David Karp discusses a bankruptcy court ruling allowing Sabine Oil & Gas Corp. to reject pipeline and gathering agreements, highlighting a significant shift in how these contracts may be treated in restructuring. He explains that the decision, which turned on whether the agreements constituted property interests or merely contractual obligations, signals that many midstream contracts tied to produced hydrocarbons may not qualify as covenants running with the land. The ruling raises increased legal and financial risk for pipeline and midstream companies, as long-term agreements once viewed as stable may be more vulnerable in bankruptcy proceedings.

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