Shell Rocky Mountain Prod., LLC v. Ultra Resources, Inc.
United States Court of Appeals for the Tenth Circuit
415 F.3d 1158 (10th Cir. 2005)
Shell's (plaintiff) settlement agreement with Ultra (defendant) contained an exculpatory clause limiting liability for operational conduct to gross negligence or willful misconduct, and a separate excessive-cost clause requiring Shell to incur costs commensurate with other operators; when Ultra counterclaimed that Shell breached the excessive-cost clause by overcharging for drilling, the trial court granted Shell summary judgment based on the exculpatory clause.
Whether an exculpatory clause barring liability except for gross negligence or willful misconduct in an oil and gas joint operating agreement applies to claims that an operator failed to abide by specific and express contractual duties assigned in the agreement.