» Texas Oil and Gas Attorney with Law Offices of Gregory D. Jordan Comments on Breach of Contract Case

Texas Oil and Gas Attorney with Law Offices of Gregory D. Jordan Comments on Breach of Contract Case

Austin, TX (Law Firm Newswire) August 14, 2013 - An oil and gas company has filed a lawsuit against a drilling company, alleging breach of a contract to drill three wells.

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin Oil and Gas Attorney, Gregory D. Jordan

Conquistador Petroleum filed the lawsuit against E&B Natural Resources Management Corp. on April 5, 2013 in Jefferson County District Court. Francesco Galesi is also named as a defendant.

Conquistador claims that E&B owes it hundreds of thousands of dollars because it failed to fulfill its contract to drill three wells on a 22-acre property, after one hole was found to be dry. Conquistador claims it invested $600,000 in obtaining seismic data for the planned wells in the North Port Acres Prospect and spent $4 million more afterwards.

“Drilling for oil and gas has inherent risks,” says Gregory D. Jordan, an Austin, Texas oil and gas attorney. “Companies should plan exploration and structure contracts in a way that anticipates various potential outcomes. Sometimes your crystal ball may be a bit cloudy, so it’s important to consider the impact a bad well may have.”

Conquistador claims it acquired the seismic data in 2006 and 2007, and the two companies signed an exploration agreement on May 1, 2008, under which E&B would drill three wells to a depth of 10,500 feet. According to the complaint, E&B's performance under the contract was guaranteed by Galesi.

The lawsuit states that Conquistador obtained a license allowing E&B to drill the wells using the seismic data, but E&B did not drill the first well by the September 1, 2008 deadline. That deadline was extended.

According to the complaint, after reviewing the seismic data, the two companies amended their agreement such that E&B would drill two wells to a depth of 16,500 feet instead of the three shallower wells. The first well was drilled in the fall of 2010, but it was dry and was therefore plugged in November of that year. The lawsuit alleges that E&B failed to drill the second well and requested termination of the agreement after all the leases expired in 2012. The complaint further claims that E&B failed to pay lease maintenance costs as agreed.

“E&B may have some problems if its drilling agreement did not allow it to back out in the event of a bad first well,” notes Jordan. “We will have to see how E&B tries to justify its actions.”

Conquistador is seeking reimbursement for its sunk costs, which total $2.3 million, as well as $600,000 it invested in obtaining seismic data. The plaintiff is seeking actual damages, attorney's fees, costs, and interest. The case has been assigned to Judge Donald Floyd of the 172nd District Court.

To learn more visit, http://www.theaustintriallawyer.com.

Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
Call: 512-419-0684

Other Practice Areas offered by the Law Offices of Gregory D. Jordan:

  • Business litigation
  • Employment law
  • Oil and gas law
  • Patent, trademark and copyright litigation
  • Real estate and construction litigation
    • Texas appeals court’s decision shows importance of wording in noncompete agreements
      A recent decision by a Texas appeals court demonstrates that the wording of a noncompete agreement must be precise. In the case, East Texas Copy Systems, Inc. v. Player, the Court of Appeals in Texarkana ruled that a noncompete agreement was nonbinding due to the language used in the agreement. As part of the sale [...]
    • Texas property owners file class-action suit against Devon Energy over royalties
      A class-action lawsuit has been filed by Texas property owners alleging that Devon Energy used sham transactions to underpay natural gas royalties. On January 6, class-action status was granted by U.S. District Judge Ed Kinkeade in Dallas, allowing the four individuals who brought the lawsuit to represent the interests of thousands of landowners. The judge [...]
    • Investment firms sue oil company, alleging breach of contract
      An oil company was sued by two investment firms in Harris County District Court in Texas over an alleged breach of contract. SSG Advisors, LLC and Chiron Financial LLC filed the lawsuit against Daybreak Oil and Gas Inc., claiming that Daybreak violated an agreement among the three companies. The investment firms claim they are owed [...]

    See other news sources publishing this article. BETA | Tags: , , , , ,

    Get headlines from Law Firm Newswire sent right to your inbox.

    * indicates required