A drilling company has been sued by an oil and gas company in Texas alleging breach of a contract to dig three wells.
The lawsuit was filed by Conquistador Petroleum on April 5 against E&B Natural Resources Management Corp. and Francesco Galesi in Jefferson County District Court.
Conquistador claims that E&B failed to fulfill its contract to drill three wells on a 22-acre parcel of the North Port Acres Prospect, after the first well was found to be dry. According to the lawsuit, Conquistador spent $600,000 on seismic data for the property in 2006 and 2007 and $4 million more afterward.
According to the lawsuit, the two companies signed an exploration agreement on May 1, 2008 which called for E&B to drill three 10,500-foot-deep wells, with E&B’s performance guaranteed by Galesi.
The lawsuit states that Conquistador obtained a license allowing E&B to drill the wells, but the company failed to do so by the September 1, 2008 deadline. That deadline was extended, and the companies amended their contract such that E&B would drill two 16,500-foot-deep wells instead of the three shallower wells.
According to the complaint, after the first well was drilled in the fall of 2010 and was found to be dry, E&B failed to drill the second well and requested that the agreement be terminated.
Conquistador is seeking reimbursement of sunk costs of $2.3 million, as well as the $600,000 it spent obtaining seismic data.