James M. Gaitis - International Arbitration Chambers
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James Gaitis Oil & Gas/Energy Background and Experience
 
Over the past 39 years, James Gaitis continually has been involved in the oil & gas and energy industries in a broad variety of capacities. He has served as in-house counsel, lead outside trial and transactional counsel, and as Special Counsel to various oil & gas clients, including domestic and international producers, pipelines, midstream companies, service companies, and mineral and royalty owners. He has been an officer, director, general partner, and part owner of privately held independent oil & gas producers. He has owned and leased minerals, and owned royalty and overriding royalty interests and non-operating working interests in producing oil & gas wells. He has served as a full-time faculty member, the Director of an LLM international dispute resolution program, the Principal Teaching and Research Fellow, a Global Faculty member, and an Honorary Lecturer at one of the leading postgraduate academic institutions in the world focusing on the oil & gas, energy, and mineral resource extraction industries. He has repeatedly served as a Guest Editor and Editor organizing and editing significant publications relating to international and domestic energy sector disputes and arbitration and has organized and participated in conferences and on speaking panels addressing international oil & gas/energy dispute resolution. He is listed on the leading institutional arbitration panels featuring highly experienced oil & gas/energy arbitrators, including the preeminent Energy Arbitrators List hosted by the International Center for Dispute Resolution (the international arm of the American Arbitration Association), the AAA National Energy Panel, and the CPR Oil & Gas/Energy Panel.
 
Mr. Gaitis has substantial experience and/or background in the following areas relating to the oil & gas/energy industry:
 
I. Claims for Damages in Oil & Gas Disputes/Oil & Gas Asset Valuations/Business Valuations
 
39 Years of experience as legal counsel, arbitrator, and academic addressing issues regarding claims for damages in oil & gas disputes and oil & gas asset valuations. Substantial background and experience with issues relating to discounted cash flow and net present value, equivalency principles, non-systematic risk, Monte Carlo simulations, decision tree analysis, cash flow analysis and outcomes, Modern Portfolio Theory, the capital asset pricing model, mitigation of damages, contractual limitations on liability and loss, fair market value, EBITDA, lost profits, etc. Extensive experience as legal counsel and arbitrator in valuations of producing and nonproducing properties and midstream and downstream oil & gas facilities, including issues relating to expert appraisals, reservoir engineering, engineering standards, geology, downhole data, production data, production declines, material balance equations, weighted average cost of gas (WACOG), weighted average cost of capital (WACC), reserve recoverability, taxes, royalties, domestic and international market conditions, and domestic and international governmental regulation. Experience with and knowledge of the application of the damages provisions in UCC Article 2, the UNIDROIT Principles, and the Convention on the International Sale of Goods. 
 
II. Upstream Oil & Gas
 
A. Joint Operating Agreements (JOAs), Production Sharing Contracts, and Concessions
 
Substantial experience beginning in 1978 and through the present with domestic and international JOAs, including deepwater JOAs and JOAS relating to production sharing contracts and concessions. As in-house and outside counsel drafted unique JOA provisions relating to operator removal and replacement, elections to participate. Experience as trial counsel with JOA disputes regarding COPAS accounting, elections to participate, gas balancing, removal of operators, reasonable and prudent operator standards, royalty payment disputes, administrative costs, drilling accidents, etc. Service as an arbitrator, including as the chairperson and Emergency Arbitrator, in domestic and international JOA disputes relating to work commitments, dedicated acreage, administrative costs, COPAS accounting, Development Plans, management committees. As an academic, addressed real and potential disputes arising under various form international JOAs.

Experience with offshore deepwater operating agreements, participation agreements, unitization agreements, ITP teams, Development Plans, offshore subsea production technology.

 
B. Farmout Agreements & Area of Mutual Interest Agreements, Drilling Programs
 
Substantial experience beginning in 1978 and through the present with Farmout Agreements and Farm-in Agreements. As in-house and outside counsel assisted in drafting unique provisions for Farmout Agreements. Experience as trial counsel with farmout disputes regarding recovery of drilling and operating costs, earn-in provisions and assignments, operations, mutual areas of interest, acreage dedications. Service as an arbitrator in disputes involving ownership issues arising under farmout agreements and areas of mutual interest. As an academic, addressed issues arising under international farmout agreements, including issues relating to arbitrability, choice of law, and acreage dedications.
 
C. Unitization Agreements/Unitization
 
Experience beginning in 1978 with unitization agreements, unit operating agreements, and also regulatory orders and administrative proceedings establishing drilling and spacing units, infill drilling, forced pooling, etc. Substantial background in the legal bases (e.g., prevention of waste, correlative rights issues, regulatory law) and factual bases (see “Oil & Gas Geosciences” below) for establishing and redetermining rights associated with such units. Service as an arbitrator in a dispute regarding a private unitization agreement and related issues associated with the decommissioning of gas gathering facilities. As an academic addressed issues arising under international unitization agreements.
 
