A lawsuit is set for trial in Texas between two well-known oil and gas names over revenue and ownership interests, with hundreds of millions of dollars in damages claimed.
Mesa Petroleum, founded by T. Boone Pickens, filed suit against J. Cleo Thompson and three exploration and production companies based in Midland. Mesa alleging that Patriot Resources, Baytech and Delaware Basin Resources violated the terms of an investment contract.
The complaint alleges that Thompson and the Midland companies are liable for fraud, breach of contract, tortious interference with a contract, and breach of fiduciary duty. The defendants deny the allegations. The trial in Pecos, Texas is expected to take several weeks.
In January 2007, Thompson and Baytech signed a “participation agreement” with Mesa that committed the companies to offering Mesa an ownership stake of 15 percent in asset acquisitions over five years. According to court documents, Mesa paid $125,000 to enter into the investment agreement and $1 million to participate in an investment known as the Red Bull Prospect.
Mesa claims that the company “elected to participate” in all of the investments that were offered, but the defendants allegedly took new investment opportunities for themselves, failing to offer interests to Mesa as required by the participation agreement. The investments that Mesa claims it missed out on include royalties, revenues, leases, easements, production payments, wells and facilities. Thompson and the other companies claim that they nullified the agreement.