TIPRO: Legacy Lawsuit Update

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  • As of January 6th, 68 rigs in N. LA, down from 139 in April 2010.\n\nSome may look at this as a gloomy picture but please look at what ran in 2000 - we are almost triple that now.\n\nNot many of us (Maybe Dickie) were interested back in 1992 when there were (yes) 5 rigs running in N. LA. \n\nFluctuations dictated by market prices... Market is king.\n
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  • Penalties and interest reased total award to over $70 million\n
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  • Presentation by Bill Grffin to the South Texas College of Law, Energy Law Institute for Attorneys and Landmen, Sept 2006\nThe next four slides are exact copies of his presentation “Legacy Liability in Louisiana”\n
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  • TO DATE\n61 CASES SUBMITTED ENVIRONMENTAL DATA TO THE OOC\nCONSERVATION HAS NOT,RECEIVED ENVIRONMENTAL TEST DATA IN 210 (78%) OF THE 271 CASES\n
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  • Respondents also name NO as one of the worst court systems in the nation, tied for tenth.\n1,482 general counsels and senior attys or executives in companies with annual revenues of at least $100 Million.\n67% of those question said a states lawsuit environment is likely to impact important business decisions at their company.\n
  • TIPRO: Legacy Lawsuit Update

    1. 1. STATE OF LOUISIANA No. 1Oil & Gas Industry Issue
    2. 2. Source - Legacy Liability in Louisiana corbello• $33,000,000 clean up costs for 120 acres (valued at $108,000)• Don’t have to use money to clean up• $4,000,000 for attorney fees
    3. 3. Source - Legacy Liability in Louisiana “Legacy Liability In Louisiana” South Texas College of Law Energy Law Institute for Attorneys and Landmen Sept 2006
    4. 4. Source - Legacy Liability in LouisianaWhat is a legacy lawsuit?Plaintiffs A lawsuit to recover damages and clean up costs associated with big oil screwing up the environment since the 1930’sDefendants Residual lawsuit after the royalty payments have become small or have ceased
    5. 5. Typical Legacy Lawsuit Chronology 33 Defendant sExxon Mobi l C orp. ; C hev ron U . S . A . , Inc . ; Mc C urdy O i l C o. ; C i nder P roduc t i on C o. ; Got ham 1985, LP ; Monroe Wel l S e rv i c e , Inc . ; Vi s t a C orp. ; J A S A , Inc . ; R os s Expl ora t i on, Inc . ; Trickle Down Oil, Inc.; Omega Energy, Inc.; Standard P roduc t i on C o. ; B a rnwe l l O i l C o. , Inc . ; B e rry P e t rol e um C o. ; C el eron O i l & Gas C o. ; P hoeni x O perat i ng C o. , Inc . ; S out hern O i l & Ga s C o. ; B a y ou S t a t e oi l C orp. ; EO T T Ene rgy C orp. ; A bne y O i l C o. , Inc . ; F rog Is l a nd, LLC ; Le ga c y R e s ourc e s C o. , LP ; C al umet Lubri c ant s C o. , LP ; J . C . Trahan D ri l l i ng C ont rac t or, Inc . ; S hal l ow O i l C o. , Inc . ; H i l l i ard P et rol eum, Inc . ; Ly ons , H i l l i ard & Wat s on, Inc . ; Three S i s t ers P et rol eum Inc . ; F ai t h Energy , LLC ; New A meri c an P et rol eum A s s
    6. 6. Source - Legacy Liability in Louisiana How do i locate areas where i maysuccessfully litigate for environmental damages? Step 2 Locate these babies Locate the old fields that were producing during the early periods when open pits were used. Prepare an operator-ship chronology to insure at least one deep pocket is on the hook. If not place project on shelf for later consideration, if any.