D. Oil & Gas Geosciences (including reservoir engineering)
 
Significant experience, commencing in 1978 and continuing through the present, with onshore and offshore petroleum geology and reservoir engineering. Experience as trial counsel in preparing and examining reservoir engineers, geologists and geophysicists with regard to reserve evaluations, production decline, material balance equations, and seismic data. Service as an arbitrator in many arbitrations involving expert testimony by geologists and reservoir engineers.
 
E. Oil & Gas Investor Disputes
 
Broad experience, beginning in 1980, with oil & gas investors and investor disputes. As trial counsel, represented both investors and promoters in various disputes relating to oil & gas exploration and development programs, including disputes arising under limited partnership agreements and relating to such matters as accounting issues, earned and after acquired interests, performance of duties, and allegations of fraud in the inducement. Service as an arbitrator in several disputes relating either to oil & gas exploration and development programs or joint venturers in such programs.
 
F. Drilling Contracts and Service Contracts
 
Beginning in 1982, represented domestic and international drilling contractors and operators as trial counsel in disputes relating to drilling contracts and drilling operations. Also represented operators in disputes with oil & gas service companies. Represented operators in connection with drilling accidents resulting in the destruction of drilling equipment, inability to retrieve equipment, and/or loss of hole. Service as an arbitrator in arbitration proceedings involving drilling contract disputes, including disputes relating to deepwater drilling contracts.
 
G. Unconventional Drilling
 
Experience as legal counsel dating back for decades in matters concerning unconventional drilling, tight sands/tight formations, and fracking. Experience as an arbitrator in disputes relating to horizontal drilling and completion technology, the sale of producing properties in the Barnett Shale (Texas), the fabrication of fracking equipment, and long-term sales contracts governing the sale of fracking materials. Service as an arbitrator in a dispute between joint venturers regarding the development of a coal bed methane field in the Powder River Basin, Wyoming.
 
III. Oil & Gas Drilling and Completion Technology
 
A. Oil & Gas Drilling and Completions
 
Substantial background in, and knowledge of, evolving drilling technologies, including measurement while drilling, mud programs and design, sand control strategies, downhole data, managed pressure drilling, coiled tubing, completions, cementing, directional drilling, logging and logging while drilling, fracking, horizontal and multilateral drilling, well reconditioning and recompletions, casing exits, blowout preventers, subsea production infrastructure, rotary steerable systems.
 
B. Disputes Regarding Sales/Acquisitions of Drilling Technology/Oil & Gas Intellectual Property
 
Service as an arbitrator in disputes relating to the development, sale, and acquisition of oil & gas drilling technology associated with multilateral drilling, underbalanced drilling, engineering design, drilling mud systems and technology. Experience as an arbitrator in disputes involving technology testing and proving, and the patentability of newly created designs under both U.S. and UK patent law. 
 
IV. Midstream Oil & Gas
 
A. Gas Processing Contracts
 
Extensive experience, primarily as an arbitrator, with a broad variety of gas processing contracts. Service as an arbitrator in four complex large gas processing disputes relating to measurement, the terms and meaning of gas processing contracts, related gas gathering agreements and allocation agreements, and the contracting parties rights and obligations under such contracts and agreements. Experience with issues relating to orifice and ultrasonic meters, keep whole contracts, percentage of proceeds contracts, straddle plants, residue gas, etc.
 
B. Gas Processing Plant Construction, Design, and Operation
 
Acted as outside transactional counsel in the drafting and finalization of construction contracts for gas processing plant.s Experience as an arbitrator in evaluating evidence regarding the construction, design, and operation of gas processing plants. Substantial background as counsel and an arbitrator in matters relating to the supply, gathering, and transportation of natural gas to and from gas processing plants.
 
C. Gas Plant Accounting
 
Substantial background, arising from experience as an arbitrator serving in gas processing disputes, with gas plant accounting, and NGL and residue gas allocation.
 
D. Gas Processing Measurement (NGLs) and Natural Gas Measurement
 
Substantial experience arising both from experience as counsel representing both producers and pipelines and as an arbitrator serving in gas contract and gas processing disputes, with various forms of meters, meter maintenance and technology, and the measurement of flowing natural gas and liquids (NGLs) processed from natural gas.
 
E. Gas Gathering and Gas Gathering Agreements
 
Substantial experience beginning in 1978 through the present with matters regarding gas gathering, gathering line compression and maintenance, and gas gathering and transportation agreements. Experience as a trial lawyer with disputes regarding rights and duties associated with gas gathering. Service as an arbitrator in disputes regarding pressure maintenance, gas gathering quality and quantity issues, gas treatment and conditioning, cost allocations, wellhead connections, and allocations.
 
