A South Texas jury has awarded Matrix Petroleum nearly $100 million in lost proceeds from wells in the Eagle Ford Shale, finding that exploration company Talisman Energy committed fraud through its accounting methods and breach of the Joint Operating Agreement, the Kim law firm reported in a press release.
Matrix Petroleum, which was a non-operating working interest partner with Talisman in oil production leases on the Cooke Ranch near Cotulla, Texas, was represented in the month-long trial by Houston lawyer John H. Kim. Talisman was purchased in 2015 by Spanish oil giant Repsol.
“The simple fact was that Talisman failed to provide accurate accounting on volume and revenues for more than five years,” according to Kim. “It was not an oversight or an error in record-keeping. It was a conscious business decision that robbed Talisman’s business partners of millions upon millions of dollars in its revenues from real property interests,” Kim said.
Kim’s firm reported that court records showed that shortly after acquiring interest in the Cooke Ranch fields in 2011, Talisman began drilling three wells on an adjacent lease. That left the Cooke Ranch field idle and “nearly resulted in the loss of drilling rights as work there did not begin within the required 90 days. When questioned about their actions by Matrix officials, Talisman representatives were reportedly dismissive of the concerns of their lease partners.”
Since that time, Talisman acted unilaterally “hundreds” of times on developmental and operational matters in direct violation of the production field governing documents for Cooke Ranch, including the controlling Joint Operating Agreement from 1954, the Kim press release reported.
“Through their actions and inactions, including ignoring multiple requests from Matrix for required daily drilling reports and detailed accounting statements, Talisman put the business interests of everyone in the joint operating agreement in jeopardy,” said Kim. “We are pleased that the jury recognized the exceptional arrogance central to Talisman’s business practices and did not allow them to walk away from their actions.”
“They gave us pretty much every penny we asked for,” attorney John Kim told the San Antonio Express-News.
