UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

________________ _________________ U.S. ENERGY DEVELOPMENT CORPORATION, Plaintiff - Appellee, and
OSAGE EXPLORATION & DEVELOPMENT, INC., Plaintiff,

v. STEPHENS ENERGY GROUP, LLC, Defendant - Appellant. Nos. 15-6188 & 15-6215 (D.C. No. 5:14- CV-01319-C) (W.D. Okla.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before MATHESON , McKAY , and O’BRIEN , Circuit Judges.

________________ _________________ Stephens Energy Group, LL C (Stephens), appeals fro m two judgments of the district court. The first declared Osage Exploration a nd Development, Inc. (Osage) the Operator of certain wells in a project area governed by the terms of Participation

* After examining the briefs and appella te record, this pa nel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This or der and judgment is not binding precedent, except under the doctrines of la w of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### September 21, 2016
Elisabeth A. Shumaker Clerk of Court2 and Operating Agreements between the pa rties. A second, modified judgment substituted U.S. Energy Deve lopment Corporation (USE) for Osage as Operator. We have consolidated the appeals for pur poses of this order and judgment. We dismiss Stephens’ appeal from the first j udgment (No. 15-6188) as moot, reverse the second judgment (in No. 15-6215), a nd remand for further proceedings. BACKGROUND In April 2011, Osage, USE, and non-party Slawson E xploration Company, Inc. (Slawson) entered into a Participation Ag reement. USE and Slawson agreed to participate with Osage in th e leasing, drilling, and deve lopment of lands in which Osage held a leasehold interest, known as the Nemaha Ridge Project Area (Project Area). Under the Participation Agreement, Slawson acquired a 45 percent working interest and was named Operator of all we lls in the Project Area. USE acquired a 30 percent working interest, and Osag e a 25 percent working interest. The Participation Agreement provided that the drilling of each well in the Project Area would be governed by an Opera ting Agreement, and “[ w]here there is a conflict between the Operating Agreement a nd [the Participation] Agreement, [the Participation Agreement] will control.” Ap lt. App., Vol. II at 53. The Participation Agreement also recognized the right of each party to “assign their rights, duties, and obligations hereunder, so long as any assignment by a Party hereto is expressly made subject to the terms and cond itions herein contained.” Id. at 56.3 The parties attached an unsigned, prepri nted form of Oper ating Agreement as an exhibit to the Participation Agreement. The preprinted form contained some alterations but the parties did not actua lly prepare and sign individual Operating Agreements for individual wells or units. The form Operating Agreement, attached to the Participation Agreem ent, also named Slawson as Operator and included provisions for the Operator’s resignation or removal and the selection of a successor Operator. It provided that if the Operator “terminates its legal existence, no longer owns an interest hereunder in the Contract Area, or is no longer capable of serving as Operator, Operator shall be deemed to have resigned without any action by Non-Operators, except the se lection of a successor.” Id. at 64. Another provision, modified from the language of the sta ndard form, provided that a “transfer of Operator’s interest to any si ngle subsidiary, /or parent or successor corporation shall not be the basis for re moval of Operator.” Id. Upon resignation or removal of the Op erator, the parties were required to select a successor Operator. The successor would be “s elected by the affirmative vote of two (2) or more parties owning a ma jority interest” in the Contract Area. Id. In December 2013, the parties entered into a written and signed Partition Agreement, in which they agreed to te rminate the Particip ation Agreement and Operating Agreement as to al l lands within the Project Ar ea, except for certain Joint Venture (JV) lands. The parties agreed th at the JV lands woul d “remain subject to the Participation Agreement and [the Operating Agreement].” Id. at 117.4 In July 2014, Slawson entered into a Purchase and Sale Agreement (PSA) with Stephens. As part of the PSA , Slawson sold all of its right s, title, and interests in the Project Area—excluding overriding royalty in terests—to Stephens. Slawson agreed to transfer possession and phys ical operation of these assets to Stephens at closing, but did not guarantee that ope rations could be transferre d to Stephens. The PSA provided that “transfers of operations will be subject to all necessary regulatory and third-party approvals” and th at Slawson would “use it s commercially reasonable efforts to assist [S tephens] in becoming successor operator.” Id. at 182. Slawson subsequently executed assignments of its working interest in the units and wells within the JV lands to Stephens, and file d a form with the Oklahoma Corporation Commission purporting to assign to Stephens the right to operate the units and wells within the JV lands. Relying on the Operating Agreement, Osage then asserted that Slawson’s assignment of its interest in the Project Area to Stephens should be deemed Slawson’s resignation as Operat or. Osage proposed that a new Operator be selected. On November 5, 2014, USE and Osage voted to select Osage as su ccessor Operator. Stephens, successor to Slawson’s intere st under the PSA, refused to turn over possession of the units, wells, and records within the JV lands as Osage requested. Osage and USE then filed this suit in state court, seeking a declar atory judgment that Osage is the succes sor Operator and enjoining St ephens from conducting operations of any well or unit properly operated by Osage. Stephens removed the suit to federal

