Mayhall Fondren Blaize

Oil and gas law litigation attacks change in company's values

A once respected oil company can undergo changes that result in its own investors bringing a suit for damages to their ownership interests. Such litigation may occur in Louisiana or other states, and it may be based on the ever-changing circumstances that may affect the managerial policies of a particular company. Major shareholders of an established company, Anadarko Oil,  recently filed oil and gas law litigation against the company.

The plaintiffs in the suit include Anadarko's former chief lobbyist and spokesperson, and five other former employees. The group is challenging the corporate responsibility and safety commitments of the company. The controversy stems from an explosion in April 2017 that destroyed a residential home and killed two residents, and severely burned two others.

The lawsuit has been filed in a federal district court in Texas. The explosion, called the Firestone disaster, occurred in the Wattenberg Field area of wells owned by Anadarko in Colorado. The company received 100,000 acres in a 2013 land swap with a competitor, Noble Energy. It obtained 1,500 oil and gas wells in the deal, which were originally drilled decades ago. Anadarko allegedly never disconnected or sealed the flow line that ran from the well up to the doorstep of the house, allowing the gas to seep into the house and ignite.

A major plaintiff and witness in the case ran all of the company's government affairs and lobbying activities until Nov. 2012. The suit says that a major change occurred in the company in 2012 when former CEO Jim Hackett resigned. The suit accuses the new CEO, Al Walker, of changing the core values of the company that were dedicated to the safety and prosperity of the communities where the company operates.

The company now allegedly operates under a culture of hard profits, wild safety risks and a lack of interest in the communities where it operates. This approach has destroyed the credibility of the company, which is publicly traded, and has resulted in damages to the shareholders. The company conducts some operations in the Gulf area and may have relevant activities in Louisiana, but the existing oil and gas law litigation does not pertain to this area.

Source: Across Colorado, CO Patch, "CO Oil & Gas: Anadarko Safety Risks Revealed In Shareholder Suit", Jean Lotus, May 9, 2018

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