Mr. Borrego brings a wide range of experience to the international practice. Mr. Borrego has served several clients as the chief counsel in administering those clients’ overseas properties.
Alternative Energy Projects
While fossil fuels have been the focus of Mr. Borrego’s practice, he has also been involved in a number of alternative energy projects. Many of the documents and concepts utilized in alternative energy projects have been adapted for use from the documents in the oil and gas industry, and Mr. Borrego has advised clients in regard to wind power projects and geothermal projects.
Miscellaneous
Many transactions, before the parties are in a position to negotiate definitive terms, require that one or more parties be willing to disclose sensitive data. That disclosure must be limited in nature, or a party may require that the data be protected from further disclosure. Mr. Borrego provides drafting, reviewing and negotiating expertise in regard to confidentiality agreements, which limit the manner in which disclosure of data may occur, both as ‘stand-alone’ documents or embedded within the provisions of other instruments.
Occasionally, clients require advice with regard to the selection of entities in order to consummate a transaction. Mr. Borrego has provided advice with regard to the structuring, drafting, reviewing and negotiating of documents related to closely held corporations, partnerships and other entities. For several clients, Mr. Borrego has worked with estate planning and probate counsel regarding the oil and gas aspects of family limited partnerships, trusts and wills.
Clients occasionally find themselves in need of advice regarding the management and supervision of litigation or the settlement of litigation. Mr. Borrego has provided advice to clients, both as plaintiff and as defendant representative, and assistance and counsel in mediation and arbitration proceedings, and has assisted or taken the lead in preparing, reviewing or implementing settlement agreements.
On behalf of companies seeking to employ senior management or other personnel, or on behalf of individuals who are entering into employment or consulting arrangements, Mr. Borrego has advised clients in regard to the drafting, reviewing and negotiating of employment and consulting agreements.
Other Legal Professionals
The legal profession, like many others, has become increasingly specialized, and no single lawyer can offer expertise in all the legal issues which must be faced by a client. Specialized advice in the areas of commercial lending, tax, securities, environmental, litigation, intellectual property or other areas of law is often required; each state has its own peculiarities, whether statutory, regulatory or otherwise, and no single lawyer, or any firm, has the ability to provide advice for all areas of law or the law of all states. Mr. Borrego has developed a wide network of lawyers, both in large and small firms, or solo practitioners that can provide specialized advice or services to clients, and as part of the services provided by Mr. Borrego, he assists clients in obtaining the advice that is necessary.