In filing suit against a pipeline, it is important that the producer consider all claims that arise out of the pipeline's actions. For example, in the take-or-pay situation, the actions that were in breach of a take-or-pay provision may also have been in breach of other provisions of the gaspurchase contract (e.g.. a ratable-take clause); or such action (alone or in conjunction with other actions) may have constituted violations of the anrirrusr laws. The pipeline's failure to comply with the take-or-pay provision may also have amounted to an anticipatory breach of the entire gas-purchase contract.
Thus, one or more of these claims, if available to the producer, might have provided a basis for substantial damage claims in addition to the damages arising from the take-or-pay claim. Inclusion of other claims might also have proved helpful in providing leverage enabling the producer to extract an acceptable settlement. Although a pipeline might have been willing to risk litigating a gardenvariety take-or-paydamages claim, it might have been more reluctant to take on other claims and the increased exposure to substantial damages that they entailed.
Ratable-take Claims
In addition to the take-or-pay provision, many gaspurchase contracts also contain a ratable-take provision. The purpose of such a clause is to protect the producer against drainage. A typical ratable-take clause provides.
'The pipeline agrees that its takes of gas from the producer's wells will be at least ratable with production from wells belonging to others and completed in the same reservoir."
Under this clause, production from the producer's well is compared to that from all other wells completed in the reservoir, regardless of which pipeline purchases gas from such wells. Other clauses measure ratability only against those wells completed in the same reservoir that are connected to the pipeline's system.
Depending on the factual situation, a ratable-take clause might have provided an additional, and substantial, claim ~~ ~ Michael/. Hen~kraapartnerandAnnM.Ashlon isanassociate inthe Washington, DC, office of tht h w fum of Vinson & Elkins.