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2016-45652 / Court: 190
CAUSE NO.
PEREGRINE OIL & GAS, LP § IN THE DISTRICT COURT OF
§
§
Plaintiff §
Vv. HARRIS COUNTY, TEXAS
HRB OIL & GAS, Ltd. and
VHPM, LLC
Defendants § JUDICIAL DISTRICT
PLAINTIFE’S ORIGINAL PETITION
TO THE HONORABLE COURT;
Plaintiff Peregrine Oil & Gas, Ltd. complains of Defendants HRB Oil & Gas, Ltd., and
VHPM, LLC and for cause of action would show the Court as follows:
1 PARTIES
1 Plaintiff Peregrine Oil & Gas, LP is a Delaware limited partnership which is qualified to
do business in Texas, and which maintains a principal place of business in Houston, Harris
County, Texas.
2, Defendant HRB Oil & Gas, Ltd. is a Texas limited partnership, which maintains its
principal place of business in Dallas County, Texas. Defendant HRB Oil & Gas, Ltd. may be
served with process by delivering the citation, along with a copy of this Original Petition on its
registered agent, Margaret Bright Vonder Hoya, 6310 Lemmon Avenue, Suite 222, Dallas, Texas
75209.
3 Defendant, VHPM, LLC, is a Texas Limited Liability Company, with a principal place of
business at 4311 OAK LAWN AVE STE 360, DALLAS, TX 75219-2338 and it may be served
by serving its registered agent, Margaret Bright Vonder Hoya, 4401 Bordeaux, Dallas, Texas
75205.
UL, JURISDICTION, VENUE AND DISCOVERY PLAN
4 This Court has jurisdiction over this matter as Defendants are a Texas limited partnership
and a Texas limited liability company. Venue is proper in Harris County, Texas, because Harris
County is the county in which all or a substantial part of the events or omissions giving rise to
the claim occurred. Discovery in this case shall proceed under Level 2 of Rule 190.2 of the
Texas Rules of Civil Procedure.
Il, FACTS
5 On or about February 6, 2008, Plaintiff, Defendants and other entities entered into that
certain agreement entitled “Participation Agreement, Block A-155, Galveston Area, South
Addition, OCS-G 30654”, (hereinafter the “PA”). The PA and exhibits thereto set out the terms
and conditions under which Defendants and others would participate in the drilling of wells in
Block A-155, Galveston Area, South Addition, OCS-G 30654,
6 In order to earn an interest from Plaintiff, as Operator, in that certain Oil and Gas Lease
of Submerged Lands under the Outer Continental Shelf Lands Act, dated October 1, 2006,
between the United States Department of the Interior, Minerals Management Service, as Lessor,
and Peregrine Oil and Gas, LP, as Lessee, bearing serial number OCS-G 30654 (the “Lease”),
Defendants had to agree to the PA and to pay their share of expenses.
7 Among other provisions in the PA, the parties agreed that Plaintiff would execute and
deliver to Defendants an assignment of record title interest in the Lease, conveying the working
interest and net revenue interest as set out in Exhibit A to the PA. The PA also provided that the
assignment would include a reservation by Plaintiff of a twenty-five percent (25%) of 6/6ths
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back-in working interest after payout of the costs associated with the drilling and completion of
the Initial Test Well, platform and facilities, pipeline, lease operating expense and other costs.
According to Exhibit A to the PA, Defendants were entitled to an 8.10811% working interest and
6.43243% net revenue interest before payout, which would be reduced to a 6.08108% working
interest and 4.82432% net revenue interest after payout. In accordance with the PA, Plaintiff
executed and filed assignments to Defendants and other non-operating working interest owners,
with the before-payout and after-payout working interests identified in the instrument.
8 Throughout operation of the Lease, Plaintiff, as Operator, marketed production from the
Lease on behalf of itself and some of the parties, including Defendants, remitting proceeds
attributable to Defendants’ interest on a monthly basis, along with statements of sales data for
that month. Likewise, Plaintiff, as Operator, delivered monthly joint interest billing (“JIBs”)
statements to each party, including Defendants, detailing costs and expenses incurred for drilling,
producing and operating the Lease. The JIBs are also an invoice to each party, including
Defendants, for its and their respective share of such costs and expenses.
9 Payout as provided in the PA occurred June 1, 2013. On December 15, 2015, Plaintiff
delivered a Payout Notification and Request for Assignment to the participants in the PA,
including Defendants. This notice included a statement summarizing cach party’s net revenue
and JIB adjustments for the time period from the date payout occurred through the date that
ownership decks were changed for each party to reflect the after-payout interests. These
adjustments were necessary because, after occurrence of payout, each party had continued to
receive JIBs based on its respective before-payout share of joint operating expenses, and had
likewise received its respective before-payout share of revenues.
