Mutual interest?

Several parties entered an “Area of Mutual Interest” (AMI) agreement, a common feature of oil-and-gas development projects. The AMI included various interests “which were or are acquired after” the agreement’s effective date, “by a Party” to the agreement. But it excluded “all interests, leases or agreements owned by a Party prior to the Effective Date.” Thus, when a party bought interests from another party after the effective date, that sale was not within the scope of the AMI. The Fifth Circuit observed: “If Appellees sought to prohibit the type of activity in which EnerQuest engaged, they could have easily done so through the contract.” Glassell Non-Operated Interests, Ltd. v. EnerQuest Oil & Gas, LLC, No. 18-20125 (June 12, 2019).