court.5 The parties filed cross-motions for su mmary judgment. The district court granted summary judgment in favor of Osag e and USE, denied St ephens’ motion, and entered a judgment providing injunctive relief to Osage and USE. It determined that the Operating Agreement had b een incorporated in to the Participation Agreement and that the intent of the par ties must therefore be determ ined from the text of both documents. The Operating Agreement set out the terms for changing the Operator and the district court determined that those provisions must be given effect. Although Stephens argued that the position of Operator was an assignable right as contemplated by the Participati on Agreement, the district c ourt opined that nothing in the Participation Agreement indicated the parties intende d to treat the position of Operator as an assignable ri ght, and noted that Stephens cited no law to support its assertion. The district c ourt concluded that the contra ctual documents showed that the parties intended the term “Operator” as a position of re sponsibility, not an assignable right. Finally, it determined th at “Osage was properl y selected as the successor Operator by a majori ty interest in the Projec t Area, as required under the Operating Agreement.” Id. , Vol. IV at 371. Stephens appealed from the judgment, resulting in Appeal No. 15-6188. Three days after the district court entered its judgment, Osage resigned as Operator. Stephens s ubsequently moved for a modificati on of the judgment. It noted Osage’s resignation as Operator and that USE had been elec ted as the new Operator. The district court entered a modified judgment declari ng USE the Operator of the wells in the Project Area, enjoining Stephe ns from conducting oper ations of any well6 or unit properly operated by USE, and requi ring Stephens to turn over to USE all records and data necessary for USE’s pe rformance of its du ties as Operator. Stephens then filed an amended notice of appeal, resulting in A ppeal No. 15-6215. DISCUSSION “We review the district court’s summar y judgment decisions de novo, applying the same standard as the district court.” Digital Ally, Inc. v. Z3 Tech., LLC , 754 F.3d 802, 810 (10th Cir. 2014). “Under this st andard, ‘[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P. 56(a)). 1. Appeal No. 15-6188 is Moot In No. 15-6188, Stephens appeals from the district court’ s judgment, which declared Osage operator of the wells “which have been drilled and which are hereafter drilled in the Project Area pursuan t to the terms of th e Participation and Operating Agreements,” and enjoined Stephens “from conduc ting operations or retaining records with respect to any unit or well in whic h Osage is the duly elected Operator.” Aplt. App., Vol. V at 372. The district court’s amended judgment, now in effect, substituted USE for Osage as Operator and enjoined Stephens from conducting operations or retaining records pertaining to units or wells operated by USE rather than Osage. “We have no subject-matter jurisd iction if a case is moot.” Rio Grande Silvery Minnow v. Bureau of Reclamation , 601 F.3d 1096, 1109 (10th Cir. 2010). “The7 crucial question is whether granting a present determination of the issues offered will have some effect in the real world.” Id. at 1110 (internal quot ation marks omitted). In light of the amended judgment, the parties do not argue th at the superseded judgment in favor of Osage, which or dered only prospectiv e declaratory and injunctive relief, has any further real-wor ld consequences. Ne ither Osage nor USE has cross-appealed from the district court’s modified judgment to challenge the substitution of USE for Osage. Moreover, as will be explaine d, Osage no longer holds an interest in the subj ect-matter of this appeal. Appeal No. 15-6188 is moot and will be dismissed. 2. Appeal No. 15-6215 Should Not be Stayed Due to Osage’s Bankruptcy After Stephens filed its opening br ief, Osage filed its Suggestion of Bankruptcy in this court, noting that Osag e had filed a voluntary petition for relief under Chapter 11 on February 3, 2016, and arguing this action wa s subject to the automatic stay under section 362( a) of the Bankruptcy Code. On May 2, 2016, Osage notif ied this court that it no longer owned a justiciable interest in the subj ect matter of this a ppeal—presumably because a pending sale of Osage’s assets that were im pacted by this action, whic h had been approved by the bankruptcy court, was completed. See Aplee. Br. at 28 n.2 ( noting pending sale of Osage’s assets). Thus , Osage is no longer a real party in interest in this appeal and its bankruptcy need not further de lay our disposition of the case. Although Osage and USE suggested in th eir brief that it would be necessary and appropriate to substitute the purchaser of Osage’s as sets for Osage as a party8 once the sale was complete, no party has c onfirmed the identity of the purchaser of Osage’s assets, no party ha s moved to substitute the purchaser as a party, see Fed. R. App. P. 43(b), and no one has entered an appearance on behalf of the purchaser. In light of the district court’ s substitution of USE for Osage as Operator, and USE’s continuing standing to assert its status as Oper ator, there appears to be no further reason to stay this appeal. 3. Stephens Did Not Waive its Right to Appeal The appellees argue that by calling for an election after Osage resigned as Operator, Stephens conceded that the te rms of the Operating Agreement calling for an election upon the Operator’s resignation governed this di spute. They assert that by its call for an election, Stephens wa ived its argument that the resignation and election provisions did not control succession of the Operator after Slawson’s sale of its interest to Stephens. Th is argument la cks merit. Stephens called for an election of a su ccessor Operator b ecause it believed Osage was insolvent and unquali fied to serve as Operator. Under the district court’s injunctive order then in effect, Stephens could not have reas onably responded to Osage’s situation by st ubbornly insisting on its right to be reinstat ed as successor Operator based on the assignment from Slawson. The use of an el ection to select a successor Operator to Osage, which had un equivocally resigned as Operator, was a very different set of circumstances than thos e that led to the curr ent dispute on appeal involving a purported a ssignment of the Operator position in connection with the sale9 of the Operator’s interest in the Project Area. Stephens did not waive its right to appeal. 