Background

The operator of a natural gas gathering system in one of the US Shale Plays was not fulfilling its role in the appropriate calculation and assessment of natural gas gathering fees. Under a Joint Operating Agreement and Ancillary Facilities Agreements there were clear guidelines for the calculation of fees.

Our Role

Secretariat professionals worked with the non-operator in defining the damages and developing the basis of the claim is arbitration. Calculation of damages was the primary focus, but additional industry expertise was required in the form of expert testimony on industry practices for development of gathering rates.

Outcome

The client relied on our extensive industry expertise in the calculation of long-term gathering fees, providing clear understanding of industry practice related to the obligation of operators in developing gathering fees correctly and in accordance with industry practice. Further, we assisted the client and the panel in the correct calculation of damages and communication of the correct message related to industry practice. The panel issued an award in favor of our client, and then asked us to calculate the final damage award.