As COVID-19 continues to spread and economic uncertainty persists, many employers are implementing layoffs, pay cuts, furloughs and other operational changes that could cause them to lose the ability to enforce their noncompete agreements. Accordingly, before implementing these cost-cutting measures, it is critical for employers to evaluate how such measures could affect the enforceability of their noncompete agreements. To assist with this analysis, we outlined below the various issues employers faced with these circumstances should consider.
Plans to lease out space for domestic oil companies to store oil in the Strategic Petroleum Reserve (SPR) were announced by the U.S. Department of Energy (DOE) On Thursday, April 2. At a time when the price of oil has dropped to its lowest level in nearly two decades and demand for fuel has decreased because of travel reductions due to the COVID-19 pandemic, this decision is an important step by the federal government to support the oil and gas industry.
Akin Gump hosted a webinar on the COVID-19 crisis and how it is affecting renewable project timelines and certainty. Our industry already has lived through liquidity crunches, market volatility, supply chain uncertainty, a dearth of investors at each part of the capital stack.
A few of the topics covered during the webinar were:
- How will equipment or labor delays affect tax credit availability? How to shore up your project’s eligibility.
- How are shelter-in-place orders affecting project timelines?
- How should you respond to a force majeure notice from a supplier or contractor (and what this notice really means)?
- How is the mergers and acquisitions market for renewables projects adjusting?
To listen to the full recording of the webinar, please click here.
The Coronavirus Aid, Relief, and. Economic Security Act (CARES ACT) provides a range of actions to help address the economic fallout from the response to the COVID-19 pandemic. The CARES Act does not necessary target the energy sector but recent governmental actions still offer relief to many in the energy sector.
The domino effect of COVID-19 now threatens a new victim: oil and gas leases in the United States (“U.S.”). Since early this month, the decimation of global demand for oil resulting from the COVID-19 crisis, coupled with the glut in supply arising from the Organization of the Petroleum Exporting Countries (“OPEC”)-Russia price war, has caused a devastating collapse in the price of oil. Now, the fallout from this confluence of events presents yet another challenge for U.S. producers. Industry analysts are now forecasting that the surplus of oil produced over oil needed may soon exceed available storage. Producers that were already reducing production due to low prices are now feeling pressure to completely shut in wells. See, e.g., this article. This situation presents still another issue for producers: the risk of lease termination resulting from the shutting in of such production. This alert discusses several issues producers should consider in analyzing their leases for termination risk.
The COVID-19 crisis demonstrates the crucial role environmental, social and governance (ESG) programs play in managing the multitude of risks implicated by a global pandemic. In particular, the disruption has forced managers to develop creative, flexible solutions to address issues across the ESG spectrum, including supporting limited and largely remote workforces, maintaining compliance with operational safety and environmental commitments, and practicing good governance in an uncertain regulatory environment.
In the economic turbulence caused by COVID-19 and the Russia-Saudi Arabia oil price dispute, many energy companies’ debt is now trading well below par value. For affected companies, sinking debt valuations present an opportunity to manage their liabilities by selectively repurchasing their debt and de-levering at a significant discount. By being aware of the corporate, securities law and tax ramifications of debt buybacks, companies that are well-situated to capitalize on this window can maximize its benefit and avoid potential pitfalls.
The U.S. energy industry is grappling with one of the most dramatic economic crises in its history, wrought by the coronavirus and a global oil price war. With many exploration and production (E&P) companies substantially adjusting their capital and maintenance budgets, it is critical that all parties carefully assess their joint venture partners’ financial positions. If a joint venture partner (whether operator or nonoperator) files for bankruptcy, substantial problems for the other joint venture partner(s) may result.