    7. 7. Legacy Suits Growth after Corbello 2002• Since Corbello, 271 suits • OOC has not received have been filed with more environmental test data in than 1,500 defendants 210 (78%) of the 271 cases• In 2006 Legislature passed • Districts courts have Act 312 in attempt to implemented ACT 312 handle lawsuits and move differently than was remediation forward intended by the legislature.• To Date 61 cases • Insurance companies are submitted environmental now denying insurance to data to the OOC companies in Louisiana, but not in Texas and Mississippi
    8. 8. 2010 Louisiana Top Crude Producers Defendants in Legacy Sites CasesRank Company Name Crude Oil 29 YUMA E&P 235,978 1 HILCORP ENERGY COMPANY 7,514,204 30 CONOCO PHILLIPS - BURLINGTON 232,748 2 SWIFT ENERGY OPERATING 3,866,557 31 ROYAL PRODUCTION COMPANY 226,546 3 TEXAS PETROLEUM INVESTMENT 2,103,542 32 AXIS ONSHORE 223,753 4 GULFPORT ENERGY CORPORATION 1,979,024 33 TORZA OPERATING 223,473 5 HELIS OIL & GAS COMPANY 1,827,009 34 MARINER ENERGY 210,940 6 CHEVRON U.S.A. 1,803,450 35 RODESSA OPERATING 209,809 7 XTO ENERGY 1,623,189 36 ALTA MESA SERVICES 209,195 8 APACHE CORPORATION 1,407,190 37 NEUMAN PRODUCTION COMPANY 207,909 9 MIDSTATES PETROLEUM 1,237,643 38 MUNOCO COMPANY 200,421 10 DENBURY ONSHORE 1,214,470 39 LIBERTY RESOURCES 189,752 11 STONE ENERGY CORPORATION 1,120,626 40 PRIZE PETROLEUM 189,681 12 ENERGY PARTNERS 950,011 13 DEVON ENERGY PRODUCTION 839,683 41 BRIDWELL OIL MANAGEMENT 189,318 14 FOREST OIL CORPORATION 750,649 42 J.P VANWAY . 185,832 15 ENERGYQUEST II 715,279 43 INEXCO OIL COMPANY 184,943 16 MARITECH RESOURCES 621,248 44 CASTEX ENERGY 179,295 17 COX OPERATING 572,574 45 JUSTISS OIL COMPANY 172,336 18 MCGOWAN WORKING PARTNERS 554,739 46 SUNLAND PRODUCTION 167,080 19 DUNE OPERATING COMPANY 553,788 47 NOBLE ENERGY 165,203 20 LOBO OPERATING 538,227 48 SOUTHERN BAY OPERATING 164,704 21 MILAGRO EXPLORATION 483,659 49 JAG OPERATING 154,588 22 CENTURY EXPLORATION 448,427 50 JGC ENERGY 146,570 23 DIMENSION ENERGY CO 333,523 24 BOPCO 328,890 STATE TOTAL PRODUCTION 49,114,795 25 THE MERIDIAN 281,658 TOP 50 TOTAL CRUDE OIL PRODUCTION 79% 38,715,580 26 CLAYTON WILLIAMS ENERGY 277,008 TOP 50 WITH LEGACY CASES 27,663,975 27 PETRO-HUNT 257,827 TOP 50 PERCENTAGE WITH LEGACY 56% 28 THREE SISTERS PETROLEUM 242,412
