Mayhall Fondren Blaize

Oil & gas law litigation involves $1 billion dispute

Companies in Louisiana and other states that engage in oil and gas exploration may collaborate on joint ventures or other types of business relationships for mutual profit. One situation like that turned into extended litigation regarding an oil & gas law dispute that began over 10 years ago. The out-of-state case is finally coming to a head as the state court judge recently ordered the sides to start picking a jury.

The case is picking up some public attention on the heels of press reports indicating that the parties are in conflict over a damages amount as high as $1 billion. The owner of Mesa Petroleum, T. Boone Pickens, alleges that the four defendants, all oil exploration and production companies, caused him the very high damages by not reporting back to him about their oil well discoveries. He alleges that he signed a "participation agreement" with the defendants in 2007 that required the defendants to give him a 15 percent ownership in asset acquisition over a five-year period.

Mesa allegedly paid to the defendants $125,000 to join the investment agreement and a total of $1 million for participating in various projects. He alleges that the defendants conspired to conceal their theft from Mesa. The suit alleges that the defendants hid the purchase and assets of the drilling of 166 oil wells and thus they gained a total of $1billion in profits belonging to Mesa.

The defendants counter that Mesa opted out of the participation agreement. Defendants say that Mr. Pickens told Mr. Thompson (J. Cleo Thompson, who died in 2010) that he was no longer interested in receiving additional notices under the agreement. The jury will hear the details and the evidence and determine the facts that impacted the matter. The same procedure for deciding this oil & gas law matter would be applicable if the case was being tried in Louisiana.

Source: dallasnews.com, "Billion-dollar showdown: T. Boone Pickens vs. West Texas wildcatter", Mark Curriden, Oct. 31, 2016

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