Dore Law - February 2021

Dore Law - February 2021

THE D

or É R eport

D ore L aw . com

FEBRUARY 2021

Resources, Noble Corporation, Siltstone Resources Operating II, Remora Petroleum, and Valaris PLC. This is only a partial list of all the new bankruptcy cases. It is unlikely that any oilfield trade creditor went unscathed by a customer bankruptcy. Everyone was affected and even the toughest credit managers were having troubles. STAFFING Late in the third quarter, we had one of our key bankruptcy attorneys give notice that she was leaving to another firm. Panic time — so it was nice no one could see us in person! Within three days, we found Vianey Garza, who previously worked with Zach McKay, our director of bankruptcy and litigation. Simultaneously, we found that Jeannie Andersen was available, formerly Judge David Jones’ bankruptcy law clerk. Now, our bankruptcy section is back up and running. I suspect that your own staffing ups and downs were similar. No matter the business, we still need competent, enthusiastic folks handling your needs. SURVIVING AND THRIVING In November, our firm’s monthly newsletter was titled “Surviving and Thriving.” So, here we are in a new year with some hope of better times and opportunities ahead. We even have new skill sets that we learned through remote working and Zoom technologies. I’ll end with these words: “Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” Benjamin Franklin (American Statesman, scientist, philosopher, printer, writer, and inventor, 1706-1790) -Carl Doré, Jr.

A LAW FIRM LOOKS BACK AT 2020

It’s Jan. 4, 2021, and I’m looking back at 2020. I’m still walking and talking, although I suspect most of us know of friends and relatives who were victims of COVID-19. While we’re not in the clear yet, there is a definite light at the end of this tunnel. I would like to share with you a little of what we experienced and the results of some actions and reactions. Although it’s true that law firms don’t always expose their underbellies, I suspect you will find this very similar to your own businesses. OUR BEST DECISION We started 2020 with one of our best first quarters ever. Hold on, not so fast. By mid- March, it was all coming undone. I had expressed some concerns to our attorneys and staff back in December of 2019 because the price of oil had dropped all that month. I realized there were not many U.S. producing wells that remained profitable after product prices fell. Beginning in late January, we decided to curtail all essential spending to conserve cash. Little did I know that April of 2020 would bring a historical decline with negative pricing, shut-in producing wells, office closings, and an upending of commercial real estate. Our decision to curtail spending was critical. Of course, if I were a real genius, I would have sold all my stocks and bonds and just waited to buy them all back at a discount. Who would have guessed the last time we saw crude prices above $50 would be Feb. 24. CASHFLOW ISSUES Our April and May were likely very similar to yours. Our oil and gas service company client base suffered because the price of crude meant their customers were unable to service debt and pay bills. The bankruptcy cycle began, as most of us predicted. Our April and May incomes failed to meet expenses, which

made the decision to watch all expenditures especially important. We went into overdrive to file mineral liens protecting past-due receivables in the oil and gas sector. The filing fee charges steadily increased, and we used a significant portion of our cash reserves. At one point, Reeves’ county clerk told us that her staff was barely able to keep up with the number of new mineral lien filings, and the district clerk had trouble with the increase in new lawsuits. THE BANKRUPTCY CYCLE Many of your customers who succumbed to Chapter 11 reorganizations included some of the most active exploration and production companies: Southland Royalty Company, Echo Energy Partners, Sheridan Holding Company, Whiting Petroleum, Sklar Exploration, Yuma Energy, Diamond Offshore Drilling, Gavilan Resources, Unit Corporation, and Templar Energy. A few of these were second-time filings, which gallows humor refers as a “Chapter 22”: Ultra Petroleum Corp. and Fieldwood Energy. Several of our favorite services companies also were part of the bankruptcy cycle: McDermott, Tank Partners Permian, Pioneer Energy Services, Carbo Ceramics, Diamondback Industries, Hornbeck Offshore Services, Anchor Drilling Fluids, and Vista Proppants and Logistics. When the June reserve redetermination began, it became evident that the value of E&P assets had dropped below corporate debt levels. The bankruptcy cycle accelerated, and the rout was in full swing. New filings included Extraction Oil & Gas, Chisholm Oil & Gas, Chesapeake Energy, Sable Permian, Lilis Energy, Hi-Crush, Calfrac Well Services, BJ Services, Patriot Well Solutions, Rosehill Resources, Denbury

281.829.1555 • 1

Published by Newsletter Pro • www.NewsletterPro.com

HAVE YOU BEEN INVOLUNTARILY EXPOSED TO BANKRUPTCY?