F. Production Handling Agreements, Operating Services Agreements, and Allocation Agreements
 
Experience as legal counsel and an arbitrator (as detailed above) with many areas addressed in production handling agreements, operating services agreements, and allocation agreements, including gathering, processing and treatment, and allocations. Experience as an arbitrator with offshore production handling agreements and with allocations agreements. Broad experience with disputes regarding COPAS accounting, transfer and delivery points, receiving facilities, force majeure, measurement, shrinkage and transportation and storage losses.
 
V. Downstream Oil & Gas
 
A. Gas Sales Agreements/LNG Sales Agreements
 
Beginning in 1978 and through the present, substantial experience with agreements relating to the sale of natural gas, and with transportation and exchange agreements. Involvement in matters relating to LNG sales agreements. As a trial lawyer represented both sellers and purchasers of natural gas in various gas sales contract disputes, and as an arbitrator, served in arbitrations involving various gas sales contract dispute, relating to the following:
 
1. Pricing disputes (price reopeners, price review);
2. Quantity disputes (e.g., deliverability, measurement, pipeline pressure maintenance);
3. Take or pay, take and pay;
4. Make up rights;
5. Supply interruptions and depletions;
6. Quality disputes (entrained liquids, Btu requirements, pipeline requirements);
7. Force majeure and impracticability;
8. Pipeline reservations and tolling agreements; and
9. Intervening governmental regulation.
 
Substantial experience with, and background in, the history of the deregulation and liberalization of the natural gas industries and markets in the United States and Europe (Federal Power Commission, Federal Energy Regulatory Commission (FERC), the Energy Charter Treaty (ETC)). As an academic, addressed gas sales agreement and LNG sales agreement disputes relating to pricing, quality, take or pay/take and pay, diversions, limitations on liability, measurement, mitigation sales, force majeure, etc. and their interrelationship with issues associated with international law and choice of law.
 
B. Pipeline operations and maintenance
 
Extensive experience as counsel and an arbitrator with disputes that can arise between sellers and buyers of natural gas and oil due to pipeline operations and maintenance issues (e.g., corrosion, pigging, slugs, temperature variations, wet gas and entrained fluids, etc.). Experience as a trial lawyer and arbitrator with disputes related to pressure maintenance, compression and compressors (including the purchase, sale, installation, and maintenance of turbine engines).
 
C. Pipeline and gas gathering facility design, construction, and decommissioning
 
Experience as counsel and an arbitrator with issues arising from pipeline and gas gathering facility design, construction, and decommissioning. Appointed as an arbitrator in a dispute regarding the ultimate salvage value of a major oil pipeline system and related marine terminal facilities and in a dispute involving the decommissioning and salvage of a gas gathering facility.
 
VI. Sales/Acquisitions of Oil & Gas Assets and Companies
 
Experience as a transactional lawyer with due diligence and the drafting of contracts relating to the sale of producing and undeveloped oil & gas assets and as trial counsel and as an arbitrator in disputes regarding the sale of producing and undeveloped oil & gas assets. Those disputes regarded such matters as reserve valuations and data, transfers of operator rights and duties under JOAs, assignments of contract rights and oil & gas leasehold interests, AMIs, due diligence, title, contract milestones required to be satisfied prior to the transfer of the assets, and project finance. By their very nature, disputes relating to the sale of oil & gas assets normally, at least in part, involve one or more of the other subject areas mentioned above (e.g., existing JOAs and farmout agreements, gas sales agreements, gas processing and allocation agreements, reservoir engineering and reserve analysis, production histories, etc.).

Substantial experience as an arbitrator in arbitrations involving disputes arising from the sale of oil & gas assets and related stock sales.

 
VII. Royalty and Mineral Owner Disputes
 
A. Oil & Gas Leases
 
Substantial experience, beginning in 1978 and through the present, with oil & gas leases. Represented a large royalty trust for years in the negotiation of oil & gas leases covering mineral interests located in New Mexico, West Texas, Kansas, and Oklahoma. As trial counsel, represented both lessors (royalty owners) and lessees (working interest owners) in significant disputes regarding title and the rights and duties of lessors and lessees. Experience with assignments, implied covenants, drainage of underlying reserves, etc. As a private individual or investor, leased mineral interests and also obtained assignments of overriding royalty interests and other oil & gas leasehold interests from other parties. Service as an arbitrator in disputes regarding the force and effect of oil & gas leasehold interests.
 
B. Royalty Payment and Mineral Title Disputes
 
Substantial experience as trial counsel representing both royalty/mineral owners, oil & gas leasehold owners, and gas purchasers in disputes relating to the payment of royalties and title to oil & gas and mineral interests. Early career experience dealing with mineral titles, drilling opinions and division orders, and oil & gas title examination. Lead counsel in a royalty owner class action. Service as an arbitrator in a variety of disputes indirectly involving issues regarding overriding royalties, leasehold ownership, and title.
 
 

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