Dallas in the Panhandle: Nebraska Supreme Court affirms oil driller's sale of joint venture interest over partner's objections, but reserves trial on sale of royalties. Oil driller sold its interests in drilling projects in Nebraska to outside entities. Participant in joint operating agreement countered that it had a right of refusal and also had a right to purchase part of the Driller’s overriding royalty interests. Driller sold off substantially all of its assets to more than one entity. Nebraska Supreme Court agrees that applying Texas law, the selling oil driller could sell to more than one entity substantially all of its assets without triggering the preferential rights of the other joint operating agreement participant. Summary judgment in favor of seller however reversed as to the other participants overriding royalty interests. Court upholds $6000 sanction against defendants also for failing to comply with discovery orders. Coral Prod. Corp. v. Central Resources, S-05-564

The district court determined the parties agreed in the JOA thatTexas law would govern their disputes and granted summaryjudgment to Central, E XCO, and Zecchi on Coral and K JJ’s claims of fraud, breach of contract, and tortious interference. Italso determined that the JOA did not apply to E XCO’s transfer ofoverriding royalty interests to Zecchi.We determine that Central’s sale of all of its oil and gas assetsfell within the parties’ typewritten exception to the preferentialright- to-purchase provision of the preprinted JOA. However,we conclude that the district court erred in determining Coral’spreferential right to purchase did not apply to overriding royaltyinterests. We reverse on that sole issue and affirm the districtcourt’s order of summary judgment in all other respects. We conclude that the district court did not err in determining that Central’s sale of all of its oil and gas assets fell within the parties’ typewritten exception to the preprinted preferential-rightto- purchase provision of their joint operating agreement. We also conclude that the district court did not abuse its discretion in ordering Coral and K JJ to pay attorney fees in the amount of $6,000 as a sanction for failing to produce documents that necessitated the retaking of a corporate deposition. However, we conclude that the district court erred in determining that Coral’s preferential right to purchase did not apply to overriding royalty interests and remand the cause for further proceedings on that single issue. The district court’s orders of summary judgment are affirmed in all other respects