    9. 9. 2010 Louisiana Top Crude Producers Defendants in Legacy Sites CasesRank Company Name Crude Oil 29 YUMA E&P 235,978 1 HILCORP ENERGY COMPANY 7,514,204 30 CONOCO PHILLIPS - BURLINGTON 232,748 2 SWIFT ENERGY OPERATING 3,866,557 31 ROYAL PRODUCTION COMPANY 226,546 3 TEXAS PETROLEUM INVESTMENT 2,103,542 32 AXIS ONSHORE 223,753 4 GULFPORT ENERGY CORPORATION 1,979,024 33 TORZA OPERATING 223,473 5 HELIS OIL & GAS COMPANY 1,827,009 34 MARINER ENERGY 210,940 6 CHEVRON U.S.A. 1,803,450 35 RODESSA OPERATING 209,809 7 XTO ENERGY 1,623,189 36 ALTA MESA SERVICES 209,195 8 APACHE CORPORATION 1,407,190 56% of the top 50 producers have legacy 9 10 MIDSTATES PETROLEUM DENBURY ONSHORE 1,237,643 1,214,470 37 38 NEUMAN PRODUCTION COMPANY MUNOCO COMPANY 207,909 200,421 suits 39 LIBERTY RESOURCES 189,752 11 STONE ENERGY CORPORATION 1,120,626 40 PRIZE PETROLEUM 189,681 12 ENERGY PARTNERS 950,011 41 BRIDWELL OIL MANAGEMENT 189,318Which represents 79% of the production of 13 DEVON ENERGY PRODUCTION 839,683 14 FOREST OIL CORPORATION 750,649 42 J.P VANWAY . 185,832 15 ENERGYQUEST II 715,279 43 INEXCO OIL COMPANY 184,943 16 17 the top 50 producers MARITECH RESOURCES COX OPERATING 621,248 572,574 44 45 CASTEX ENERGY JUSTISS OIL COMPANY 179,295 172,336 18 MCGOWAN WORKING PARTNERS 554,739 46 SUNLAND PRODUCTION 167,080 19 DUNE OPERATING COMPANY 553,788 47 NOBLE ENERGY 165,203 20 LOBO OPERATING 538,227 48 SOUTHERN BAY OPERATING 164,704 21 MILAGRO EXPLORATION 483,659 49 JAG OPERATING 154,588 22 CENTURY EXPLORATION 448,427 50 JGC ENERGY 146,570 23 DIMENSION ENERGY CO 333,523 24 BOPCO 328,890 STATE TOTAL PRODUCTION 49,114,795 25 THE MERIDIAN 281,658 TOP 50 TOTAL CRUDE OIL PRODUCTION 79% 38,715,580 26 CLAYTON WILLIAMS ENERGY 277,008 TOP 50 WITH LEGACY CASES 27,663,975 27 PETRO-HUNT 257,827 TOP 50 PERCENTAGE WITH LEGACY 56% 28 THREE SISTERS PETROLEUM 242,412
    10. 10. 1000 $130900 Legacy Lawsuits Discourage South La Land Drilling $111800 South La - Land700 Texas $93 New Mexico Oklahoma600 Wyoming Crude Oil ACT 312 $74 June 2006500 Corbello June 2002 $56400300 $37200 $19100 0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    11. 11. 1000 $130900 Legacy Lawsuits Discourage South La Land Drilling $111800 L S U CLa -n t e r f o r E n e r g y S t u d i e s South e Land $93 Texas700 1200 Wells not to be drilled New Mexico Oklahoma600 Wyoming 30,000 Jobs ACT 312 $74 Crude Oil June 2006500 Corbello June 2002 $56400300 $37200 $19100 0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
    12. 12. LOUISIANA LAWSUIT CLIMATE SECOND WORST IN NATION Lawsuit Climate 2010 Ranking the States Louisiana RANKLAWSUIT CLIMATE 49THJUDGES IMPARTIALITY 49THJUDGES COMPETENCE 49THJURIES FAIRNESS 49TH U.S. CHAMBER INSTITUTE FOR LEGAL REFORM
    13. 13. LOUISIANA LAWSUIT CLIMATE SECOND WORST IN NATION Lawsuit Climate 2010 Ranking the States Louisiana RANKLAWSUIT CLIMATE 49THJUDGES IMPARTIALITY 49THJUDGES COMPETENCE 49THJURIES FAIRNESS 49TH U.S. CHAMBER INSTITUTE FOR LEGAL REFORM

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