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MIECO LLC v. Pioneer Natural Resources USA Inc.
Following remand from the Fifth Circuit, the Northern District of Texas conducted a bench trial on whether Pioneer Natural Resources properly invoked force majeure to excuse non-delivery of 20,000 MMBtu/day of Permian Basin gas during Winter Storm Uri's February 2021 freeze-offs. The court found Pioneer did not breach its NAESB Base Contract Firm delivery obligations to gas trader MIECO, resolving disputed material facts regarding whether performance was actually prevented and whether Pioneer exercised due diligence under Section 11 of the parties' contract.
Analysis
Fifth Circuit Holds 'Prevent' in Force Majeure Clauses Requires Only Impracticability, Excludes Expert Testimony on Contract Interpretation
Fifth Circuit affirmed that Winter Storm Uri constituted force majeure excusing Pioneer Natural Resources' failure to deliver contracted gas volumes, holding that 'prevent' in force majeure clauses requires impracticability rather than literal impossibility of performance. The panel also excluded buyer Mieco's expert witness who offered testimony on the meaning of contractual terms, reaffirming that contract interpretation is a question of law for the court.
District Court Rules for Pioneer in Winter Storm Uri Force Majeure Dispute Over Firm Gas Delivery Obligations
Following remand from the Fifth Circuit, the Northern District of Texas conducted a bench trial on whether Pioneer Natural Resources properly invoked force majeure to excuse non-delivery of 20,000 MMBtu/day of Permian Basin gas during Winter Storm Uri's February 2021 freeze-offs. The court found Pioneer did not breach its NAESB Base Contract Firm delivery obligations to gas trader MIECO, resolving disputed material facts regarding whether performance was actually prevented and whether Pioneer exercised due diligence under Section 11 of the parties' contract.