This February newsletter includes a separate insert page. It describes the experience one of our oil and gas company clients faced — the threat of an involuntary bankruptcy by a creditor who hired a collection agency. Since collection actions are becoming more aggressive in the current industry climate, our firm offers a tool to help you, just in case.

may help you identify a potential scammer versus a problem that should be addressed to prevent bankruptcy. In either situation, if you receive a potential threat of involuntary bankruptcy, please seek legal assistance from experienced bankruptcy counsel. The following questions are not meant to be legal advice and do not establish a client-attorney relationship. This information is only provided for your assistance and general reference until an attorney is required.

The list below provides questions to ask when your company is faced with the threat of an involuntary bankruptcy. Answers to the questions

INVOLUNTARY BANKRUPTCY EXPOSURE CHECKLIST

Who, What, Where, When, and Why

3+ Filing Creditors

• Who: Correct names of previous clients and client contacts? • What: Was the alleged work the kind that you actually performed? • Where: Does the location of the alleged work match your records? • When: Was the work performed within the last four years? • Why: Why are they requesting payment now?

Does Your Business Have 12 Clients Unpaid?

12+ Total Creditors

• Check your account payables. • Any lingering accounts: Are there some that can be resolved quickly? • Offer settlements and engage in open communications to resolve accounts.

Creditors Must have Good Faith

Good Faith

• Do your creditors know how many creditors you have? • Have you honestly tried to negotiate with multiple creditors? • Do you have defenses to claims?

2 • DORELAW.COM

Published by Newsletter Pro • www.NewsletterPro.com

STRUGGLE WITH SMALL TALK? 5 GREAT WAYS TO START A BUSINESS CALL

No matter what field or industry you're in, you'll probably find yourself in an awkward business call at some point. Starting a conversation with someone you don’t know well can be a struggle, and that’s where small talk comes in. This necessary skill helps us get to know people when deeper conversation isn’t possible or appropriate.

conversation and get to know someone in a limited amount of time. This question lets the other person decide how much to share.

NO. 3: “HAVE YOU HEARD OF WHAT [FAMOUS PERSON] IS DOING LATELY?” Talking about a celebrity’s recent movie, philanthropic efforts, or project can be a great way to open up the conversation and learn about interests you may have in common outside of work. NO. 4: “RECENTLY, I HEARD [LOCAL NEWS FACT.]” We’ll be straight: The news has become fairly political over the past few years. However, there’s always interesting local news that isn’t related to politics. Local news can be a fun way to stay in tune with the community and keep your small talk entertaining. NO. 5: “I REALLY ENJOYED HEARING ABOUT ...” When you’re trying to wind down the conversation or segue into another topic, this can be a great phrase to use to reference an interesting point in the conversation and say farewell!

Starting the conversation may feel like a lot of pressure, but with these five phrases, you’ll get the conversation flowing in no time.

NO. 1: “HOW LONG HAVE YOU BEEN IN YOUR POSITION?” Show interest in what your fellow professional does by asking about their job and how long they’ve been doing it. People’s careers and life journeys may surprise you! If they aren’t open to talking about how they landed their current position, don’t worry — there are plenty of other ways to direct the conversation. NO. 2: “ANY PLANS THIS WEEKEND/HOLIDAY?” Asking about someone’s interests, travel plans, or weekend activities not only helps you connect in the current conversation, but it also gives you a great way to start the conversation the next time you chat by following up! Ultimately, the goal of small talk is to enjoy a short

Practicing these five phrases is a small way to make a big difference in your small-talk skills.

