Recently, the Bankruptcy Court for the Southern District of New York issued an opinion in In re Sabine Oil & Gas Corp. that permitted the debtor, Sabine Oil & Gas Corporation ("Sabine") to reject certain gathering and condensation agreements as executory contracts under 11 U.S.C. § 365. Because the midstream service sector finances the construction of pipelines, the costs of which are recovered over the life of gathering agreements, the Court’s decision has the potential to lead to considerable upheaval in the energy sector.

Sabine, the representative debtor for some ten other corporate entities (collectively, the "Debtors"), is engaged in the acquisition, production, exploration, and development of onshore and natural gas properties in the United States. Following the merger of Sabine Oil & Gas, LLC and Forest Oil Corporation, Sabine became a party to two contracts with Nordheim Eagle Ford Gathering, LLC ("Nordheim").