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10. According to the Payout Notification and Request for Assignment, Defendants were
indebted to Plaintiff in the amount of $210,883.31, which represented the difference between a)
the excess monies incorrectly paid to Defendants by Plaintiff using Defendants’ before-payout
interest instead of its after-payout interest, minus b) the monies paid by Defendants to Plaintiff
due to JIBs which used Defendants’ before-payout interest instead of its after-payout interest.
11. The Payout Notification and Request for Assignment indicated that all other parties were
also indebted to Plaintiff, and each of those parties has since resolved its obligation to Plaintiff.
Despite Plaintiff's requests, Defendants failed to pay the requested amount to Plaintiff. To
reimburse itself, Plaintiff began to retain the proceeds of sales of Defendants’ production from
the Lease, and to apply it to Defendants’ obligations to Plaintiff. Through March, 2016
production, Plaintiff had recovered $39,648.54 from such sales and applied those funds to
Defendants’ obligation, leaving a balance due of $171,234.77. Defendants have refused, and
continue to refuse, to pay Plaintiff the sum of $171,234.77.
12. Despite Plaintiff's requests, Defendants have failed to execute and deliver to Plaintiff the
assignment of Plaintiff's back-in working interest, as provided in the PA.
IV. CAUSES OF ACTION
FIRST CAUSE OF ACTION — BREACH OF CONTRACT
As and for Plaintiff's First Cause of Action, Plaintiff states as follows:
13. Plaintiff restates and re-alleges Paragraphs 4-11.
14. Under the terms of the PA, upon the occurrence of payout Defendants are entitled to
receive only proceeds from production attributable to its 6.08108% after-payout working interest
in the Lease. After payout Defendant received proceeds from production calculated upon its
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8.10811% working interest and 6.43243% net revenue interest rather than the “after pay out”
interest of 6.08108% working interest and 4.82432% net revenue interest, and Defendants have
refused to pay over to Plaintiff those funds credited to it but for which it did not own any
working interest. Defendants have breached the terms of the PA by its and their unjustified
refusal.
15. Asa direct result of Defendants’ breach of contract, Plaintiff has suffered actual damages
in the amount of $171,234.77 in overpayment to Defendants. Thus, Plaintiff now seeks recovery
of that sum in this case. Furthermore, Plaintiff seeks recovery of pre-judgment and post-
judgment interest at the highest rate allowed by law.
SECOND CAUSE OF ACTION—MONEY HAD AND RECEIVED
As and for Plaintiff's Second Cause of Action, Plaintiff states as follows:
16. Plaintiff restates and re-alleges Paragraphs 4 through 10.
17. Defendants hold the sum of $171, 234.77, which was paid to Defendant but which, in
equity and good conscience, belongs to Plaintiff. Plaintiff seeks recovery of such $171, 234.77
held by Defendants but which belongs to Plaintiff. Plaintiff further seeks recovery of pre-
judgment and post-judgment interest at the highest rate allowed by law.
V. ATTORNEY’S FEES
Plaintiff restates and re-alleges Paragraphs 4-13 as if such paragraphs were incorporated
herein.
18. Plaintiff has been forced to employ the undersigned attorneys in order to vindicate its
contractual rights. Plaintiff has previously provided notice to Defendants of its claims and has
demanded payment of the above sum. Therefore, Plaintiff claims its attorney’s fees and costs
pursuant to §38.001, et. seq. of the Tex. Civ. Prac. & Rem. Code.
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19. All conditions precedent have either been performed or have occurred.
VII. REQUEST FOR DISCLOSURE
20. Pursuant to Tex. R. Civ. P. 194, Plaintiff requests Defendants to disclose, within 50 days after
service of this request, the information or materials described in Rule 194.2(a) through (1).
WHEREFORE, PREMISES CONSIDERED, Plaintiff requests that Defendants, HRB Oil &
Gas, Ltd. and VHPM, LLC, be cited to appear and answer, and that upon final trial hereof,
Plaintiff have:
1 Judgment against Defendants awarding Plaintiff its actual damages in an amount in
excess of the minimum jurisdictional limits of this Court; and
Judgment awarding Plaintiff recovery of Plaintiffs reasonable attorney’s fees; and
Judgment awarding pre-judgment interest at the highest rate permitted by law; and
Judgment awarding post-judgment interest at the highest rate permitted by law from the
date of judgment until paid; and
Taxable court costs; and
Such other and further relief to which Plaintiff may be justly entitled.
Respectfully su) itted,
Michael D. Jon
State Bar No. 1929350
6363 Woodway, Suite 1100
Houston, Texas 77057-1796
Telephone: (713)652-4068
Facsimile: (713)651-0716
Email: mjones@jonesgill.com
ATTORNEYS FOR PLAINTIFF.