4. Successor Operator Und er the Parties’ Agreement The Participation Agreement provides that it will be governed by and construed in accordance with Oklahoma law. Aplt. App., Vol. II at 56. “In Oklahoma, as in most jurisd ictions, the paramount objective of contract interpretation is to effectuate the intent of the parties as expressed by the terms of the contract.” Walker v. Builddirect.Com Techs., Inc. , 349 P.3d 549, 552 (Okla. 2015). “Thus, unambiguous, clear, and consiste nt contract terms will be en forced as written to carry out the expressed inten tion of the parties.” Id. The district court determined that the parties’ agreement was unambiguous, and the parties agree. The district cour t noted that the Oper ating Agreement had been incorporated into the Participation Ag reement and found that the intent of the parties must therefore be de termined from the text of bot h documents. The Operating Agreement set out the terms for changing the Operator and the district court determined that those provisi ons must be given effect. It reasoned as follows: Viewing the agreement as a whole and “each clause help ing to interpret the others,” it is clear that th e Participation Agreement and the Operating Agreement de signate Slawson as Operator and that the Operating Agreement sets out the gui ding terms for the changes in that position in the future. Defendant’s in terpretation of the contract would render the operator resignation and se lection clauses in the Operating Agreement meaningless. Such construc tion is to be avoided pursuant to 15 Okla. Stat. § 157. Furthermore, Defendant’s argumen t is dependent on a determination that the position of Operator is an assignable right contemplated under the Participation Agreement. However, nothing in the Participation Agreement indicates an intent of the signing parties to10 treat the position of Operator as an assignable right, and Defendant has provided no law supporti ng this assertion. Pl aintiffs assert that Operator is a position of respons ibility and not a contractual and assignable right. To support this argum ent, Plaintiffs cite 52 Okla. Stat. § 86.1(h), which states that “[t]he term ‘operator’ shall mean any producer of oil or gas who has dr illed a well or we lls into a common source of supply and is engaged in operating such well or wells for the purpose of producing oil or gas therefrom.” Under Oklahoma law, custom and usage should be considered when interpreting a contract. Applying the standard industry defi nition provided above to the term “Operator” in the Participati on Agreement and the Operating Agreement, the Court finds that the parties intended the term “Operator” to connote a position of responsibility and not an assignable right. Based on the reasoning above, the C ourt finds that no conflict between the assignment clause and the ope rator resignation clause exists. Aplt. App., Vol. IV at 369-70 (citations , brackets, and internal quotation marks omitted). A. Plain Language of the Agreement The district court thus re jected Stephens’ contention that the Operator position could be freely assigned for two reasons, neither of whic h can withstand scrutiny. First, the district court f ound that “nothing in the Partic ipation Agreement indicates an intent of the signing parties to treat the position of Operator as an assignable right,” reasoning that Ste phens “has provided no law s upporting this assertion.” Id. at 369. But this analysis improperly shifted the burde n on the assignability issue to Stephens. Oklahoma law presumes that contract ual rights and duties are assignable, unless the parties provide otherwise in th eir agreement, or unless the duty is so specialized that the identity of the performing party is material to the contract. See, e.g. , Beattie v. State ex re l. Grand River Dam Auth. , 41 P.3d 377, 38111 (Okla. 2002) (“Oklahoma has long held that rights under a contract are presumed to be assignable, unless the part ies expressly provide otherwis e. . . . Oklahoma case law has also recognized that cer tain rights and duties are t oo personal in character to permit them to be assigned.”) . Appellees fail to show that either exception applies here. Stephens cited unambiguous language in the Participa tion Agreement in support of its claim that the Oper ator right or dut y was assignable: Subject to the other provisions of th is Agreement, this Agreement and all provisions hereof shall inure to the benefit of and be binding upon not only the Parties, but their respec tive heirs, successors, and assigns. The Parties may assign their rights, duties, and obligations hereunder, so long as any assignment by a Part y hereto is expressly made subject to the terms and conditions herein contained. Aplt. App., Vol. II at 56 (emphasis added). Appellees draw our attention to la nguage in the Operating Agreement’s resignation clause, calling for election of a new Operator when the Operator no longer has an interest in the Project Area. Id. at 64. 1 But to the extent that language could be read to overcome the presump tion of assignability by precluding Slawson from assigning the right to serve as Operator as part of a sale of its interest in the Project Area, it conflicts w ith the language in the Part icipation Agreement making the parties’ rights, duties and obligati ons—not excluding the right to serve as

