Marcellus Shale Development

Duane Morris is uniquely positioned to provide strategic legal and business counsel to the entire spectrum of participants in the development of the Marcellus Shale, the second-largest-known gas field in the world. The opportunities associated with a shale area of this magnitude are abundant, and we have a keen understanding of the challenges of producing, transporting, storing and distributing natural gas to businesses and consumers in the United States and around the globe.

Leveraging the resources of a full-service firm, our Marcellus Shale group attorneys assist clients in a variety of corporate acquisitions, including the leasing, purchase and sale of undeveloped and producing properties; gathering and processing systems, pipelines and other significant assets; performing due diligence and overseeing bids and related financing issues. Duane Morris, founded in Philadelphia with offices around the world including in Pittsburgh, Wilmington and Baltimore, is home to a team of lawyers experienced in virtually all areas of law associated with the development of the Marcellus Shale, including:

Energy

At the core of our energy practice are attorneys who have spent their entire careers working within the industry, holding leadership positions with federal and local energy commissions before joining Duane Morris and focusing their efforts on understanding and anticipating energy policies and laws for the firm's clients.

Our attorneys have represented clients before federal and state courts, the Federal Energy Regulatory Commission (FERC), the U.S. Department of Energy (DOE), the U.S. Department of the Interior (DOI), the U.S. Securities and Exchange Commission (SEC), the Pennsylvania Public Utility Commission, New York State Public Service Commission and numerous other state regulatory commissions throughout the United States. We also work closely with the National Association of Regulatory Utility Commissioners and all of the key energy trade associations.

We assist clients with exploration and production issues; gathering, processing and transportation issues; project development; finance; taxation; mergers and acquisitions; regulatory counsel; and transactional and litigation services for complex natural gas, LNG and biogas projects.

Environmental

The experience of our environmental team dovetails seamlessly with the needs of operators and supporting service providers active in the Marcellus Shale play. We have assisted companies in the oil and gas industry with environmental permitting, defense of enforcement proceedings and negotiations with state and federal environmental agencies. We have advised clients on a wide variety of Marcellus Shale issues, including surface-water withdrawal permitting, well pad permitting, surface spill claims, methane-gas migration claims and orphan oil wells at new gas-well sites. Our lawyers have been active in the public policy discussions and debates relating to the development of Marcellus Shale gas sites in an environmentally safe manner. We counsel in all aspects of environmental law—groundwater protection, surface-water withdrawal, wastewater treatment and discharge, and siting, among others—with knowledge of and sensitivity to the interests of all stakeholders. Our environmental lawyers "get it"—that is, they understand their role is to help clients plan and advance projects, quickly resolve issues when they arise and maintain solid relationships with both regulators and the community.

Contracts

Our lawyers have negotiated numerous gas leases, as well as represented sellers and purchasers in the preparation and negotiation of natural-gas supply and transportation contracts. We have extensive experience in securing rights of way and permits to site and construct interstate and intrastate natural-gas and petroleum products pipelines. We have also represented interstate and intrastate pipeline operators in the development, permitting and construction of gas-storage facilities and transportation pipelines.

Corporate Finance

We work closely with our clients in the energy industry, as well as with their lenders, project sponsors, developers and agents, to employ sophisticated financing techniques in support of their projects. We have acted as counsel for the structuring and negotiation of various project-financing transactions, including electricity generation, LNG facilities, and natural-gas storage and transmission projects. Our lawyers advise clients on gas exploration and development, and regularly structure private placements of securities in the fossil fuels exploration sector. We have advised numerous clients in connection with the acquisition and disposition of gas properties, fee mineral interests and royalty interests. We have also assisted gas utilities with regulatory diligence on possible acquisitions.

Insurance

We have one of the most sophisticated insurance practices in the business. Our lawyers represents insurers of commercial, industrial and residential properties in matters involving losses due to myriad reasons, including fires, explosions, building collapses, natural disasters and other catastrophic causes. We provide legal services in all aspects of property insurance law and have experience handling coverage issues throughout the investigation and adjustment processes. If litigation is necessary, we represent property insurers in state and federal courts at the trial and appellate levels and in various international tribunals. Our attorneys have extensive experience advising insurers on drafting property-insurance coverage policies and assisting clients in showing their good-faith claims handling practices, which is often essential in averting bad faith or other extra contractual exposure. Among other matters, we have provided representation and advice on the availability of insurance coverage for potential liability arising from operation of former manufactured gas plants, product pipelines and processing plants.

