JV Agreements Statute of Limitations

Last week, I completed the PJVA's Joint Venture Administration Course instructed by industry veteran Gloria Chase of CNRL. A great refresher on how to handle Mail Ballots, AFE's, A&D, Exhibit revisions and Agreement Maintenance. The most interesting topic for discussion for me was centered on Statute of Limitations and how the industry extended the deadline for claims to four (4) years from two (2) years under an Industry Agreement in 2001 for those companies that were paid signatories to the agreement. Consequently, it is important to look closely at older (pre-2001) agreements to determine whether or not the 4 year limitation applies, or if claims are Statute barred after 2 years. This will often require a chain of title review to confirm the status of the agreement as not every company active in the industry in early 2001 signed the Industry Agreement. Why is this important? Of late, I have seen an increasing number of cases where parties to an agreement are "discovering" un-invoiced or unpaid amounts under land and/or JV agreements that are older than 2 years, sometimes going back as far as 7 years. Without correct knowledge of the Statute of Limitations period that is allowed for making these retroactive claims, it would be easy to make a very costly mistake!