1 Appellees also cite a provision of th e Operating Agreement that specifically struck language permitting transfer of the Operator’s inte rest to a successor corporation without rem oval of the Operator. See Aplee. Br. at 21 (citing Aplt. App., Vol. II at 64). To the ex tent this language precludes fr ee assignment of the right to serve as Operator, it is further evidence of the conflict between the Participation Agreement and the Operating Ag reement, which the parties agreed would be resolved in favor of the provisions of th e Participation Agreement.12 Operator—freely assignable. Although the Particip ation Agreement and the Operating Agreement must be considered t ogether as parts of a single transaction,

see Okla. Stat. tit. 15, § 158, the parties una mbiguously agreed that where a conflict existed between the two writings constituti ng their agreement, the language in the Participation Agreement would govern. 2 Thus, the record fails to support the district court’s conclusion that the pl ain language of the agreemen t made Slawson’s right to serve as Operator unassignable. B. “Custom and Usage” in the Oil and Gas Industry The district court also cited “custom and usage” in the oil and gas industry, which purportedly would treat the positi on of Operator as a “position of responsibility” rather than an assignable right. Aplt. App., Vol. IV at 369. Leaving aside the fact that the part ies’ agreement permitted them to “assign their rights, duties, and obligations hereunder,” id. at 56 (emphasis added)—language which appears to include the assignment of a pos ition of responsibility as well as a right— we do not find the district c ourt’s reasoning concerning cust om and usage persuasive. Oklahoma law provides that “[t]he words of a contract are to be understood in their ordinary and popular sens e, rather than according to their strict legal meaning, unless used by the parties in a technical sense, or unless a special meaning is given to