PEREGRINE OIL & GAS, LP
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2016-45652 / Court: 190 CAUSE NO. PEREGRINE OIL & GAS, LP § IN THE DISTRICT COURT OF § § Plaintiff § Vv. HARRIS COUNTY, TEXAS HRB OIL & GAS, Ltd. and VHPM, LLC Defendants § JUDICIAL DISTRICT PLAINTIFE’S ORIGINAL PETITION TO THE HONORABLE COURT; Plaintiff Peregrine Oil & Gas, Ltd. complains of Defendants HRB Oil & Gas, Ltd., and VHPM, LLC and for cause of action would show the Court as follows: 1 PARTIES 1 Plaintiff Peregrine Oil & Gas, LP is a Delaware limited partnership which is qualified to do business in Texas, and which maintains a principal place of business in Houston, Harris County, Texas. 2, Defendant HRB Oil & Gas, Ltd. is a Texas limited partnership, which maintains its principal place of business in Dallas County, Texas. Defendant HRB Oil & Gas, Ltd. may be served with process by delivering the citation, along with a copy of this Original Petition on its registered agent, Margaret Bright Vonder Hoya, 6310 Lemmon Avenue, Suite 222, Dallas, Texas 75209. 3 Defendant, VHPM, LLC, is a Texas Limited Liability Company, with a principal place of business at 4311 OAK LAWN AVE STE 360, DALLAS, TX 75219-2338 and it may be served by serving its registered agent, Margaret Bright Vonder Hoya, 4401 Bordeaux, Dallas, Texas 75205. UL, JURISDICTION, VENUE AND DISCOVERY PLAN 4 This Court has jurisdiction over this matter as Defendants are a Texas limited partnership and a Texas limited liability company. Venue is proper in Harris County, Texas, because Harris County is the county in which all or a substantial part of the events or omissions giving rise to the claim occurred. Discovery in this case shall proceed under Level 2 of Rule 190.2 of the Texas Rules of Civil Procedure. Il, FACTS 5 On or about February 6, 2008, Plaintiff, Defendants and other entities entered into that certain agreement entitled “Participation Agreement, Block A-155, Galveston Area, South Addition, OCS-G 30654”, (hereinafter the “PA”). The PA and exhibits thereto set out the terms and conditions under which Defendants and others would participate in the drilling of wells in Block A-155, Galveston Area, South Addition, OCS-G 30654, 6 In order to earn an interest from Plaintiff, as Operator, in that certain Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands Act, dated October 1, 2006, between the United States Department of the Interior, Minerals Management Service, as Lessor, and Peregrine Oil and Gas, LP, as Lessee, bearing serial number OCS-G 30654 (the “Lease”), Defendants had to agree to the PA and to pay their share of expenses. 7 Among other provisions in the PA, the parties agreed that Plaintiff would execute and deliver to Defendants an assignment of record title interest in the Lease, conveying the working interest and net revenue interest as set out in Exhibit A to the PA. The PA also provided that the assignment would include a reservation by Plaintiff of a twenty-five percent (25%) of 6/6ths Page 2 of 6 back-in working interest after payout of the costs associated with the drilling and completion of the Initial Test Well, platform and facilities, pipeline, lease operating expense and other costs. According to Exhibit A to the PA, Defendants were entitled to an 8.10811% working interest and 6.43243% net revenue interest before payout, which would be reduced to a 6.08108% working interest and 4.82432% net revenue interest after payout. In accordance with the PA, Plaintiff executed and filed assignments to Defendants and other non-operating working interest owners, with the before-payout and after-payout working interests identified in the instrument. 8 Throughout operation of the Lease, Plaintiff, as Operator, marketed production from the Lease on behalf of itself and some of the parties, including Defendants, remitting proceeds attributable to Defendants’ interest on a monthly basis, along with statements of sales data for that month. Likewise, Plaintiff, as Operator, delivered monthly joint interest billing (“JIBs”) statements to each party, including Defendants, detailing costs and expenses incurred for drilling, producing and operating the Lease. The JIBs are also an invoice to each party, including Defendants, for its and their respective share of such costs and expenses. 9 Payout as provided in the PA occurred June 1, 2013. On December 15, 2015, Plaintiff delivered a Payout Notification and Request for Assignment to the participants in the PA, including Defendants. This notice included a statement summarizing cach party’s net revenue and JIB adjustments for the time period from the date payout occurred through the date that ownership decks were changed for each party to reflect the after-payout interests. These adjustments were necessary because, after occurrence of payout, each party had continued to receive JIBs based on its respective before-payout share of joint operating expenses, and had likewise received its respective before-payout share of revenues. Page 3 of 6 10. According to the Payout Notification and Request for Assignment, Defendants were indebted to Plaintiff in the amount of $210,883.31, which represented the difference between a) the excess monies incorrectly paid to Defendants by Plaintiff using Defendants’ before-payout interest instead of its after-payout interest, minus b) the monies paid by Defendants to Plaintiff due to JIBs which used Defendants’ before-payout interest instead of its after-payout interest. 