Sabine Saga: 2nd Circuit Upholds Rejection, Cites Approach that Could Broadly Undercut Texas Gathering Agreements

Gathering agreements with dedications in Texas are under a heavy cloud as producers now appear to be able to avoid such agreements by filing for bankruptcy in the 2nd Circuit.

In an emphatic decision on May 25, the U.S. Court of Appeals for the 2nd Circuit affirmed a district court decision finding that producer Sabine Oil and Gas Corp. could reject certain midstream gathering contracts governed by Texas law in its bankruptcy case.