2 Appellees note that any assignment of Slawson’s interest was “expressly made subject to the terms and conditions herein c ontained,” Aplt. App., Vol. II at 56, and that Slawson’s right to serve as Operator was expressly limited by the terms of their agreement. One of these te rms and conditions, of course, was that in the event of a conflict between the Partic ipation Agreement and the Operating Agreement, the Participation Agreement would govern.13 them by usage , in which case the latter must be fo llowed.” Okla. Stat. tit. 15, § 160 (emphasis added). It also provi des that “[a] contract is to be interpreted according to the law and usage of the place where it is to be performed, or, if it does not indicate a place of performance, according to the law and usage of the place where it is made.” Id. § 162 (emphasis added). The question is whether usage in the oil and gas industry gives the term “Operator” a special m eaning that excludes it from the general presumption that contractual rights and duties are freely as signable. Such a usage has not been established here. As evidence of industry “custom and usage,” the district court cited Okla. Stat. tit. 52, § 86.1(h), a provision of Oklahoma’s Oil and Gas Conservation Act defining the term “Operator.” Th at provision (curren tly renumbered as § 86.1(8)), reads: “‘Operat or’ means any producer of o il or gas who has drilled a well or wells into a common s ource of supply and is engaged in operating the well or wells for the purpose of producing oil or ga s therefrom[.]” The district court found that this language provided evidence that an “Operator” position is not an assignable right. But we fail to discern such a sp ecial meaning in the quoted language. To define an Operator with re ference to its duties or f unctions does not preclude the assignment of the right or responsib ility to serve in that capacity. Moreover, Oklahoma Supreme Court prece dent specifically precludes use of the definition in § 86.1(h) to establish industry custom or us age for purposes of construing a private contract. In Pitco Production Co. v. Chaparral Energy, Inc. , 63 P.3d 541 (Okla. 2003), the Oklahoma S upreme Court discussed whether it could14 consider oil and gas industry usage to dete rmine whether the term “Operator” used in the parties’ operating agreement permitted th e existence of multip le operators within a single unit. The court determined fo r a number of reasons that it should not consider industry usage in re solving this question. First—as in this case—the terms and provisions of th e parties’ agreement were unambiguous. Second, the term “Operator” carried no technical significance in the oil and gas industry, and ther efore required no evidence of industry usage to clarify the term. The court concluded that “[ b]ecause we hold the [Joint Operating Agreement’s] terms plain and unambiguous, we cannot c onsider Pitco’s adduced proof that it is common industry practice to allow more than one operator per unit
area.” Pitco , 63 P.3d at 547. Most significantly, in a footnote to it s decision, the Oklahoma Supreme Court cited the same statutory definition of “Operato r” that the district court cited in this case, and opined that “[t]he Oil and Gas Conservation Act, 52 O.S. 1991 §§ 86.1 et seq., does not affect the c ontroversy before us because it applies to the regulatory power of the Corporation Commission, and the dispute here is a private-law matter