11. The Payout Notification and Request for Assignment indicated that all other parties were also indebted to Plaintiff, and each of those parties has since resolved its obligation to Plaintiff. Despite Plaintiff's requests, Defendants failed to pay the requested amount to Plaintiff. To reimburse itself, Plaintiff began to retain the proceeds of sales of Defendants’ production from the Lease, and to apply it to Defendants’ obligations to Plaintiff. Through March, 2016 production, Plaintiff had recovered $39,648.54 from such sales and applied those funds to Defendants’ obligation, leaving a balance due of $171,234.77. Defendants have refused, and continue to refuse, to pay Plaintiff the sum of $171,234.77. 12. Despite Plaintiff's requests, Defendants have failed to execute and deliver to Plaintiff the assignment of Plaintiff's back-in working interest, as provided in the PA. IV. CAUSES OF ACTION FIRST CAUSE OF ACTION — BREACH OF CONTRACT As and for Plaintiff's First Cause of Action, Plaintiff states as follows: 13. Plaintiff restates and re-alleges Paragraphs 4-11. 14. Under the terms of the PA, upon the occurrence of payout Defendants are entitled to receive only proceeds from production attributable to its 6.08108% after-payout working interest in the Lease. After payout Defendant received proceeds from production calculated upon its Page 4 of 6 8.10811% working interest and 6.43243% net revenue interest rather than the “after pay out” interest of 6.08108% working interest and 4.82432% net revenue interest, and Defendants have refused to pay over to Plaintiff those funds credited to it but for which it did not own any working interest. Defendants have breached the terms of the PA by its and their unjustified refusal. 15. Asa direct result of Defendants’ breach of contract, Plaintiff has suffered actual damages in the amount of $171,234.77 in overpayment to Defendants. Thus, Plaintiff now seeks recovery of that sum in this case. Furthermore, Plaintiff seeks recovery of pre-judgment and post- judgment interest at the highest rate allowed by law. SECOND CAUSE OF ACTION—MONEY HAD AND RECEIVED As and for Plaintiff's Second Cause of Action, Plaintiff states as follows: 16. Plaintiff restates and re-alleges Paragraphs 4 through 10. 17. Defendants hold the sum of $171, 234.77, which was paid to Defendant but which, in equity and good conscience, belongs to Plaintiff. Plaintiff seeks recovery of such $171, 234.77 held by Defendants but which belongs to Plaintiff. Plaintiff further seeks recovery of pre- judgment and post-judgment interest at the highest rate allowed by law. V. ATTORNEY’S FEES Plaintiff restates and re-alleges Paragraphs 4-13 as if such paragraphs were incorporated herein. 18. Plaintiff has been forced to employ the undersigned attorneys in order to vindicate its contractual rights. Plaintiff has previously provided notice to Defendants of its claims and has demanded payment of the above sum. Therefore, Plaintiff claims its attorney’s fees and costs pursuant to §38.001, et. seq. of the Tex. Civ. Prac. & Rem. Code. Page 5 of6 19. All conditions precedent have either been performed or have occurred. VII. REQUEST FOR DISCLOSURE 20. Pursuant to Tex. R. Civ. P. 194, Plaintiff requests Defendants to disclose, within 50 days after service of this request, the information or materials described in Rule 194.2(a) through (1). WHEREFORE, PREMISES CONSIDERED, Plaintiff requests that Defendants, HRB Oil & Gas, Ltd. and VHPM, LLC, be cited to appear and answer, and that upon final trial hereof, Plaintiff have: 1 Judgment against Defendants awarding Plaintiff its actual damages in an amount in excess of the minimum jurisdictional limits of this Court; and Judgment awarding Plaintiff recovery of Plaintiffs reasonable attorney’s fees; and Judgment awarding pre-judgment interest at the highest rate permitted by law; and Judgment awarding post-judgment interest at the highest rate permitted by law from the date of judgment until paid; and Taxable court costs; and Such other and further relief to which Plaintiff may be justly entitled. Respectfully su) itted, Michael D. Jon State Bar No. 1929350 6363 Woodway, Suite 1100 Houston, Texas 77057-1796 Telephone: (713)652-4068 Facsimile: (713)651-0716 Email: mjones@jonesgill.com ATTORNEYS FOR PLAINTIFF. PEREGRINE OIL & GAS, LP Page 6 of6