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What ’ s Your Story?. Jeff Parsons Beirne, Maynard & Parsons LLP Houston, Dallas & Austin, Texas. “ El Pequeño Problema ”. Or - Deep In the Heart of Texas. El Pequeño Problema. The Prospect Generation Agreements. Clients - - Family Partnerships Rco - - E&P Co. owned by Mr. L and Mr. H
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What’s Your Story? Jeff Parsons Beirne, Maynard & Parsons LLP Houston, Dallas & Austin, Texas
“El Pequeño Problema” Or - Deep In the Heart of Texas
The Prospect Generation Agreements • Clients - - Family Partnerships • Rco - - E&P Co. owned by Mr. L and Mr. H • Clients pay Rco big $$$ fees • Rco to bring Clients oil & gas prospects • Clients can accept or reject any prospect • If accept a prospect, Clients get • 35% Working Interest • And, “proprietary interest” in Rco’s seismic maps and data on prospect
The Lopeno prospect • Rco discovers huge gas prospect • 10-12 BCF • $70-90 MM in reserves • Rco develops seismic map of Lopeno prospect • Clients accept 35% W.I. in Lopeno prospect • Rco leases Worley property to drill prospect • prepares to drill in January 2007
El Pequeño Problema • Rco - - Shows Seismic Map to various people, but no “Confid. Agmts” • With its own Ds, Os or employees • With Clients or other investors • Clients - - No “Confid. Agmts” • With Rco • With Mr. L or Mr. H • With individual family partners
The Treasure Map The Lopeno Seismic Map El Milagro Worley
El Pequeño Problema • Mr L is Chief Operating Officer of Rco • 50% owner of RCo • But, no confidentiality agreement • Mr. L , Mr. H and RCo • sign Separation Agreement (eff. 12/31/06) • Mr. L sells all interest in RCo. to Mr. H • Mr. L gets right to “compete” with RCo • Mr. R keeps 25% W.I. in Lopeno wells
El Pequeño Problema • 2007, Mr. L joins with Mr. “Cortez” • “Cortez” leases El Milagro property • Next to Worley property • Worley wells visible from El Milagro • L and C drill 4 wells on theirlease • They extract 3.6 BCF from reservoir
El Pequeño Problema • What’s Your Story?
Complex Legal Claims Misappropriation of Trade Secrets Intentional Interference with Contract Civil Conspiracy “Ds will claim” - - - “No trade secret” Seismic Map shown to investors No confidentiality agreements Worley wells public knowledge “No Interference” Claim they did not use seismic map Claim they had right to drill and compete “Big Anglo Ranchers”vs. 2 locals – 1 Hispanic Jury 100% Hispanic Legal Claims vs. “Defenses”
The Solution • A Simple Story • Ethos • Pathos • Logos • Confirmed by Jury Research • Powered by Demonstrative Exhibits
Jury Research • Important to keep promises – 100% • Business secrets are important – 95% • Important for businessmen to act fairly, ethically – 90% • When leave employer, not OK to take business secrets – 90% • Don’t need writing to warn “don’t take other’s property” - 85% • Family is very important - 90%
Plaintiffs’ Opening“This Is A Simple Case” • About “Right” vs. “Wrong” • Don’t Take What Doesn’t Belong to You • Don’t Break Your Promises • Don’t Interfere with Other’s Promises • Compete Hard but Honestly • Defendants Broke All Four Rules
“This Is A Simple Case” • “My Clients Did The Right Thing” • Kept their promises • Many family members invested small $ • So Family could invest Big $$$$$ • Family kept Lopeno secrets • Only defendants who stole secrets • Defendants’ Did the Wrong Thing • Took Family’s treasure map and secrets • Interfered with Family’s PGAs • Caused the Family $$ Millions in Damages
The Prospect Generation ContractsPX 4 & 6 Plaintiffs RCo.
Before Defendants’ Wrongful Conduct ElMilagro Worley 1 mile
After Defendants’ Wrongful Conduct ElMilagro Worley 1 mile