Litigation

Duane Morris' trial lawyers have the level of industry-specific litigation experience necessary to successfully manage large-case litigation for clients ranging from individuals to Fortune 100 companies. We have represented clients in judicial and administrative proceedings involving leasehold and surface-use disputes, royalty payment issues, drilling issues, personal injury actions, challenges to attempts by municipalities to regulate oil and gas development, and coal-bed methane and storage disputes. Perhaps as significantly, by working with clients at the earliest stages of proposed transactions and other business initiatives, the firm has helped numerous clients avoid or curtail lengthy regulatory or judicial proceedings.

Municipal and Zoning

Duane Morris' real estate practice lawyers provide clients with the strategic advice they need to successfully navigate the increasingly complex maze of state and local requirements that govern the development and management of gas interests. We provide advice and representation on obtaining environmental and other regulatory approvals for companies in the industry. We represent significant gas-coalition members in Pennsylvania and their independent members in challenging attempts by townships to regulate energy activities, as well as commenting on proposed land-use ordinances.

Pipeline Infrastructure

In addition to our extensive experience in securing rights of way and permits to site and construct interstate and intrastate natural-gas and petroleum products pipelines, we have also represented interstate and intrastate pipeline operators in the development, permitting and construction of gas-storage facilities and transportation pipelines.

Public Policy, Regulation and Legislation

As the Marcellus Shale industry has become more prominent in Pennsylvania and other states, efforts to legislate and regulate its practices have followed. We are monitoring attempts to restrict certain land uses, impose new taxes and fees, require the implementation of advanced environmental-protection practices, etc. Elected officials, from governors down to the local level, are anticipated to weigh in with further proposals that would likely curtail industry practices. Duane Morris lawyers are students of these developments and counsel their clients on how to challenge and adapt to them. In addition, the firm's independent lobbying and government relations affiliate Duane Morris Government Strategies is uniquely positioned with its lobbying presence at the federal, state and local government levels to assist in these matters.

State and Local Tax

Pennsylvania is the largest natural-gas producing state currently without a tax on the extraction of natural gas from the Marcellus Shale. Duane Morris attorneys are prepared to assist clients as these issues continue to evolve. We have a broad and diverse state and local tax practice covering essentially every type of state and local tax issue or dispute, including gross receipt, sales, use, excise, income, franchise and transaction taxes. Duane Morris' experienced tax attorneys provide a wide variety of services involving multistate and local tax issues, such as guidance and planning advice on tax-savings opportunities, alternate business structures, mergers, acquisitions, asset sales, recordkeeping requirements, audit reviews and tax exemptions.

Toxic Torts

Our litigation team helps clients avert or successfully defend toxic torts litigation. Our sphere of experience covers all environmental areas—air, groundwater, surface water, waste, and products or materials in commerce. Our toxic torts litigators have proffered, deposed and supported/disproved the testimony of many of the field's leading experts in a multitude of scientific and other expert disciplines. We have defeated class certification in federal and state cases across the United States. Our experience enables us to counsel clients on ways to minimize exposure after liability-creating conduct has occurred, but before litigation is initiated. We help clients analyze and assess exposure; consider proactive measures; unify, simplify and ensure the accuracy of the company's public "voice"; become aware of the scientific and technical issues; and develop, if necessary, an integrated, coherent litigation strategy.

Well Pads and Water Withdrawal

Duane Morris lawyers have provided counsel and guidance on the existing regulatory requirements under state and river basin commission (Susquehanna River Basin Commission, Delaware River Basin Commission) laws and compacts.

For More Information

For additional information, please contact Seth v.d.H. Cooley or any of the attorneys in Duane Morris' Energy, Environment and Resources Practice Group, or Kenneth Davis of the firm's independent lobbying and government relations affiliate Duane Morris Government Strategies.

As required by United States Treasury Regulations, you should be aware that this communication is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under United States federal tax laws.

The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results.

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Marcellus Shale Law and Policy Update—February 29, 2012

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