Oklahoma Natural Gas Asks Court to Reinstate Defense / in Forest Oil Case

Article excerpt

A motion to reinstate a defense in a natural gas lawsuit filed by Forest Oil Corp. has been filed by Oklahoma Natural Gas Co. in Caddo County District Court, ONG announced Thursday.

ONG, a division of Tulsa-based ONEOK Inc., had the "commercial impracticability" defense and several other defenses, including force majeure and conservation law, stricken by the judge in October.

Efforts to have the defenses reviewed by the Oklahoma Supreme Court failed March 3 when the justices refused to order the district court judge to reinstate the defenses for a jury trial or to hear the case themselves.

The latest request stems from the high court's actions in another natural gas contract lawsuit brought against an ONG affiliate.

While the justices ruled out the use of a "commercial impracticability" defense in Golsen v. ONG Western Inc., they "gave an indication that the defense of `commercial impracticability' should be considered in certain other take-or-pay contract disputes," ONG said.

The take-or-pay clause called for ONG to take a certain volume of natural gas or pay for that volume and take it at a later date.

The "commercial impracticability" defense, the natural gas utility said, "asserts that after the Forest contract was signed, events occurred that were unforeseeable at the time by both parties.

"The events so completely changed the nature and extent of the obligations represented by the take-or-pay and price-redetermination provisions of the Forest gas purchase contract that complying with them would threaten Oklahoma Natural's financial viability," ONG said.

Justices Yvonne Kauger and Marian P. Opala, the ONG request stated, "recognized that under appropriate factual circumstances, the `commercial impracticability' defense `may provide viable questions of fact for the jury' in gas purchase contract cases. …