WORD SEARCH

BALSAMIC ROASTED VEGETABLE PASTA Inspired by TheFullHelping.com

INGREDIENTS •

1/2 tbsp grapeseed oil

1 shallot, thinly sliced

• • • • • • • •

2 1/2 lbs mixed vegetables of choice, chopped into 3/4-inch pieces (parsnips, turnips, carrots, butternut squash, Brussels sprouts, etc.)

2 cloves garlic, thinly sliced 8 oz uncooked pasta 1/2 cup vegetable broth 3 tbsp balsamic vinegar

•

2 handfuls arugula

1 red onion, chopped

Salt and pepper, to taste Nutritional yeast, to taste

• •

1 tbsp olive oil

DIRECTIONS 1. Preheat oven to 400 F.

2. In a large bowl, combine grapeseed oil, root vegetables, and onion. Toss until evenly coated, then spread the mixture across two foil-lined baking sheets. 3. Sprinkle vegetables with salt and pepper, then roast them for 35–40 minutes. While vegetables are roasting, cook pasta according to package directions. 4. When vegetables are done, heat olive oil in a deep skillet over medium heat. Sauté shallots and garlic for 4–5 minutes. 5. Add the root vegetables and onion, pasta, vegetable broth, and vinegar to the pot and stir until warm. Add the arugula and cook until wilted. 6. Serve with salt, pepper, and nutritional yeast.

GROUNDHOG HEART LINCOLN MLK JR PENNSYLVANIA

AQUARIUS BLACK HISTORY CANDY CUPID

PHIL PRESIDENTS DAY VALENTINE WINTER

281.829.1555 • 3

Published by Newsletter Pro • www.NewsletterPro.com

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

17171 PARK ROW, SUITE 160 HOUSTON, TEXAS 77084 281.829.1555 • DORELAW.COM INSIDE

1 2 3

A Law Firm Looks Back at 2020

Involuntarily Exposed to Bankruptcy?

5 Great Ways to Start a Business Call

Balsamic Roasted Vegetable Pasta

4

A Guide to Workplace ‘Essentialism’

GREG MCKEOWN’S ‘ESSENTIALISM’ “If you don’t prioritize your life, someone else will,” writes Greg McKeown in “Essentialism: The Disciplined Pursuit of Less.” When he set out to write the book, McKeown wanted to know what keeps skilled, driven people from achieving as much as possible. What he found was that many people suffer not from being lazy, but from allocating their time ineffectively. The impulse to “do it all” keeps folks from spending their time on the things that actually matter. The book, then, serves as a guide to cutting out the extraneous and focusing on the essential. Doing your best work where it matters and cutting out the performance. As McKeown puts it, “It is about making the wisest possible investment of your time and energy in order to operate at superfluous will allow you to better manage your time and increase your

your highest point of contribution by doing only what is essential.” Instead of having their energy spread out in a million different directions, essentialists channel it into what really matters. McKeown also advocates for defining your purpose

“Life is not an all-you-can-eat buffet,” McKeown says. “It’s amazingly great food. Essentialism is about finding the right food. More and more is valueless. Staying true to my purpose and being selective in what I take on results in a more meaningful, richer, and sweeter quality of life.” This metaphor can be applied to your work life as well. There aren’t enough hours in the day to accomplish every task. The essentialist works to spend their time diligently by pursuing what actually matters, rather than filling their days with meaningless busywork. Early in the book, McKeown uses famed Braun designer Dieter Rams as an example of an essentialist. He notes that Rams’ design philosophy can be characterized by three simple words: less but better. This, in essence, is what essentialists believe.

in order to accurately assess what’s essential and what isn’t. The more a task contributes to your purpose, the more essential it is.

Many business owners and leaders struggle to let go of tasks that are best left to other employees. If you’ve ever found yourself struggling to manage a massive workload while resenting the fact that much of what you do is needless, then it’s time to pick up a copy of “Essentialism.”

4 • DORELAW.COM

Published by Newsletter Pro • www.NewsletterPro.com