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McKool Smith principal Willie Wood was quoted in Law360's article "What Attys Must Know About The Push For Texas Drilling Cuts."  The article discusses the decrease in oil prices due to "coronavirus-depressed" demand and how two Texas shale drillers have asked the Texas Railroad Commission to curtail oil production. Since 1973, this is the first time the RCC ordered a state-wide proration of oil production. Willie stated in the article that "Any oil production cuts ordered by the RRC would have a major trickle-down effect on pipeline and other midstream companies, whether it's agreements with producers to transport a certain volume of their oil or marketing agreements to ship certain amounts to refiners or other customers further down the supply chain. It could also impact financing deals that pipelines, terminals, and other midstream companies have secured in order to fund project development. Many of those companies depend on defined levels of oil throughput to meet the financial obligations of their lenders and could face penalties if they don't meet them. Midstream companies may be really screaming about why they're not getting throughput through their pipes. They could see lawsuits and invoices go out for unused capacity." Read the entire article here.


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