. This general description of an ‘operato r’ neither provides nor requires specific, technical knowledge to further illuminate the meaning of the term.” Pitco , 63 P.3d at 546 n.24 (emphasis added). The same reasoning precludes th e district court’s reliance on the “Operator” definiti on in § 86.1(8) in this case. We can easily distinguish the other Ok lahoma cases appellees cite purporting to show the status of Operator is not a vested and assignable right. In both Oxley v.15 General Atlantic Resources, Inc. , 936 P.2d 943, 944 (Okla. 1997) and Duncan Oil Properties, Inc. v. Vastar Resources, Inc. , 16 P.3d 465, 467 (Okla. Ct. App. 2000), the parties’ operating agreements unambiguo usly provided for an election for a new Operator if the existing Operat or sold his interest in the unit. That is not the case here. Crest Resources & Exploration Co rp. v. Corporation Commission , 617 P.2d 215 (Okla. 1980), is also not on point because that case concerned the Oklahoma Corporation Commission’s use of police pow er in a forced pooling situation. See id.
at 217-18. C. Meaningfulness of Resi gnation and Selection Clauses Oklahoma law provides that a contract must be construed “so as to give effect to every part, if reasonably prac ticable.” Okla. Stat. tit. 15, § 157. The district court stated that Stephens’ interpretation of the parties’ agreement, which permitted Slawson to assign its contractual right to serve as Operator to Stephens, would “render the operator resignati on and selection clauses in the Operating Agreement meaningless.” Aplt. App., Vo l. IV at 369. In their a ppellate brief, the appellees argue strenuously that Stephe ns’ interpretation essentially nullifies these clauses.
See Aplee. Br. at 10; see also id. at 17 (arguing Stephens’ interpretation requires that Slawson’s successors must be appointed Operator in perp etuity, and will remain as Operators “forever without a ny mechanism to remove or re place the Operator even if the Operator were to declare bankruptcy, sell its working interests, or commit bad acts.”); id. at 21 (“If Stephens’ argument is correct, Non-Operators would be16 prevented from ever calling for an electi on.”). But these arguments misread the parties’ agreement. Contrary to appellees’ contentions, giving effect to the partie s’ agreement that rights and duties under the Participation Ag reement were freely assignable does not render meaningless the provisions permittin g removal of an Operator for good cause, deeming a bankrupt or insolven t Operator to have resigned, or permitting an Operator to voluntarily resign by giving written notice. Appellees fail to show that Stephens’ claim that Slawson possessed an assigna ble “right” fails me rely because the continued exercise of th at right was conditioned on financial stability or good conduct, or because Slawson could choose to forego the right by resigning. Under the circumstances presented here, St ephens’ interpretation concerning free assignability affects only the situation wh ere a conflict arises because an existing Operator sells its rights and th erefore no longer owns an intere st in the Contract Area. Adopting Stephens’ interpretation does no t make even the clause deeming an Operator to have resigned when it no longer holds an interest, meaningless

. Notwithstanding the parties’ intent to permit free as signability of the Operator position, the clause could still permit a deem ed resignation, followed by an election. For example there could be a post-resigna tion election in circumstances where an Operator lost its interest in the Project Area without purporting to transfer the right to serve as Operator to a qualified successor.17 CONCLUSION
Appeal No. 15-6188 is dismi ssed as moot. In Appeal No. 15-6215, we reverse the judgment of the district court and remand for further proceedings.

Entered for the Court
Monroe G. McKay Circuit Judge